Why are so many able to afford cash offers for million dollar + homes in Southern California?

live in the worst part of CA wrote:

It IS a lot of cash coming from mainland China. Are they just all amazing savers or is there some way they get vast sums of cash transferred over somehow?

Cashing out stock options from you tech guys?

Irvine home prices are insane but realtors say people will pay any price, no questions asked if they like the home.

This has been going on for a decade and it’s not some fake bubble that’s going to burst as many predicted.

It’s not just money coming from China. There’s a lot of wealthy people living in California. Anyone with aspiration will look towards moving to California. So, the people who are most driven and brightest tend to make it in California, and there are lots of people like that who make exponential amount of money.

With tech companies, entry level positions are making at least $120k-$200k per year, and people who move up in those companies are making at least $300k-$400k and that’s just for people who move up to mid level management or senior level individual contributor positions. People who move up higher and there are a lot of them. They start making at least $500k per year. Plus with how well the stock market has been doing for the 10+ years, there are lots and lots of multi-millionaires who can buy million dollar homes in cash.

Especially if you’re wanting to live in good areas, you’re competing against some multi-millionaires.

I would try to do what you can to stay in California though. I wouldn’t try to move to Texas or Ohio. If you’re used to living in California, it will suck living in those areas. You can afford a much bigger home, but like you’ve mentioned, your pay will go down. Also, even if your house is bigger, it’s harder to enjoy the outside with the crappy weather and a lot more bugs. Also, unless you already know people there, it may get lonely.

KOBE is the GREATEST in World History wrote:

Only the BEST and the BRIGHTEST people make it to Los Angeles. It's warm and sunny except for 15 days per year in So Cal. The weather made the greatest athlete in world history, Kobe Bryant.

How's the weather in Colorado?

live in the worst part of CA wrote:

It IS a lot of cash coming from mainland China. Are they just all amazing savers or is there some way they get vast sums of cash transferred over somehow?

Cashing out stock options from you tech guys?

Irvine home prices are insane but realtors say people will pay any price, no questions asked if they like the home.

This has been going on for a decade and it’s not some fake bubble that’s going to burst as many predicted.

American tax payers nationwide subsidize the obscene wealth of the West Coast. It needs to stop. California should be taxing its companies to pay for its balance sheet problems and not receive any federal aid until they do.

Lead Foil Hat II wrote:

live in the worst part of CA wrote:

It IS a lot of cash coming from mainland China. Are they just all amazing savers or is there some way they get vast sums of cash transferred over somehow?

Cashing out stock options from you tech guys?

Irvine home prices are insane but realtors say people will pay any price, no questions asked if they like the home.

This has been going on for a decade and it’s not some fake bubble that’s going to burst as many predicted.

American tax payers nationwide subsidize the obscene wealth of the West Coast. It needs to stop. California should be taxing its companies to pay for its balance sheet problems and not receive any federal aid until they do.

CA is basically breakeven in federal funds sent/received.

It's not China AFAIK.

Low supply + high demand. California refuses to build homes.

COVID makes it worse. Lots of people decided not to move so the supply of houses is small and lots of people want to move out of city-centers and apartments.

Private equity/hedge funds buying homes is definitely thing since the last crash but I don't know if it affects CA 1 mil + prices.

Harambe wrote:

It's not China AFAIK.

Low supply + high demand. California refuses to build homes.

COVID makes it worse. Lots of people decided not to move so the supply of houses is small and lots of people want to move out of city-centers and apartments.

Private equity/hedge funds buying homes is definitely thing since the last crash but I don't know if it affects CA 1 mil + prices.

FWIW, I do know one couple moving from a very expensive area of CA to a house they bought on my street here in Seattle, but they haven't actually left there yet and I can only surmise it is due to the pandemic and not wanting to take the risk at this time. This has been in process for many months.

Harambe wrote:

Lead Foil Hat II wrote:

American tax payers nationwide subsidize the obscene wealth of the West Coast. It needs to stop. California should be taxing its companies to pay for its balance sheet problems and not receive any federal aid until they do.

CA is basically breakeven in federal funds sent/received.

So what? They break even and this still have a 50+ Billion $ deficit, some of the largest income gaps in the country, sever poverty problems, severe drought problems, and somehow a huge class of arrogant children are making bank each year for doing very little while their neighbors starve and are homeless. People should not be making that much in CA, they should be taxing their own wealth and businesses at much higher rates until they can fix their problems. I guarantee you that this past year after these Dem funded bailouts they will be the state of rich people taking from the poor. CA is a disgusting situation of failed elite liberalism that pays out to the rich and leaves the poor suffering and homeless. It is a joke.

Lead Foil Hat II wrote:

So what? They break even and this still have a 50+ Billion $ deficit, some of the largest income gaps in the country, sever poverty problems, severe drought problems, and somehow a huge class of arrogant children are making bank each year for doing very little while their neighbors starve and are homeless. People should not be making that much in CA, they should be taxing their own wealth and businesses at much higher rates until they can fix their problems. I guarantee you that this past year after these Dem funded bailouts they will be the state of rich people taking from the poor. CA is a disgusting situation of failed elite liberalism that pays out to the rich and leaves the poor suffering and homeless. It is a joke.

^sent from my iPhone (or Android!)

Funny that you characterize STEM workers making $$$$ in CA as "arrogant children." Might I suggest CS classes in community college?

