A Supply-Demand Imbalance Of A Different Kind
A report from Arlington Now in Virginia. “A report this week revealed the 20 most profitable cities for real estate appreciation. Nothing in our area came close. Arlington showed zero percent appreciation in 2016 across the board for all types of housing; condos, townhomes, and single family. Can anyone explain how home values remained flat when there was only about 2.2 months of inventory and interest rates remained relatively stable? A conundrum…”
From Nevada Public Radio. “The story that helped build Nevada was that you came here, worked hard and could soon buy a home. That story is being edited. Home prices are through the roof, especially in Reno. In Reno, the Reno-Gazette Journal recently reported that a home that cost you $135,000 in 2012 will cost you more than $320,000 today. For first time homeowners and millennials at the lower end of the pay scale, that kind of mortgage payment is almost impossible to make.”
“However, Mike Kazmierski with the Economic Development Authority of Western Nevada told KNPR’s State of Nevada that while those prices seem high it is important to keep them in perspective. ‘That same house that you’re talking about for $320,000 - three bedroom, two car garage with a nice sized lot - that would be a million dollars in the Bay Area,’ he said.”
The Sun Sentinel in Florida. “The South Florida housing market is something of a riddle these days. Values are going up, but some appraisals aren’t matching the agreed-upon sale prices. Low- and mid-priced homes tend to sell quickly, but buyers are getting picky, unwilling to overpay or even to make offers on properties that aren’t in move-in condition. To help buyers and sellers better understand the market, the Citron Real Estate Group at Re/Max ParkCreek has organized a free real estate seminar. ‘It’s definitely a time to be informed about what your current value is,’ said agent Michael Citron.”
The Los Angeles Times in California. “John Burns is chief executive of John Burns Real Estate Consulting. He describes his job as running around and talking to a lot of ‘insanely smart people all the time.’ Burns says he knew last decade’s housing boom was over the day after the 2006 Super Bowl. He recalls seeing an ad from national home builder Centex that offered $100,000 off a $500,000 home in Sacramento. Surprised, he called the company’s chief executive, Tim Eller — who was also a client. ‘He said, ‘John, I have seen many of these cycles and they are always worse than everyone thinks they are, and the first guy to drop price sells homes.’”
“In coastal California, home values have become ‘overpriced’ based on income, Burns says. As a result, he’s recommending that clients be cautious when making big investments, especially since some analysts think a recession could be likely in the years ahead. ‘2017 looks great because the economies are strong. But this would not be a time to really grow your business dramatically in those markets and borrow a lot of money and take a lot of risk.’ he says. ‘As soon as we have a recession … if you don’t have a strong balance sheet you are done.’”
The Daily Camera in Colorado. “Jeffrey Long wants to move to California. He wanted to move four years ago, but he failed to find a buyer for his home north of Longmont in unincorporated Boulder County, situated on 5 acres overlooking Terry Lake. So he kept the house on the market for another year, hoping for a bite. Then another. Now, Long has turned to a North Carolina-based auction marketplace for high-end homes, Interluxe. Next weekend, thirty prospective buyers will be previewing the property and preparing for a June 5 online auction that Long hopes will push the price past the $1.25 million minimum bid.”
“‘It’s startling how much interest it’s gotten,’ he said . No matter what price the house ultimately fetches, ‘it’s a lot better than sitting on it and waiting.’”
“Longmont’s luxury market is very different from Boulder’s, according to Kevin Byrne, the listing broker on the property at 9722 Meadow Ridge Lane. The area is beset by a supply-demand imbalance of a different kind. With 30 current listings and a historic sell-rate of one per month, there is a 30-month supply of luxury inventory. A healthy market would be closer to six to twelve months. ‘We’ve got to limit the supply,’ Byrne said. ‘If you don’t have to sell your house, you shouldn’t have it on the market.’”
From The Monitor in Texas. “Despite McAllen’s economy narrowing late last year, it has avoided declining wages that have plagued Texas border economies, according to a study from the Texas A&M Real Estate Center. McAllen has seen an uptick in homes sales, the study said, even though the number of monthly housing permits is down substantially. ‘A glut of new houses in McAllen fueled the sales surge,’ said A&M Research Economist Luis Torres, ‘as the months of inventory (MOI) for new homes remains longer than 12 months and continues climbing.’”
What’s an overpaid FB going to eat after the next collapse?
