Wednesday, February 2, 2022

The Reverse Gold Rush and the Domino effects of the Great California Exodus

How Fleeing Californians are affecting the national and global housing markets, reshaping the world around them.

    "It's the edge of the world in all of western civilization. The sun may rise in the east at least it's settled in a final location. It's understood that Hollywood sells Californation." Anthony Kaedis of the Red Hot Chilli Peppers was onto something when he wrote these lyrics over 20 years ago. Indeed, California's biggest export hasn't been major industries or even it's avocado toast, it's been the mass exodus of it's people fleeing it's borders. This isn't a new phenomenon, it has been a long time coming since the early 2000's. How has this eastward migration affected the landscape in the areas they have settled to? What's the driving force behind all this and are we getting to a point of diminishing or negative returns, both for Californians as well as the rest of us? Let's dive a little deeper with some facts that we already know, the export culture from California that is driving up the cost of living as well as some predictions about where this is headed if we continue with the trends we are seeing. 

    Texas used to be a more affordable place. While jobs paid less and Texas has always been a right to work state, for the most part most anyone who worked a full time job could eventually own a home if they chose to. Wages kept up with the cost of living and with good financial planning there was no need for a second job or two incomes in a household. I grew up in a simple working class neighborhood in the Dallas/ Fort Worth area and my family were not top wage earners. I still got to see my dad home before 5pm on most days. My mom for the most part was a homemaker. When my parents planned something that was outside of their budget they would work a part time seasonal job to save the money needed to go on vacations. We didn't own a dryer and hung our clothes out to dry on a clothesline. We also washed all of our dishes by hand. What I'm trying to say is that while we weren't rich by any means, we had what we needed and didn't have to sacrifice a whole lot for it. My parents had a $300 mortgage on a fixer upper in the nighties, as opposed to the 2-3K monthly mortgages most people have today. 

    The terms "mandatory overtime" did not exist and any business that would force such a policy back then was sure to have a lot of employees quit on them. While there have always been workaholics in our society, they were the exception rather than the norm. Even then, most people hit their limit at 60 hours of work a week. Now, it is not uncommon to see people putting in 80 hours a week, while having multiple incomes within a multi-generational household. That's right, multi-generational because the parents can't afford to retire and the grown kids can't afford a place of their own. That is the export culture that Californians have brought to Texas. It's not the chilled, laid back surfer stereotype that we grew up seeing in the movies. Truth be told, Californians have no chill. Their increased presence in other parts of the country brings with him a cost of living increase that they are more than ready to make concessions for, while the rest of us get displaced out of our hometowns which have now become too expensive for locals to buy back into. In addition, Californians can out bid the local housing market all day long because of the purchasing power they possess, largely or mostly in part due to the equity built into their homes that they sold back in Cali. Sell your home, buy two more in Texas has been the mantra Californians have been subscribing to for the past 20 years, contributing to less housing available for locals who don't have the windfall of a half a million dollar home when they enter the housing market.

    Some who have been able to get into the housing market are having their homes soar to record breaking values, as much as 100k in a single year. This has prompted some locals to sell their homes and cash in their equity elsewhere where the cost of living is cheaper, heading east into east Texas, Arkansas, Louisiana, Florida and so on, continuing the cycle in a domino effect. Some of the younger working force and those with modest retirement pensions are now looking to move abroad to find a solution for their housing needs, only to affect an even poorer local population in those areas. Like an overblown west coast earthquake, the aftershocks can be felt worldwide thousands of miles apart.