Also:

Housing turned into a source of profit for people who already have tons of money, directly at the expense of people who have less money. Happening more every year. Awesome! This is good for the stock market!

Most computer related work is barely STEM, it is just quality BSing, advertising agency crap, savvy "click-bait" development; most of the CS workers in that state would be worthless is any setting that was not flooded with excess money; they have no value outside of the system and most people could replace them. Give yourself a break, there is no defending the fact that CA can't take care of the majority of the people in its state. They need to tax the people earning more than 100k way way more and tax their employers even more until they can fix the budget and poverty issues that plague the state. There is no reason so many people should have $1 million cash on hand to buy houses outright. People are paid too much in CA for doing next to nothing.

Lead Foil Hat II wrote:

Most computer related work is barely STEM, it is just quality BSing, advertising agency crap, savvy "click-bait" development; most of the CS workers in that state would be worthless is any setting that was not flooded with excess money; they have no value outside of the system and most people could replace them. Give yourself a break, there is no defending the fact that CA can't take care of the majority of the people in its state. They need to tax the people earning more than 100k way way more and tax their employers even more until they can fix the budget and poverty issues that plague the state. There is no reason so many people should have $1 million cash on hand to buy houses outright. People are paid too much in CA for doing next to nothing.

I am ok with the market paying what is deemed necessary.

Software engineering is challenging.

I don't really get why you are so mad that young people earn $$$$ by learning and doing an in-demand skill.

That's basically the American dream.

California has issues, but blaming young educated people for being successful seems.... tinged with envy.

I guess everyone is gonna move to Miami and turn it Blue anyway, so who cares lol.

The US per capita income is 7 times that of the Chinese...It IS a chithole. The only reason they have as much wealth as they do is because of their huge population.

Wait till the revolution hits Chine and see what happens...

Facebook and Google are not really necessary, nor are most of the tech companies. The world would be better off if these "bright" people who all live in California actually made something real that was useful to society. While there are plenty of good "science" based companies in CA doing very good things, there is a plethora of useless drivel "tech" sucking money and wealth away from the rest of the world, wealth that leaves much of the world worse off and wealth too easily gotten by pseudo intelligent people in California. Programming AI to monitor everyone's actions and strategize personalized advertising campaigns to consumers is totally useless to everyone accept the people making bank already. Then the people making big money buy up all of the property so the slave class and industry built to cater to them can't afford the ground they defecate on. CA is likely the most inhumane state in the US, just a breading ground for extreme wealth consolidation and poverty. It is am embarassment to the American dream, not what you claim it to be.

Come to America

Work hard to get an education

Work hard to get a good job

Work hard to make a good salary

Get to live in California

Have someone tell you that you don't deserve the life you've worked hard for.

Now THAT is truly the American dream

Looking at housing stats, the supply of existing homes for sales has dropped in half since a year ago. Unlike 2008, there is not a demand problem but a supply problem. After COVID no one wants to move if they are in the suburbs. It doesn't apply to rents, as they are down uniformly. Not as many transactions are taking place as we would like.

The most successful, influential, and notable people move to Los Angeles from all over the world

I think overall you Europeans are better off in the US than if you stayed in Europe

If you don't like it you can go back to Europe to be with your own kind

fear factor wrote:

Backpacker wrote:

Yep.

Chinese are the biggest capitalists I have seen. Just look at Hongkong or Singapore. When Chinese get let loose they get ahead anywhere. I just watched this the other day about Zambia and I am not surprised.

Lots of fear mongering here. China's per capita GDP is something like $13K a year. The vast majority of that country is a 3rd world sh!thole.

My experience working for a computer software company - the Chinese working here are incredibly smart and hard working. And, I looked recently at the county real estate website and many of them own multiple rental properties. They love real estate. Capitalism works especially for the smart and hard working.

live in the worst part of CA wrote:

It IS a lot of cash coming from mainland China. Are they just all amazing savers or is there some way they get vast sums of cash transferred over somehow?

Cashing out stock options from you tech guys?

Irvine home prices are insane but realtors say people will pay any price, no questions asked if they like the home.

This has been going on for a decade and it’s not some fake bubble that’s going to burst as many predicted.

You’re not wrong. I’m 32 and moved to Irvine in 2015. I’ve seen it with my own eyes in the communities,

and talked with many people in the area and what happens is this: the Chinese buy a home, never move in, and just resell it in a couple years to another Chinese person. There’s communities of 100 homes and 60 are empty. Not empty because they haven’t been purchased, but empty because the owners never move in and don’t rent it out. Just buy. And resell. China operates differently than the US. It could simply be the Chinese are slowly buying US land so that say, in 30 years, they’ll own most of the land in the state.

All that said, there’s new communities in Irvine with small townhomes about 1800 sq feet for $550k. I think that’s pretty good for a small family. Obviously for that price you can get a mansion in 45 other states.

This is a great point about homes and upward mobility.

I work for a mortgage company and even in Ohio prices for homes are skyrocketing.

Homes are being bought with cash. Esp. in Columbus, which is the only city in Ohio that rivals bigger cities like Chicago and Charlotte in terms of young upward mobility.

A lot of these borrowers have killer incomes too.

Hell, even renting is tough--there simply aren't any cheap apartments anymore either; you have to go to the Short North or Linden to get a basic studio, but then you need to stay safe.