Ragin’ Ramen!
What is a FB? Thanks in advance
One of my customers?
FB = Fortunate Borrower.
(Bahahahaha.)
Feeding bankers, please don’t feed the bankers.
Forever Boned
http://www.urbandictionary.com/define.php?defid=2785008&page=3&term=FB
It’s a word you can’t say on the radio.
I prefer “Fubar’d Borrower” though.
‘That same house that you’re talking about for $320,000 - three bedroom, two car garage with a nice sized lot - that would be a million dollars in the Bay Area,’ he said.”
So, who in Reno is pulling $250K salaries, like they do “in the Bay Area”?
Yes, I always find that kind of comparison amusing. Put the same house in the middle of Ohio and maybe it goes for $160,000, an equally meaningless comparison. Of course, the comparisons never go in that direction, it is always people trying to imply a house is undervalued.
Median household income in the Bay Area by county:
Alameda - $73k
Contra Costa - $80k
San Francisco - $78k
Marin - $91.5k
San Mateo - $91k
Santa Clara - $94k
Washoe County NV median income - $49k
Why exactly does the Bay Area support prices that are more than three times higher when median income isn’t even double?
My guess is that it’s because it’s one of the only places with a job market that’s actually good. So people will pay too much to be able to go across the street and get a different job almost any time they need to.
Don’t forget about detachment from reality.
When I visit mom in San Jose it’s almost like visiting another country… restaurants are busy, always traffic, Winfield Mall always busy, etc., nothing like my digs in flyover.
That’s what it is - high density suburbia that some people call paradise.
busboys and IT managers in the same report == statistics!
“….Why exactly does the Bay Area support prices that are more than three times higher?…”
Simple supply & demand equation.
Jobs, immigration, growth = demand
Ocean, Bay, peninsula = limited supply
‘That same house that you’re talking about for $320,000 - three bedroom, two car garage with a nice sized lot - that would be a million dollars in the Bay Area,’ he said.”
So if I bought a house in a San Bernardino slum I can tell my wife “But dear if the house was in Frisco we’d be millionaires”.
I heard the ‘Hong King’ argument before from a realtor when questioning the high price at an open house:
Her- “Well NoVa isn’t expensive because if we were in Hong Kong it would be five times the price”
Me- “Great, next time I’m shopping for a place in Hong Kong I’ll keep that in mind.”
It never amazes me the junk that comes out of realtors mouths.
I’d have to make >2x what I make in ABQ to get a similar standard of living that I would in the SF BA. That’s a big difference.
Yeah it is. But if a person can get a job in the bay area but can’t get a job in ABQ then it doesn’t matter for them.
Not just “a person” needing “a” job, but two people needing two jobs. Limits the choices even further.
What about the Lake Tahoe Bay Area? That’s a great Bay Area. The BEST Bay Area. Maybe ever.
da bear
Hardly.
Tahoe isn’t all that it’s cracked up to be. C-r-a-w-l-I-n-g with people everywhere you go, huge number of yuppies. Cars and traffic jams abound.
Gross.
There are numerous places better to be in the USA than in Tahoe. If you are unaware of them, you haven’t been around.
But hey, if all the yuppies want to congregate in Tahoe because it’s the hedonist place to be, I won’t stop them. It simply means they won’t be ruining other locations with their shallow egos.
You’ll appreciate this recent article about Boulder:
http://www.dailycamera.com/news/boulder/ci_31017342/report-conservatives-low-income-earners-feel-least-welcome
I live in South Denver. It’s not Boulder down here…
Tahoe. Boulder. Asheville.
Where yuppie liberals flock to flaunt their wealth in front of each other, and spend hours on end pontificating about life their way.
Fine by me. I have no desire to go to any of those places.
Who in God’s name wants to hang out with hundreds of Barbra Streisand, Michael Moore and George Soros clones?!
Not I.
Everyone is so enlightened that each ultimately is interchangeable.
Yecch!
$167,000 down the tubes…only to “discover” that they themselves are the white, rich, bigoted @ssholes?
What DO the precious and highly literate residents of Boulder ruminate over anyway?
How many licks does it take to get to the center of a Tootsie Pop? The world may never know….
Wow, that article is a textbook example of millenial horsecrap if I ever read some. Gotta love the irony that conservatives feel unwelcome because of “small but persistent microagressions” against them.