    Inflation is a byproduct of a high demand and low supply situation. When the supply is low either through artificial means or because there is an actual shortage of materials, people are willing to pay more for what would normally be a far less expensive product. It is only when supply meets demand or surpassess it, that prices stop going up and meets a new normal. The current trend of rising property values is unsustainable and can be a big factor in across the board inflation, wealth disparity and a disappearing middle class.  Raising interest rates now may come at a time when it's too little to late, where the economy is bailing water as it tries to stay afloat to keep currencies from devaluing further. Even with rising interest rates, this will not deter cash buyers and multinational corporations from buying huge swaths of new home developments and turning them into rental properties. The next recession iceberg looms in the horizon, but it's not too late to reverse course if we act now and with a sense of selflessness. If you can afford to and don't need to sell your home, hold onto it. Lenders and builders need to stop selling homes to multinational buyers and investors who don't plan on living in the neighborhood. Sellers can also choose who they sell their homes to; sometimes the strongest offer on paper doesn't translate into the best or most qualified buyer. While that may seem like a drop in a bucket, any action is better than inaction. A final note to Californians: don't turn the place you live in into the place you ran away from. Texans as a whole don't drive Teslas. They love their brisket, their Dr. Pepper, their Shiner beer and their Cowboys team. If you are moving to Texas, be a Texan. Don't make us have to scratch our heads trying to figure out who you are. In case you need me to say it in Californian: Don't be a kook, we were riding these waves before you got here.

Saturday, January 29, 2022

Why I Left Social Media

 Why I'm Leaving (Already Left) Social Media

Social Media has been a sinking ship for the past few years, It was high time I jumped off it.

    Let me start off by saying that I did not take this decision lightly. I have been on social media in one way or another since 2005, going as far back as some of the very first content sharing sites like MySpace. Posting my status is an action that has been hardwired to my brain for the last 17 years of my life. The endorphin rush that I received through views, likes and comments was a stimulus on a chemical and neurological level. Not having that constant reward of others feedback has left a chasm in the place of the importance it once had. The void reminds me of the many hours wasted in front of my phone or computer making Mark Zuckerberg richer instead of coming up with more original thoughts and creative ideas. 

    While social media did help me promote my small business that I had for a few years, in the end I was giving to it more than what I received in return. Like most vices that are addictive and take years to overcome, they only serve to cover for our own deficiencies and lack of discipline in our lives. Truth be told, I have suffered from an immense artist's block for almost two decades. It is so bad that many people who know me do not know me for my artistic ability, that includes most friends and acquaintances in my adult life. With all of my grown up responsibilities, I need all the time possible to get back a semblance of a creative routine. In contrast to years past when I would create things for the enjoyment of others, I now have to create art because I need it in my life, because I need to prove to myself that I can still do it. 

Middle age is a turning point for everyone who reaches that milestone in their life. The question is, "which direction will you turn?". There's the stereotypical midlife crisis where people make foolish decisions that wreck all of the things that they worked towards up to this point in their lives. The expensive sports car, the Rogaine, the Just For Men hair dye, the "I still got it" and other narcissistic and egotistical attitudes are a fast recipe for disaster. Thankfully, those things and attitudes have never really appealed to me. I've never been about being fake and putting out a version of myself that doesn't exist in real life. In the real world, I'm a dad complete with dad bod and a young family (thankfully I'm also not balding, fingers crossed). I've done some really cool things in my life up to this point but that doesn't mean that I will or can continue doing those things at the same level I did them before. As a matter of fact, I don't want to continue to be known for the things that I did, because trying to relive those feats is a tall order to ask for these days. I'm physically and emotionally just not up to the task. I do, however want to try new things. I no longer feel the need to announce the new direction I'm taking my life on social media sites, I'm happy with the self-fulfillment I get just by knowing that I have reached a point of maturity where I am learning new hobbies and going new places without others knowledge or tacit approval. I'm happy with the group of people that I interact with face to face, or at least through WhatsApp or Zoom. I don't need to let anyone else in on my life. The way I see it, I can't complain about privacy violations and getting my information stolen if I'm constantly putting the information out there. I'm sure I have my own city in the Metaverse with all of the information I have volunteered during the time I've been on social media. Guess I'll never know. Unless you read this blog, I guess you'll never know I got off social media either.

Recently, I have found a new hobby I'm in love with : Paddleboarding