Thursday, May 28, 2009
High Speed Train would Change the Face of California
Now this is a topic I have heard about my entire life. I remember my mother telling me about it when I was a small child. Ever since, the story has periodically resurfaced in various guises.
However, now it seems as though there is funding and political will.
The State of California has even set up a very cool, high-tech web site where you can simulate trips to and from various points on the line as well as proposed routing. Today's press release shows that they are meeting this afternoon with Obama administration representatives to try and obtain $8 billion in federal stimulus funding. This would be added to the already taxpayer approved Prop 1A which passed in November, 2008 for almost $10 billion in bond funding.
The estimated $45 billion project had overwhelming support from Governor Schwartzenegger and the state legislature.
The train which would travel at 220MPH between Sacramento and San Diego with feeder lines proposed from the San Francisco Peninsula that would connect near Chowchilla and one under consideration from Oakland that would serve the East Bay and connect to the main line near Manteca.
Travel times are projected to be quite impressive: San Francisco to San Jose in 30 minutes, Burbank to San Francisco in under 2 hours and 35 minutes, San Diego to most areas in the Los Angeles area in under an hour.
The Combination of the bond issue and the Federal Stimulus money would not quite account for 40% of the proposed budget.
The project is indeed ambitious and the benefits are quite clear: decreased freeway congestion in the major parts of the state, decreased need to improve airport and highway infrastructure, decreased carbon dioxide emissions and fuel use, stimulate jobs in a large portion of the state etc.
It is a very exciting project that shows much promise and benefit to Californians.
If it is successful, it will have a significant impact on many industries: Auto fuel, the airline routes between Northern and Southern California, the auto industry, businesses and communities along the main auto corridors (primarily highways 5 and 101), and a huge impact on commute and residency patterns.
With inexpensive and quick transportation, suburban communities further away from metro centers would have easy access to the main job hubs. Tracy to Silicon Valley, areas such as Riverside and Palmdale to the greater LA area. Not to mention the areas that do not have easy access to the proposed roughly 26 terminals. These areas would become less desirable economically and reflect in the real estate values.
Historically, there are precedence. Just look at what happened to the old highway system and icons like Route 66 when the interstate highway system was built. And likewise gold-rush towns many of which became ghost towns, towns and cities that cropped up along rail routes in the 19th and early 20th century, or settlements along the old wagon train routes that declined when lines were changed or replaced by the interstates. These were major changes that affected the face of the U.S. Landscape, social interaction, and living and work patterns for significant numbers of the population.
The project, though ambitious, certainly meets the criteria of President Obama's several campaign goals: Greener economy, environmental improvement, decrease global warming, economic stimulus, etc. As such it should play well from the political spectrum, and if the necessary money could be injected it would be a huge political benefit for for the State and Federal governments.
If this project finally breaks ground in my lifetime, I will be amazed, only because it, like the old steam engines, has been so long in coming and taken so many decades to build political will and momentum. But it does look like a beneficial and ambitious project that will herald a new California and all of the benefits and detriments that come with a major shift in transportation technology. It looks like things are on the right track as long as the current budget and economic climate don't derail it.
Tuesday, May 19, 2009
SO. CAL REAL ESTATE. WHERE'S THE BOTTOM??
In circumnavigating the Southern California Real Estate blogosphere,
(I assume that is the correct term since it is a “sphere” or would “surf” be more apropos? After all, you can't “surf” a net or a web either? Let's stick with the navigation metaphor.)
I have found confirmation of our own experience of the real estate market trends and the statistics as presented by Altos Research.
Alhambra, CA has been exhibiting a lower available property inventory down, and decrease in the number of days on the market per property. The median sale price has increased.
Buena Park, CA has seen a slight positive reversal and stabilization in statistics since May 1.
Burbank, CA since May 1, has exhibited lower house prices along with decreased inventory and an increase in number of days on Market.
The Costa Mesa, CA market has shown a sharp price increase since 3rd week of April; Dom still high. Inventory low.
The coastal community of Palos Verdes Estates experienced a decrease in median sales price, high inventory of houses on the market and high number of days on the market.
Prices have increased since April in Pasadena, CA yet the days on market remain on the high side with a stable inventory of properties for sale.
As you can see, there are significant differences between communities. Although it is difficult to generalize give this kind of data, the higher cost neighborhoods like the coastal communities, tend to have more sluggish real estate markets.
Areas that have had more of a price decline over the past few months and have more entry-level properties are the ones that are stabilizing or showing signs of recovery.
As the statistics show, trends are different between communities, price ranges, and even between neighborhoods (for instance Southern Pasadena when separated from Pasadena shows a continued decline, where Pasadena as a whole shows a stabilizing trend).
Any conclusions? Well one thing that can be determined is that a market “bottom” will occur at different times and in different places. From the increases in sales, multiple offers and over-bidding going on in some of the communities that have lost the most value, the curve indicates that there is already a bottom forming. Not so in other areas.
If anyone is waiting for a bottom to occur before buying, I would recommend against it. In the first place, you can only identify the bottom once the trend has reversed and prices begin to increase. In the second place, if you get a good deal, have stable income, good financing and incentives, it won't matter in the long run if you saved an additional 10 or 15% on the purchase price. The trick is being conservative with your finances and buying what you can afford...don;t trust the lender to be the judge of that. (We've already seen what THAT leads to!)
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