Do they even realize that today’s “conservatives” are actually liberals circa ~1995? 30 years ago, even PJW would be considered a flaming liberal.
Yeah, they’re a bunch of special snowflakes who need to go find themselves a safe space and so on and so forth.
I don’t know about circa 1995, but if you go back further, that statement is correct. Nixon, today, would be to the left of Nancy Pelosi and Chuck Schumer. And if she had been a politician in Nixon’s time, Ms. Clinton would have been closer to Barry Goldwater. But all these traditional ways of defining “left” and “right” are breaking down across the West, and even the world, because there’s only one acceptable ideology, and that’s globalization, one of whose manifestations is financialization and asset bubbles. That’s why so much energy is expended trying to create the impression of a partisan distinction, because in reality the intention is to sharply limit our political choices.
You said it SC - it has never been more clear that the globalists are using the left vs. right duality to accomplish their objectives. I split my radio listening time evenly between NPR and conservative talk.
On weekends I’ll tune into guys like Larry Cudlow and their ilk endlessly preaching the mantra of lowering corporate tax rates in this country, as if that is going to help American consumers and create more jobs here. Nope - it will just help the global corporatists get even richer, at the expense of everybody else.
Ugh.
I think that guy from the Economic Authority of Northern Nevada just inadvertently revealed who is buying Reno houses. Not people from Reno!
“On feasibility studies you get pushed to achieve certain pricing, because a guy needs it for his deal. If we catch anybody doing that we will let them go,” Burns says. “We would much rather [anger] our client and not do business with them again as long as we feel like we are doing the right thing.”
John Burns
‘We’ve got to limit the supply,’ Byrne said. ‘If you don’t have to sell your house, you shouldn’t have it on the market.’”
Clearly your client didn’t “have to sell [his] house” given the time frame it’s been listed. Price dictates an FB’s desperation to sell.
I can only be amused by Kevin Byrne’s arrogance. We’ve “got to” limit supply… so you can get a higher commission for each house, eh? And he says this publicly?
That’s an interesting point. It may be foolishness instead of arrogance. He should try to sell as many houses as possible and not worry about the prices so much. On the other hand, it’s probably a lot easier to be a realtor when prices are rising rapidly.
But I thought realtors WANTED supply! “If we had more homes on the market we could sell more homes” is the mantra of these ‘analysts’.
So what do they want? More supply or less supply?
More opportunities to commit fraud.
Amazon hit 1000$ price per share today.
My friend has bought his 3rd house (he works in Amazon since 2010).
First one in Bay Area and two in Seattle.
His investment is more than double right now in first two houses.
Thousands of Facebook, Amazon, Apple, Google, Netflix (and add Nvidia to the list which hit 140$) and countless startup employees are minting money.
We here are talking about bubble for years and no real sign of cool off or melt down.
What the heck is going on?
Fraud
No they are slaving away. And doing the “death pledge.”
This is normal.
http://imgur.com/xplry3Y
DC area has had low inventory,fast turnover and almost no price increases.=weird
The article doesn’t say if they used median or average. Maybe the drop is luxury housing is cancelling out a rise in lower-price housing. I can’t give you data from my nabe because there have been very few sales.
There is a very simple explanation for this:
(1) Like many other markets, DC housing has been dominated by “investors”. Individual and corporate “investors” have been buying houses hand over fist. However, as wealthy as DC is, it isn’t wealthy enough to support that kind of foolishness.
(2) These “investors” rapidly are becoming tapped out. They are beginning to lose money. Locally, nationally and internationally.
(3) The local DC population (ie, the “residents”) have the properties they need, or have been priced out of the market by the “investors”.
(4) Demand, aside from “investors” simply isn’t there. See #3. The demand in DC, as it is in numerous other cities, has been false for several years now. Wealth cannot be created out of thin air. Not even in DC.
Therefore, stagnant prices + low interest rates = flatlining sales. It’s a no brainer. People who would like to buy cannot. “Investor” companies are losing money.
Real demand is insufficient.
There is another variable — RIFs. They are coming to DC.
They should start with those who are seriously delinquent on their government guaranteed student loans.
A glut of new houses in McAllen fueled the sales surge,’ said A&M Research Economist Luis Torres, ‘as the months of inventory (MOI) for new homes remains longer than 12 months and continues climbing.’”
supply ,demand not
3 houses = he’s spending the Monopoly bank’s money now . . .
after landing on that free parking jackpot in the middle !
it always feels good spending the houses money. When its your hard earned dollars not so great.
