A Ranting: Why Are Some California Middle Class Leaving?
- Vehicle registration fees have escalated 40% or more.
- Gasoline tax has put us at the 2nd highest priced in the nation (Hawaii is the highest).
- The Public Utility Commission granted the Edison Company a small increase and my bill doubled with the same usage.
- If you walk your dog off-leash and are caught, the first fine is $250.00 and if you take it to court, you must also pay court fees.
- Some of the taxing agencies have come up with a new policy to generate additional revenue; they don’t send any primary or first follow up bill and sometimes never a past due notice. If we do get a 2nd past due notice there is a penalty of 100% to 130%. If you call them, they tell you that it’s your responsibility to keep track and just mail in the money. It’s not their problem; just pay up.
- Homes in California have a medium price of $561.000, and in my modest yet safe middle class area it’s $850.000; then there is property tax of one percent of that home sale plus special add on taxes. Example an $850,000 home would be based taxed of $8,500. Add in the extras of about $1,700 brings your yearly property tax bill to $10,200.
- Commercial rentals are outrageous, causing many businesses to leave the state.
- Personal rents range from $800 a month or more for just a room. A one bedroom apartment usually starts at $1,500 and up. In my area, an average 2 bedroom apartment rents for approximately $2,200. That’s the middle class suburb areas, my friends.
- Pet government projects generated by our Governor probably should be spending more to protect the everyday voter and address our housing crisis.
- The educational system in most areas are a total disaster. Even in the best areas, the public schools need help.
- An overburdened public employee retiring benefits system isn’t helping the state budget. Many receive their retirement checks and then flee the state for greener pastures. We can’t blame them. Their retirement won’t support them here.
I don’t think the next election is going to change anything but who knows. The taxpaying middle class public has been having a difficult time and the government isn’t helping. We must help ourselves by preparing for our own retirement and by voting.
Is there any good news? Well, for those investing in real estate there is a lot of good news. We’re sorry so many people are having such a difficult time with cost of living. The property is very expensive but must eventually even out because it won’t be able to sustain at the current level. More apartments will be needed and will be built. People are room-mating because they don’t want to leave the beautiful weather and all that is offered in a coastal state. California is a beautiful paradise and many people want to live here, no matter the cost. Those people selling will be replaced with new buyers. So there will be opportunities now and there will be even more soon for investors. Keep your eyes open.
California also has great colleges which always need apartments for independent students, workers, etc. There’s a continuing housing crisis calling for more apartments and condos. Homes for rising employees, millennials wise enough to purchase & rent rooms to help pay the mortgage, people that are just not going to give up on their dreams will still stay and purchase here. Investors usually make even more when people sell if they are savvy in their business strategies.
The other good news: be sure to watch where those people leaving California are going. They are leaving to places that are more affordable and those states offer tremendous passive income opportunities as well as for those that want to flip houses. The middle class and upper-middle class that can sell their homes here, can also take that income to pay cash for a home in Louisiana, Missouri, Kansas, Georgia, even Texas, or all the southern cities/states where homes cost pennies compared to what they have seen in their lifetimes here. Watch the trends and go make some money!