If you want positive words about buying, you are reading the wrong blog. If you have to buy then buy, but do not speculate on a 20% gain in five years.  I do not think the most optimistic person here would say this is a good deal noting your plans.

Warm regards to your coming addition.

My advice, is to buy only if you meet these 3 conditions:

1) Your income is stable throughout the upcoming recession. You know you will not be laid off in the downturn.

2) You have a mortgage you can afford so you can ride out the downturn. You won’t be forced into foreclosure when your ARM adjusts.

3) You don’t mind losing half of your home’s value. Prices will decline 35% – 50% from their summer 05 highs, and you don’t care about losing the equity.

I have 3 kids, and I rent. What’s the problem with renting a house?

In 2010, your Escondido house could be worth $280K. If you don’t care, go ahead and buy.

I don’t want to say anything harsh, as I admire your courage to come here and say you are buying a house. That takes guts. But I think it’s a crazy move. Unless you are a millionaire who doesn’t mind losing 200K, why in the world would you buy an asset whose value is pretty much guaranteed to shrink by half?

Your house purchase is like buying Lucent in May 2000. It had come down off its peak, and seemed like a good buy. You really wanted to start a 401(k) stock portfolio and get started with dollar cost averaging. That is your situation. Just like I watched my $5 LU stock go all the way down to $2.50, losing half my $2K investment, you will watch your house lose its value all the way down to $250K or thereabouts.

The best thing to do: put your cash in Treasury bills or FDIC insured bank rated A+ by Weiss ratings, and earn 5%. Rent a nice house for a fraction of the mortgage cost. For $2500/month you can rent a really nice house.

And if you have kids, think seriously about whether you want to be in the Escondido school district. I know some of the schools have good ratings, but very few. Think about the coast or Poway schools. Coast if you can afford it.

Oh, you want to go back to Denver. Then you will be selling at the bottom of the market, when 10% of the MLS will be foreclosures. So you are not in a position to ride out this downturn, since you plan to sell at the time we predict will be the bottom.

Wheew, if I reached you, then I can chalk up household saved.

One more thing – do you know how hard it is to work when you have a baby around? Even with a nanny to help out, baby will cry for mom. Your wife may not want to leave her baby in day care, and prefer to raise him herself. Then, your ties to the mortgage will not give you the flexibility to have mom at home. Your baby will be better off with mom at home, and he won’t know the difference between a yard owned by the bank or by the landlord. He really won’t. He will know it is his mom holding him in her arms as she rocks him to sleep, vs. being laid down in a cot inside a noisy day care room. Once your son is born, you will see what I mean. You don’t feel it yet, but you will.

So I vote for a rental, to support a flexible family lifestyle, and to give your young family a good financial start.

I would second sparkey’s comments. You’re probably read enough of this blog to see what everyone’s opinion is. If despite reading this blog for 1 year, and despite delaying a purchase until now, you’re about to close escrow on a house, then I think that you’re pretty much decided that you’re ready to buy.

I don’t think that even our most optimistic realtor friend would predict a 50k-75k equity gain on your Escondido house in 5 years. I’m sure there are non-monetary quality-of-life benefits to owning that can justify your purchase.

Check and see if there’s a St Joseph statue buried somewhere on your new property. 😉

Bad decision buying a house right now. In 5 years it will definitely be worth much less than you are paying for it. That is just the cold, hard truth.

This blog is not about being negative, it is about being realistic and most important honest. Nobody here is looking to sell you anything.

Also, we are not all “priced out of the market”. I could easily buy a house at todays prices but I choose not to because I realize it is stupid to purchase something that is going to go down in value, that is moronic.

Seriously guys, this clown is a troll…”everyone wants to live in San Diego…” bwhahahahaha. Where have we heard that one before.

Nobody with half a brain has been reading this site for a year and then suddenly decides that now is the time to buy. That is the most idiotic thing I’ve heard in my entire life. Davidpeace, get lost brother. You don’t need to troll here.

Ok, let us break this down with simple math.

 Calculating with a 20% increase in 5 years. Buy and sell in 5 years$485k * 120% = $582k   New home value$582k * 6%    = $35k    Realtor fees to sell$582k – $35k  = $547k   $547k – $485k = $62k    ProfitThis is only mortgage not HOA, Property tax…and other fee/maintenance Rent for 5 years$3500 – $2500 = $1000$1000 * 60 mth= $60k    Not including interest 

Purchasing this house has to help your psychological well being to be a good deal because it is a lot of risk and you will most likely come out negative.