Why doesn’t the guy just build a massive, 30-foot tall marble penis in his backyard in honor of himself? Same difference.
If I had that kind of money, I sure wouldn’t waste my time building trophy houses for myself. Seems rather inconsequential and ultimately unfulfilling. A trifling undertaking.
I’d be more interested in rescuing a few dozen kids from someplace like Iran and introducing them to a lifetime of freedom and the Bill of Rights.
Im fully invested until crowman turns bearish.
Good luck on that plan, as his bull exceeds my bear by a wide margin.
Not exactly what you would call a leading indicator.
An abandoned McMansion neighborhood in Canada.
http://www.businessinsider.com/abandoned-mcmansion-neighborhood-in-canada-photos-2017-5/#of-the-94-properties-purchased-by-the-government-54-were-or-will-be-demolished-and-26-were-put-up-for-sale-4
I dont see how the heck u r gonna move some of those cribs. I guess you are basically buying the commodities in the home. I guess they built a little to close to the river?
“After the flood, it was found that the homes were built on a flood plain of the nearby Highwood River.”
It doesn’t seem like you need to wait for a flood to know whether you are in a flood plain. Normally proximity and elevation relative to the water level in the river are sufficient evidence.
Places that older generations only would use as pasture, ripe for development!
Down here in SD, developers have a habit of building homes on the site of active landslides. And clueless politicians fail to realize the underlying geologic processes have been going on for millennia, not mere decades.
Not sure whether this is more or less egregious than building in the floodplain?
U.S.
San Diego Landslide Threatens Homes
By REGAN MORRIS and JOHN HOLUSHA
OCT. 3, 2007
Photo
Structural engineers and geologists were called in to assess a landslide in the La Jolla section of San Diego. Credit Pool photo by Lenny Ignelzi
SAN DIEGO, Calif., Oct. 3 — A landslide caused severe damage in the hilly, affluent La Jolla section of San Diego today, shredding a 150-foot stretch of a busy road and wrecking at least one hillside home.
At least 46 homes on the slopes of Mt. Soledad, which dominates the area, were ordered evacuated after the road buckled shortly before 9 a.m. Pacific time, according to Gary Hassen, a San Diego Police detective. Many of the homes were empty at the time of the landslide. No injuries were reported.
“This is a big deal, there’s significant damage,” Mr. Hassen said. “One home is collapsing right now, slowly but surely.”
Three utility poles were damaged in the slide, and electricity was shut off in the area as a precaution, leaving 411 customers without power, according to Jennifer Brisco of the San Diego Gas and Electric Company. But gas mains were not affected, Ms. Brisco said.
Michael Aguirre, the San Diego City Attorney, said it was too soon to know what caused the landslide. Mr. Aguirre, the city attorney, said landslides and shifting soil have been an issue on Mt. Soledad since the 1960s. “This is not a new problem to the area,” he said. In a televised interview, Mr. Aguirre noted that the city had occasionally bought homes on Mt. Soledad that appeared to be in danger of sliding into their neighbors.
…
The city of Boise has issued orders that would require the owners of two collapsing houses in the Boise Foothills to demolish the structures at their own expense.
The houses are located on Alto Via Court just south of Table Rock Road in the Terra Nativa subdivision. For the past year and several months, a slowly moving landslide beneath them has caused worsening damage. What were once small cracks have turned into huge crevices.
One of the homes the city wants to demolish is the northernmost of a handful of buildings that have sustained damage from the moving ground. It appears to be sitting on top of a fault line between the landslide area and more stable ground next to it. Its walls and concrete surfaces are breaking apart.
The other home is located on the southern end of the row of damaged properties. Its damage appears less extreme than at the house north of it, though still significant.
Read more here: http://www.idahostatesman.com/news/local/community/boise/article152148847.html#storylink=cpy
It was different here.
When I was purchasing my house, I was presented with 100-year flood maps from the nearest running stream throughout the neighborhood. I guess it was intended to help me decided whether to complete the purchase. I don’t know if they have that requirement in Canada, but even if they did I bet those buyers didn’t even look at it.
“After the flood, it was found that the homes were built on a flood plain of the nearby Highwood River.”
