Buy or wait?

[treehugger]

Oceanside

[joec]

I lean towards the buy now if you can afford the payments and plan to just settle in San Diego…

I agree from looking at all these posts that these never buyers just have their lives go by and end up not doing anything. You will be “stuck” thinking it’s too high and a crash is coming, but honestly, no one really knows, but you DO know having a set place is a pretty nice feeling.

In the grand scheme of things, the property may go up or down, but ultimately, if the payments work out pretty comparably (for a similar place), I also think it’s not that bad to buy and maybe cheaper even with the tax breaks and you’re decent incomed.

One thing I’ve noticed after buying is the time “wasted” just looking every weekend and it’s a load off to have a place you know will have the same monthly payment month after month.

We know of someone who rents a home for 4k+ and had to leave/move in like 1 month since the owner came back and wanted to move back. Talk about major stress for the kids/schools/marriage.

If you had kids/more stuff in general, moving will be a major pain and a huge stress point. I know I’d hate to do that myself.

The good thing is you have time so you can shop and see what’s out there, but with 1-2 months supply tops now in most areas, pickings are slim to nothing so either you pay a ton or will never buy a house if it’s priced well or located well.

You mentioned SR and prices are pretty high there, unless you wanted an older or smaller place…but that’s pretty much how things are now so if you really find a place you love and can afford (which is very hard IMO), I think buying is good.

Not to mention the recent posts about lack of any new housing, builders simply can’t build or WON’T build anything less than 600k+ SFH.

That and the posts about demographics (others in your age group) also looking for housing and you have a major supply/demand imbalance…

I read some new CV places being released for 1 mil and 1.5 mil?

[Panderso]

It’s definitely interesting to hear everyone’s opinions. I think we’re going to try to buy. Inventory is tight right now but we have time on our side so we can wait for the right place at an okay price. I did notice a bunch of price drops at the end of summer last year so fingers crossed the same thing happens this year.

I’m leaning towards keeping the condo too. I ran numbers today on keeping the condo vs putting the money in the stock market, assuming 7 percent annual return in the market, 3 percent annual rent increases, and 2 percent appreciation (and really, I think the numbers for rent and appreciation are quite conservative considering actual historical data) and it still comes out way in favor of the condo. And yes, I considered maintenance, improvements, less than 100 percent occupancy, depreciation, PALs, depreciation clawback on the sale (I’m an accountant).

Again, we don’t need access to that capital any time soon. We would be keeping the condo for the long haul. I could see our future kids using it for college or us even retiring in it when we’re older.

Yes, it’s a risk to keep money in a rental, but we’re young, are saving like crazy, and I think some calculated risk is how you build wealth. People are trending towards the overwhelmingly negative right now on home prices — yes, prices will dip at some point, but assuming less than 2 percent annual appreciation over 30 years in coastal CA is a bit silly IMO.

[Coronita]

[quote=Panderso]It’s definitely interesting to hear everyone’s opinions. I think we’re going to try to buy. Inventory is tight right now but we have time on our side so we can wait for the right place at an okay price. I did notice a bunch of price drops at the end of summer last year so fingers crossed the same thing happens this year.

I’m leaning towards keeping the condo too. I ran numbers today on keeping the condo vs putting the money in the stock market, assuming 7 percent annual return in the market, 3 percent annual rent increases, and 2 percent appreciation (and really, I think the numbers for rent and appreciation are quite conservative considering actual historical data) and it still comes out way in favor of the condo. And yes, I considered maintenance, improvements, less than 100 percent occupancy, depreciation, PALs, depreciation clawback on the sale (I’m an accountant).

Again, we don’t need access to that capital any time soon. We would be keeping the condo for the long haul. I could see our future kids using it for college or us even retiring in it when we’re older.

Yes, it’s a risk to keep money in a rental, but we’re young, are saving like crazy, and I think some calculated risk is how you build wealth. People are trending towards the overwhelmingly negative right now on home prices — yes, prices will dip at some point, but assuming less than 2 percent annual appreciation over 30 years in coastal CA is a bit silly IMO.[/quote]

Well, in that case. I’m glad you crossed over to the dark side 🙂
Congrats!

