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Taxes

Where Housing Conditions in Southern California Stand in 2016

What kind of urban future can the residents of South California hope for the coming year? Here’s what’s in the upping according to market trends and planning designs. There are going to be higher prices and increased congestion with an accompanying degrading quality of life. As acerbic author of “Dr. Housing Bubble” blog puts it: You may as well look forward to becoming ‘los sardines’ in a future of relentless cramming and out-of-sight prices.

Both factors are at fault here: The relentless demand for housing and the willingness of the hugely rich to continue forking out money to paying for building that would take less wealthy three lifetimes to accumulate. Single family homes today cost a nice plot in heaven. A plot in San Francisco – a shack really – would cost as much as a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice family homes in Irvine, Manhattan Beach and Santa Monica are almost as bad. Of course there are locations in California’s poor cities and farmlands, where prices are static and you have more breathing space. But do you want to live there…

Even in these poorer neighborhoods, the state has approached the problem of housing affordability by subsidizing the construction of affordable housing through bond funds, tax credits, and other resources. But these programs have historically accounted for only a small share of all new housing built each year so they, too, cannot meet the housing needs of a majority of South California’s working and lower middle class population.

Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are the second factor that results in this cramming and high pricing specter. And then there’s California’s planning regime which rejects areas that are not “Green’ enough (at least not ‘Green’ enough to them) and they hop for ever-denser development at the expense of single-family housing in the state’s interior.

Many areas of high-density cities like Los Angeles are seeing construction of massive skyscrapers – rather tower-like monstrosities – in a few selected “transit-oriented” zones. Planners say they aim to stop short of super-density. The wealthy will still have their backyard play sets, barbecues and swimming pools. Which brings us to another point:

The gap between wealthy and poor (or less disadvantaged) in South California has never been larger

The poor live in one area. The lifestyle of the wealthy and housing prices maintain the distance. The Legislative Analyst’s office (LAO) which is the California Legislature’s advisory agency, had this to say:

Housing in California has long been more expensive than most of the rest of the country. Beginning in about 1970, however, the gap between California’s home prices and those in the rest country started to widen. Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued. Today, an average California home costs $440,000, about two-and-a-half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).

Property prices over the past two years in prime areas in South California such as Orange and Los Angeles counties have risen at a rate more than 10 times the relatively paltry increases in weekly paychecks. Now you can’t buy a house in Orange County or West L.A. without a triple digit income and in LA central forget it. Surrounding areas are not much better.

The biggest losers are working or middle class families (who happen to be mostly minorities) who want to bring up families in nice areas with loads of grass and field. Unfortunately, most of them are forced to relinquish such dreams. Aside from South Los Angeles having become a high-density population, it will take them lifetimes to accumulate enough money to buy a “sardine can” in this city.

Until now, the younger middle-income homeowners, particularly families, lived on the outskirts. In 2015, reports showed that homeownership rates are more than 25 percent higher in the Riverside-San Bernardino area than in the Los Angeles-Orange County area. Minorities in these areas also do much better. The homeownership rate inland is a quarter higher among African American and Asian households. The rate for Hispanics is nearly half again higher than in Los Angeles-Orange.

But now housing prices have soared – are soaring -and these areas are becoming unaffordable too. Three of the most crowded areas – based on people per room – are in Los Angeles County: South Los Angeles, the Pico Union area near downtown L.A. and Huntington Park. Southern California trails only Miami, Fla., for the highest percentage of residents who spend 40 percent or more of their incomes on rent or a mortgage.

In short, Southern California has become notorious as one of the highest priced, density crammed spots of the nation. Living there now costs two and half times the national average, and rents are 50 percent higher in these areas than in the country as a whole. Homeownership rates now stand at 48th among the states.

Where do we go from here?

Some inventive and aspiring people who want to fix or buy a home have found a way out by approaching lenders in the alternative commercial or residential sector. Shunned by banks because of poor credit history or trustworthiness, but still wanting to live in LA, these middle class individuals have approached alternative sources for their loans.