“I’m shocked, shocked to find that this is a flood plain.” —Planning Dept.
Sam Diego prices up 1% from February to March, according to Case-Shiller, which I believe exceeds 12% annually. Nothing to see here, folks, no bubble here in San Diego.
Calling all FBs!!!!!!!
that are having those seminars like crazy in CA.
They get you all pumped up with a bunch of BS and then sell you some books and dvds. Works every time.
if they r making $ they would never tell anyone how to do it.
then no one makes $
Can we all agree that real estate is by far the best investment?
Certainly the most fun!
It’s great until someone puts their eye out.
green handshakes make the re world go round
‘it’s a lot better than sitting on it and waiting.’”
Sell now, or ride out your losses forever.
Don’t fall into the trap of foolishly blowing your subprime car loan on a rapidly depreciating, POS Chevy!
FINANCIAL TIMES
The Big Read
Analysis
Debt pile-up in US car market sparks subprime fear
In an echo of the subprime housing crash, delinquencies of US car loans are rising amid allegations of mis-selling
May 29, 2017
by: Ben McLannahan in New York
Kathy Boluch was in a bit of a state when she visited her local used-car dealership in Quincy, Massachusetts. The rear of her Volvo had been hit by a drunk driver and her insurer was badgering her to buy another vehicle so she could return the rental car it had given her. But her low credit score and irregular income disqualified her from every loan available — until the guys out the back called Santander.
Within a couple of hours she was driving off in an $18,000 Chevrolet sport utility vehicle, financed with a $16,000 loan from Santander Consumer USA, the auto-loans division of Spain’s biggest bank. To clinch the deal, the salesman suggested that Ms Boluch, a freelance copywriter, help out the dealership with promotions. He even listed her as an employee on the loan application.
But the work never came. Five years on, Ms Boluch, 60, is still paying $350 a month to bring down an outstanding balance of about $10,000. Meantime, she has spent another $7,000 on repairs to a “terrible” car that would now fetch about $750 in a sale.
…
5 × 12 × $350 = $21,000 in payments already made plus $7,000 in repairs and $10,000 still owed on a fully depreciated heap of scrap metal…
Stupid is as stupid does.
The price of new trucks has gotten out of control. all they keep doing is tinkering with the financing so people can afford a payment.
You can do it… pull the trigger.
“5 × 12 × $350 = $21,000 in payments already made plus $7,000 in repairs and $10,000 still owed on a fully depreciated heap of scrap metal…”
Love it.
Subprime auto FBs struggling to make their payments.
https://www.bloomberg.com/news/articles/2017-05-30/new-warning-sign-as-fewer-subprime-auto-borrowers-pay-off-early
“Borrowers are making fewer extra payments on loans that were bundled into bonds in 2015 and 2016, compared with loans in 2013 and 2014 bonds, according to Wells Fargo analysts led by John McElravey.”
“… bundled into bonds …”
There are two sets of ignorant pukes represented here:
Set 1: The ignorant pukes who sign the dotted lines to originate the loans.
Set 2: The ignorant pukes who signed the dotted lines in order to buy the bonds that are backed by the ignorant pukes who originated the loans
Then there are those smart ones who positioned themselves between these two sets of ignorant pukes and benefit from both sides of the transactions.
Government enforcement officials have expressed concern that lenders may be making loans that borrowers can’t repay, and packaging them into bonds that investors are willing to buy.
Total issuance of subprime auto loan-backed securities rose to $7.1 billion in the first quarter from $5.9 billion in the same quarter last year, according to data compiled by Bloomberg. The growth came even as losses from the debt have risen beyond levels last seen in the aftermath of the 2008 financial crisis.
Getting an odd sense of deja vous here.
Captured or asleep-at-the-switch regulators and enforcers? Check
Securitizing toxic-waste loans and selling them to “investors”? Check
Rising levels of non-performing loans? Check
Fundamentally unsound business models? Check?
Bankers and the Fed assuring us there is no cause for alarm? Check
One more …
A completely dumbed-down segment of citizenry that makes all of this nonsense possible (and oooohhhh soooo profitable).
I saw another repo man searching for a car at my luxxxxury apartment complex late last night (different company than the one I posted about the other week). Until recently, I never noticed any of these guys here.
Save the world by stop putting that evil gas known as carbon dioxide into the air.
