This issue strikes a personal cord with me. I’m in my mid 20s and have a graduate degree. I earn over the median income of the area but find a hard time purchasing a property without devastating my monthly cash-flow. This is probably the issue many of us have. And someone commented that if we graduated anytime between 1993-1999 we wouldn’t even be having this discussion. For one, I do believe in real estate market cycles from an economic standpoint. Market speculation takes time to travel through the appropriate channels. In my view, we are only at the tip of the current real estate down turn. The media is still somewhat bullish on real estate although they have soften up a bit lately (I guess doom doesn’t sell to well!). Reminds me of the stock analyst recommending 98% of all stocks shortly before the technology bust we had in 2000.
In regards to San Diego or any part of California being a good place for young professionals, my answer would have to be depends. California is a great place to earn a sizable income. To be honest, with a degree in hand you can get a job almost instantaneously earning above the U.S. median income. The thing is, everything is relative. If you are young and starting out your career, this is what I would recommend (not only do I recommend it, I’m living it). I believe the market will bottom in three to four years (so 2009 or 2010). Since many of us are still wet behind the ears in our professions, we should focus on doing what we love and progressing upward. Save as much as you can by renting. If you own then you are way ahead of the curve. Invest your money in different products and set aside enough for a down payment – your goal should be $40,000 for a down payment in 4 years which is very doable. If the market by those times is not relatively affordable, what I mean a ratio of (your income X 3.5 or 4) then it is time to pack up and go. I’m assuming many will want to eventually have a family with good schools available. So if this is the case, you will have:
• 4 to 5 years of professional experience in your profession making you a somewhat seasoned individual.
• $40,000 in down payment monies (minimum)
• The ability to take your California dollars else where
This is a win-win in my view. If California is over valued then the choice is simple, pack up and go east. You can pick many nice cities where $40,000 will go an extremely long way. If California is within your pricing range, then it is time to buy and you will be earning more as well due to raises plus COLA. Seems like a plan. Anyone doing this or something similar?
