Orange County is Rich

While purchasing a $1.50 box in an innocuous strip mall right off Bristol & Jamboree, I noticed how many suits are eating lunch at a place called Pascal’s Épicerie. Come to think of it, I always see the hottest women and fanciest cars when I have business in this strip mall full of salons and, inexplicably, a Coco’s. Well no shit, one direction down Jamboree straddles Irvine/Newport Beach and is lined with big tech office buildings. Every side street in the other direction leads to a host of gated communities full of homes worth $1.7 million (median). Jamboree passes two country clubs and a mere golf course by the time it hits Pacific Coast Highway.

About a mile away, down PCH and off Dover, my sister lives in the “ass end” of Newport. Her apartment complex is one of few vaguely affordable places in the area and attracts all the beach riffraff who aren’t quite white supremacist enough to move to Huntington Beach. Despite gainful employment as a lawyer (for the county), she has no chance of being able to afford a house or condo even in this ass end.

My errands take me down Jamboree, past the office parks, arboretum, and mid-density apartments that – given the area – feel like big city affairs. I head down Baker on the back side of John Wayne Airport past an assortment of discount shoe stores, taquerias, and what I believe to be a drive-through corner store that sells liquor. Despite being in a safe area, it feels like the bad side of the tracks.

There sure are a lot of Mexicans riding bikes. I’m not surprised – I’m in Costa Mesa near Santa Ana. Nowhere near the “bad parts” of Santa Ana that allegedly have “gangs”, but I wonder who lives around here. A Zillowing of the area shows that houses cradled to the west of the 55/73 junction have recently sold for $600,000-$1,000,000. Regardless of race, people who ride bikes and buses for transportation (out of necessity) aren’t purchasing $600,000 houses. I am in a far more working class area, yet no more than a few miles away from Pascal’s on a straight shot

This is by no means an extreme example of class disparity over a short distance. It takes an urban environment to be able to cross the street from the newly gentrified neighborhood to the ghetto. Despite the fact that my car, clothes, and values are not in line with the suits at Pascal’s, I fit in with them. More than I do walking into a taqueria and asking for “tres tacos, por favor!” Put me in a smart suit, BMW, and toss me a copy of the WSJ: I can play the role. I’m marking a line between fitting in with and identifying with a group. Poor white people have a tendency to identify with rich white people, blaming minorities for their job woes while failing to understand that being white doesn’t grant automatic entrance to the secret club of high income. Still, I can’t shake the perception that all the money around here will end up rubbing off on me.

My Amway/Quixtar research showed that members are constantly told how successful everyone around/above them is, and how simple association with these fabulously wealthy people will guarantee them their own riches. I was waiting to write about The Secret in a future blog, but it fits now as a quick analogy. If the goal is simply to make money, go to where there are high paying jobs, many corporate headquarters, and plenty of wealth being spread around. Networking with the rich can provide opportunity, but simple proximity does not. A salesman with confidence is more likely to succeed than one who doubts himself. Thoughts usually precede action, but we, as a species, cannot manifest consumer goods through the fucking “Law of Attraction“.

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Last week a coworker was working an ad for a $130k Maserati and spent the entire night in shock given the $1300 monthly payments on 25% down. He referenced it numerous times the rest of the week and I don’t think had ever been aware what luxury cars cost before. A friend argued, “that’s not that much to spend on a car,” and I had to agree. Not that I see myself ever spending that much, but my rationale was that a top-of-the-line Benz costs that much, and that’s still a production car. A $130k Maserati could be a daily driver. I understand how immature/unrealistic it appears for a pair of guys in their mid-20s to make this claim, but we understand how much money people make around here.

Another coworker asked: “What kind of jobs do people have where they can afford that?” In my head I was thinking mid-size business owners, top executives of large corporations, professionals at the top of their fields, same with salespeople (when selling to the rich, there’s money to be made), old money, new money (stock option riches), commuter money, etc. I decided to go with “a lot of people who buy cars like that can’t afford them,” before going into a brief tale of all the young idiots who made huge amounts of money during the height of the refinance and subprime booms, then threw it all away.

Obviously most people manage to afford the homes they buy despite the cooling of the market and increase in foreclosures. The home section of last Sunday’s OC Register ran an article on foreclosures in OC. “Not as nice” areas like Anaheim saw prices skyrocket and plenty of people with bad credit stepped in to take advantage of the wild ride. Aliso Viejo and Laguna Niguel were the last bastion of affordable starter homes in the nice side of OC, but even there a small 2 bedroom condo runs around $450k. These are among the areas hit hardest by foreclosures in 2007. The Register apparently runs a weekly story on a recently sold home, surrounding demographics, similar homes on the market, etc. A nice, but modest home in Yorba Linda recently sold for $650k. For a 30 year fixed (at low rates) with 10% down, the buyer should be pulling in 170k a year. Not out of reason for a married couple, but certainly well above average income just to afford an average home.

I’m ready to buy a $1.7 million dollar home. I have a 20% down payment of $340k, probably the equity and profit from the sale of my current home. With $1,360,000 to pay off in 30 years, at 6% interest, with no property taxes and no other debt, I only have to pull in $350k a year to afford this $9k monthly payment, which makes a $1.3k car payment look more reasonable. Enough people are earning this much. Only 2 foreclosures among the 4 Newport Beach zip codes year to date, and there has been no stalling in home prices like in surrounding areas.

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Simply being unable to afford a home doesn’t mean someone is poor, but it’s sure an indicator. I know I’m poor, largely by choice at the moment. Once I cease choosing to be poor, I still won’t be able to afford a decent place. I started this intending to write about old people, so I don’t have a point…. but If I have to pull one out of thin air:

Lots of people who think they are upper class aren’t. This bothers me from a class consciousness standpoint. Dual-income required to afford a middle class home is not upper class and pulling down $200k a year isn’t big shit. It’s a medium shit, although I’d still think myself a big shit even if I took only half a medium dump. All this must be adding to that “prolonged adolescence” thing I keep hearing about. I’m to understand there’s a sense of pride in home ownership, and I’m pretty sure there are parts of the country where dual-earners earning well above average salaries can actually afford above average houses. When I look around, I see a lot of unmarried 30 year olds doing the same things they were at 20. Financial reality shapes lifestyles? I’ll have to make sure to manifest $325 million in Mega Millions money tomorrow night.