Think how wonderful life would be if there were absolutely no carbon dioxide in the earths atmosphere.
https://wattsupwiththat.com/2017/05/30/claim-four-trillion-dollar-per-annum-carbon-tax-required-to-save-the-world/
Chinese speculators in Beijing who bought before the March 17th curbs on buying second homes are already FBs.
http://www.scmp.com/property/hong-kong-china/article/2096346/beijings-may-home-prices-decline-second-month-market-curbs
China is the greatest financial bubble in human history.
https://dailyreckoning.com/greatest-financial-bubble-history/
None of my posts post so I guess you can win the debate today.
“In the case of China, per capita income is about $8,000 per year, but extreme income inequality means that the median income if far less…Even adjusting for income inequality and no social safety net, the Chinese per capital income figure puts it solidly in the middle-income ranks.”
Sorry Jim, that is GDP per capita. It is not the same thing as personal income. Personal income is a small fraction of that. The Chinese are not stuck in the “middle income trap”. They are stuck in the “low income trap”. CrowDan would like your numbers though.
Then there is the “extreme income inequality”; a feature of the financial bubble.
You are wrong but I cannot debate with my hands tied behind my back, links do not post. Even today there is an article on MSN by a Chinese businessman who is moving textile production to the US since the wages he pays in China is up to half of what US textile workers make and other costs make it cheaper to produce in the US. This would not be happening if what you say is correct about wages. Other links that do not post include Fitch’s evaluation of China, not worth trying to post if content will not post.
Not to worry. Debt is not wealth.
While our ratings agencies are generally captured by the entities they’re supposed to be rating - witness the AAA ratings they assigned to toxic-waste MBS bundles sold to “investors” before the 2007 housing bubble implosion - they are belatedly getting nervous about China’s massive, unstable bubbles and associated systemic risks to the global financial system.
http://www.zerohedge.com/news/2017-05-31/fitch-warns-baidu-faces-default-risk-due-growing-shadow-banking-business
” … rating agencies …”
Bahahahaha … set up so as to give the illusion to the enormous quantity of totally dumbed down schmucks that inhabit the planet that they are somehow protected from their own ignorance and boundless stupidity.
How many bailouts does this make?
http://www.reuters.com/article/us-greece-economy-ecb-idUSKBN18R16J
Four, but more to follow. If Greece defaults, the ECB’s financial house of cards comes tumbling down.
Greece knows this. So does the ECB. So more bailouts-for-empty promises of reform are assured. Must.kick.can.
http://nypost.com/2017/05/30/hard-times-hit-billionaires-row-with-luxury-condo-foreclosure/
I wonder what this will do for Australian housing prices, that green energy is not so cheap:
https://wattsupwiththat.com/2017/05/31/green-energy-insurrection-aussie-miners-heavy-industry-threaten-investment-walkout-over-energy-prices/
Da Boyz are cashing out of the pump & dump & scurrying for the exits before the stampede.
http://www.marketwatch.com/story/investors-retreat-from-tech-etf-despite-series-of-records-2017-05-31
Must…have…covfefe!
Oh dear….
http://www.zerohedge.com/news/2017-05-31/pending-home-sales-crash-most-3-years-hit-double-whammy-price-inventory
No liftoff from the Fed is needed for home sales and prices to collapse of their own weight.
Would-be home buyers are balking at high prices, it appears. This is somehow “unexpected” to the media.
http://www.businessinsider.com/pending-home-sales-april-2017-2017-5
Some state news for all of those who own houses in California and Illinois.
The California house just passed a “single payer” state health care plan that covers everyone to include illegals. The cost is approximately twice the overall state budget for California. Democrats are thinking to add a 15% payroll tax on top of all other taxes. It won’t be enough as every illegals and person with medical issues will move to California for their free sh*t.
Illinois debt just got downgraded to near junk status. Their debt is exploding and their borrowing costs is getting more expensive with no cuts to spending. A classic debt death spiral. They will not go quietly into the night as public unions expect their pensions to paid - PERIOD. Expect all taxes to dramatically increase especially property taxes. It will only delay bankruptcy but the pain will be severe.
Warning to all. You vote for socialists, you get socialism. And they will tax you to death to pay for it.
Really the only choice in CA, NY, NJ and IL is to vote with your feet. There is no fixing it and a public union goon with a gun will come and take your house if need be - the public union pensions will be paid.