San Diego Housing Market News and Analysis
Would you buy a home in Lancaster,CA now (if you only planned to be in it 2-4 yrs)?
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Submitted by fritzmt on March 26, 2007 - 10:40am
I recently got orders to PCS (Permanent Change of Station) from our home here in Dayton, OH to Edwards Air Force Base, CA. Since there is no military housing available on base now, due to a major base construction project, we are going to live in the local community. The question comes to the risks assocated with buying, versus renting.
We get a $2200 a month (at my current rank) housing allowance to live in the outside community. 3BR/2BA Homes that we are looking at in the Lancaster or Rosamond, CA area list around $330k. Until I came home today, my family and I were intent on buying a home.
When I got home today, my wife was sitting in front of the internet and lamenting the "bursting of the California bubble" and the declining prices of homes in the area. I would like to think that no investment in a home (versus paying money on rent) is a bad investment...however, we're only going to be stationed there four years at best (or as short as two years, if the Air Force has other plans for us). With that short period of time to build equity in a home, are we smarter to consider renting instead of buying?
I realize that there is always risk associated with owning a home. Based upon my excel spreadsheets, we can afford a VA loan with zero down and all the costs associated with purchasing up to a $340k home. As well, over the next 2-4 years we will be capable of sticking to our plans of paying down personal debts using bonus money, pay raises, etc.
My fear, however, is that the California market--more specifically, the market in Lancaster or Rosamond, CA--will continue to decline to the point where the lower value on the home, coupled with the minor amount of equity we can build in 2-4 years and the 6% commission we'll have to pay to sell it when we leave will outweigh any benefits of homeownership. And this doesn't even count any money we actually put into the place?!?
If you knowledgable gurus have any advice in this scenario, I'd love to hear it. Mainly because I'm quickly starting to agree with my wife that we should consider renting for a year or two and then moving onto base when the housing reconstruction is completed. If you have, or know of, advice on local market trends and have access to a good crystal ball, I'd sure be interested in learning.
Thanks very much for your time, efforts and comments. I look forward to anything you have to offer!
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