[(former)FormerSanDiegan]

If you are super savers and can afford it, it’s a no-brainer.

[mixxalot]

True but it is a bubble and I’d rather buy stocks and wait the bubble out til it pops in few years. It crashed before and will again once the speculators are out.

[bewildering]

[quote=mixxalot]True but it is a bubble and I’d rather buy stocks and wait the bubble out til it pops in few years. It crashed before and will again once the speculators are out.[/quote]

From the Shiller PE Ratio the stock market is more overvalued than housing. Bonds are also historically overvalued. Maybe Rich can weigh in but everything seems historically overvalued. In my opinion housing looks better value than stock at the moment for home owners (maybe not investors).

[mixxalot]

My stocks are doing better than real estate returns and are more liquid. Plus jobs are not secure and if a bigger paycheck was offered elsewhere, its easier to do so when renting than owning. The opportunity cost of 100k is better invested right now in high growth stocks than real estate where it is sunk into a downpayment. I will wait this time and hopefully it bursts when the Fed finally decides to raise rates.

[joec]

The stock market is risky because it’s at historic highs now, but also, good luck living and going to the schools that your stock ownership gets you.

At the end of the day, you have to pay to live somewhere so if you have kids (which seems like the plan) and care about schools and MORE important, the general economic wealth/education of your neighbors (economic segregation), you will need to buy a pretty expensive place to start.

A lot of these single/no kid male types totally have no idea what it’s like IMO when you have kids and how your life will change so pay no attention to them since their perspectives are way off IMO (at least compared to people with kids)…

Also, compare rent vs own of the same place and the rental housing is really insane. At econo-hell 4S, rent for homes are 4k/month and I think most people who bought in 09/10 pays like 2k/month mortgage (not counting prop tax). Add in tax break for such a high mortgage and high prop tax and you are prob doing much better if you bought early…even if you didn’t buy then, run your own numbers and decide what works best.

Since we know of plenty of people who rent homes here and pay the 4k/month, rents are just too high to not run numbers and see what makes the most sense…of course, if you can rent in a much smaller place for 1k/month and can get the schools you like, then that’s probably a better plan for now.

[spdrun]

Why do you need to send your kids to the best high schools? Save the fucking money, spend it on after-school enrichment programs, books, and travel with the kids.

States like CA, NY, and NJ tend to have good public universities that aren’t hard to get into if you’re in-state. Why shoot for Stanford, Hah-vahd, Princeton, or Yale when you can send kids to an decent but not top public school system, have them get good grades, and have them go to a public university. High-end private universities are better for grad school.

I’d sooner my kids finish Rutgers, SUNY, SDSU, or one of the UC schools with low debt than graduate with a basket-weaving degree from Hahvahd.

[scaredyclassic]

[quote=spdrun]Why do you need to send your kids to the best high schools? Save the fucking money, spend it on after-school enrichment programs, books, and travel with the kids.

States like CA, NY, and NJ tend to have good public universities that aren’t hard to get into if you’re in-state. Why shoot for Stanford, Hah-vahd, Princeton, or Yale when you can send kids to an decent but not top public school system, have them get good grades, and have them go to a public university. High-end private universities are better for grad school.

I’d sooner my kids finish Rutgers, SUNY, SDSU, or one of the UC schools with low debt than graduate with a basket-weaving degree from Hahvahd.[/quote]

SDSU is actually difficult to get into now.

weird but true

[spdrun]

Isn’t the UC system guaranteed-admission to at least one school for the top 10% of California HS grads? It’s easier to get a high GPA in an HS that’s not top-ranked.

[scaredyclassic]

sat scores avg at cal poly were same percentile as ivy league school i attended 30 y. ago.

crazy, man

[FlyerInHi]

Basket weaving or not, Harvard makes good conversation and makes parents proud. Top brand. Bragging rights.

[spdrun]

Thanks, but I’d rather drive a Miata than a Ferrari.

And “my kid is an attorney with next to no debt, about to buy his first house” is a lot more brag-worthy than “my whelp graduated from Hah-vahd, $200,000 in debt and is beholden to a decade or two of working 60 hours a week with one week off per year.”

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