These commercial or residential private lenders (otherwise called hard money or bridge investors) offer the advantage of evaluating the borrower’s property rather than his credit history which means that if the borrower has a particularly promising house that he or she wants to hook, the lender may extend proceeds for the borrower to make the sale. The process is fast and convenient. Many find that it takes less than a week. There is some credit evaluation but hugely less than the banks conduct and the entire underwriting process is preformed in as timely and convenient as possible. That is one of the advantage of approaching hard money or private lenders; the system is personal. The lender meets the borrower’s needs.

The high rate of balloon and interest do dissuade many potential borrowers, but south California is glutted with money lenders which make it possible to ferret out negotiable prices.

Put it this way: If you are one of millions of people who want to find a home in the “sardine city” and maybe escape cramming – there’s one other option for you. Private commercial or residential money lenders otherwise known as hard money or bridge investors.

How about it?

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Insurance

Terms and Conditions of Auto Insurance

Based on the high rate of accidents which happen each year, it is imperative that anyone driving a car whether it is your car or a friend’s car must have an auto insurance policy even if it is the least of all insurance policies available.

An insurance covers the policyholder and in most cases it covers other people who use the car or the driver. However if the car gets into an accident which is not in the interest of the policyholder, or in violation with the agreement between the policyholder and the insurance company, the insurance policy will not cover the damages from such accident.

In instances where the insured vehicle gets sold to another person, the new owner is covered by the third party liability Insurance and also by the comprehensive car insurance policy (if there is any) within a period of 3 weeks after the change of ownership. When there is a new active insurance policy, all deductibles under the insurance will be paid by the new car owner.

Auto insurance does not cover damage to vehicles in company possession for purpose of sale

Depending on the car insurance policy agreement between you and your insurance company, there might not be a need for you to notify them when the terms in the policy agreement changed. The consequence of refusal to notify the insurance might be forfeiture indemnity and compensation if an accident occurs or reduction of the indemnity and compensation or lapses in the payment if indemnity and compensation.

Therefore to avoid the consequences stated above, whenever there is a change in the policy information notify your insurance company immediately.

You can purchase the same auto insurance from two different insurance companies without terminating the initial insurance with the first company but when an accident occurs, the agreement in your car insurance policy will applied, and this may mean that both companies pay half is the cost for the accident each.

Another important thing to note regarding auto insurance is the deductibles which are based on the agreement in the auto insurance policy. Deductibles are deducted only once in cases of an insurance event involving both third party liability and damages under the comprehensive auto insurance.

No deductible will apply in situations such as:

1. Damages from a known liable tortfeasor

2. Damages from fire, explosion, lightening or theft

3. Damages from items falling on the car.

Furthermore, there will be additional deductible if there is driving damage to the car by another person other than the policyholder, or any registered user of the three car under the auto insurance policy.

There are certain accidents which your auto insurance policy may not cover. Under the liability insurance, your auto inside policy does not cover;

1. Injury to the driver

2. Damage from the carriage of goods by road under the acts of contract

3. Damage to attached vehicle

4. Damage which occurred at the time the vehicle was rented out unless it can be proved that the damage is as a result of occurrence which is in accordance with the auto insurance policy

5. Damage to items belonging to the driver, policyholder, anyone stated in the auto insurance policy it a regular user.

The following accidents are not covered by the comprehensive auto insurance:

1. Damage resulting from weather conditions

2. Damage car parts during repairs unless it can be proved the damage had occurred during the driving or by fire

3. Damage in the electrician and mechanical parts the vehicle, unless it can be proved the damage occurred in accordance with the auto insurance policy

4. Damage resulting from reckless driving i.e. Overheating or no change of oil

5. Damage which occurred while the car was rented out

6. Damage which occurred from intoxication of the driver

7. Damage caused intentionally by grid negligence

8. Loss of the car due to seizure of the car by law enforcement authority

9. Damage under warranty and guarantee

10. Damage from usage of the car such as wear and tear, scratches on the car body and so on.

Duration of the auto insurance policy is based on the agreement between you and the insurance company. Most auto insurance agreement are annual and are renewed yearly unless it’s canceled in writing by the policyholder or the insurance company with a month’s notice.