Future housing purchase – trading up when rates are higher?

[bearishgurl]

[quote=Jazzman][quote=bearishgurl]
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I have a question for you Jazzman … Was LJ proper where you were looking for a SFR to buy before you got frustrated with the local market there and left SD? And if so, and you had been successful making an acceptable deal there, would it have been the first property you owned in a CA coastal county?[/quote]

I chose La Jolla because prices are at the stickier end of the spectrum. If you do the same analysis on many other places, coastal or otherwise, the price differential over the same period is an eye opener. Homes are over-priced. It’s a lot to pay for what you get, doesn’t matter what, so no justification in my view. I’m not swayed by arguments of affordability, or location.

To your question, we looked at La Jolla, Del Sur, Encinitas, Laguna Beach, Pasadena, Marin County, but decided the best of all places was Santa Barbara. We could afford a home in most of these places, but that wasn’t the issue here. I believe there is an innate sense of value for money (sadly being eroded by easy money). Many homes lacked aesthetic appeal, build quality, with tons of deferred maintenance. In a nutshell, pretty disappointing.

My experience with real estate is not confined to the last few years, nor just in the US, so my perspective is going to differ somewhat from yours.

Now I have a question for you? What is your interest in real estate?[/quote]

Jazzman, since those areas you mentioned are somewhat far apart, I take it you were looking for a CA retirement home? After all that searching, it REALLY sounds here like you wanted to retire in CA. Did you actually physically visit all those places and look at property/place offers?

Every single destination you listed here (except Del Sur) are well-established desirable CA communities and all are coastal except Del Sur and Pasadena (which is VERY desirable in its own right due to architecture and mature tree-lined streets in select areas). Aside from a stratospheric MR encumbrance, I don’t know much about Del Sur but know that homes within it probably wouldn’t have had deferred maintenance, due to being relatively new.

Correct me if I’m wrong here, but I take it from your posts that you could afford to purchase in all of these places but were unhappy with the size, location and/or condition of particular homes that were in your price range and/or that you were outbid when placing offers on properties of interest.

Had you thought of buying a fixer and fixing it up? After all, if you are retired or semi-retired, it stands to reason that you would have the time for DIY, no?

What happened with your favorite destination, Santa Barbara? If the houses you could buy were too small there, why didn’t you look in Solvang, Ojai or Santa Maria? Those towns are more fire-prone but very well-located (for traveling throughout the state) places to retire.

For someone who went thru all this house-shopping up and down this glorious state and could afford the prices, I don’t understand why you couldn’t have made a deal. If I REALLY wanted to retire in CA and found a property I REALLY liked (listed or not), I would have hammered it out on a napkin on the owner’s picnic table, asked them to sign it over a bottle of 2-buck chuck and came back to consummate it properly before giving up on Cali. But that’s just me.

I’ve been a CA RE licensee for three decades (Salesperson). My license is current but it has not been hung with a broker for about nine years. In addition, I am a licensed notary and paralegal (specialization: business lit) and possess all the requisite education for a CA RE Broker’s license but do not have the four years consecutive experience as a salesperson as required by DRE to qualify to take the Broker’s exam. Since I worked FT at a “day job” all during the time I was a “practicing” RE Salesperson (PT), I mainly had friends, co-workers, referrals and myself for principals and clients. I have owned several properties in SD County, both rental and personal residence, ALL in metro San Diego (south of I-8) and south county. A current homeowner, have been a SD County resident for over 35 years, a longtime daily runner in the dtn SD area and so am intimately familiar with several SD communities.

My lengthy primary work experience in the legal field includes criminal law, administrative law (tribunals), employment, labor law, collective bargaining, business formation and dissolution (SOS processing), RE Agency & other RE litigation and land use (All CA).

I’m from Alameda County but have many relatives in those “flyover states” whom I try to visit at least once a year.

[spdrun]

Four consecutive years? Couldn’t you find some old f**k of a broker who’s hard up and pay them off to rubber-stamp you? How hard does DRE check?

[bearishgurl]

[quote=spdrun]…How hard does DRE check?[/quote]

VERY hard. They have all the records from where every salesperson’s license is hung and with whom and for how long from day one.

A way around this requirement is for the Salesperson candidate to possess a CA CPA license or be a member of the CA State Bar. These candidates can pay for and sit for the CA RE Broker’s examination with no additional RE education above the salesperson requirement and no sales experience whatsoever (in anything)!

[bearishgurl]

I actually have well over the required amount of experience as a salesperson. It’s just not consecutive ….

[briansd1]

I recall jazzman saying that he bought in Maui. And he’s looking to buy a house in France. Good choices.

[spdrun]

VERY hard. They have all the records from where every salesperson’s license is hung and with whom and for how long from day one.

Exactly. So find some dried-up old prune of a broker who will let you do most of the work, “work” for them for 4 yrs, then take your exam.

Sweeten the deal with some nice kickbacks, and hope that the prune will be too senile (or dead) to testify to anything a few years after you gain your license.

NY is much more reasonable in this regard. 2-3 years non-consecutive (but full-time) experience covers it, and you also get some “credit” for buying and selling houses on your own, leases, etc.

[bearishgurl]

If I could have gotten “credit” for being a principal, I would have been a broker by 1990, lol …

[spdrun]

One more reason why I hope that Sacramento will either go bankrupt, or get hit by a quake centered on the Capitol while the State Assembly is in session. California is a beautiful place, but it’s run by unreasonable c*nts who should be washed into the sea via the Sacramento River.

[bearishgurl]

[quote=briansd1]I recall jazzman saying that he bought in Maui. And he’s looking to buy a house in France. Good choices.[/quote]

I recall the Maui post. But I’m always curious as to the motivation of someone who can afford some of Cali’s best areas, shops in those areas (or did they really?), purportedly REALLY wanted to stay in Cali, but then ends up buying somewhere else.

I feel if one can’t buy some semblance (even a fixer in the “right” location) of their “dream” retirement home in CA (even when they are in the fortunate position of having the money and/or is otherwise qualified to buy) in the current favorable environment of a combination of lower prices and rock-bottom interest rates, then they will never be able to. We are currently experiencing this incredible window of opportunity and no one really knows how long it will last.

Perceived “lack of inventory” be damned …

[briansd1]

I don’t know BG… according to some, it’s about time to leave California, so it might be wise to wait, haha…

If I recall, Jazzman was not too crazy about CA except that his wife has family here.

I can empathize with his position. But I believe that as long was we have population growth, Hispanic and Asian immigrants coming here, prices will move up, even if modestly.

My observation is that foreign immigrants, who come here as adults, generally have higher tolerance for high house prices than average Americans (I’m talking as a proportion of income here).

[spdrun]

Or maybe it’s that foreign immigrants actually HAVE money to buy property. Unlike your average American, who was conditioned from birth to spend like a drunken fool.

Need an iPhone, and iPad, and an iPod. Check.
Need 3000 sq ft of McMansion out in “lizardia.” Check.
Won’t look stylish unless they roll up in a Bimmer. Check.

Also, more immigrants (or 1st-gen children thereof) that I know are interested in buying rental property than the red-blooded Americans. The Americans think that being a landlord is beneath them.

[The-Shoveler]

[quote=briansd1]I don’t know BG… according to some, it’s about time to leave California, so it might be wise to wait, haha…
.[/quote]

I think a lot of people are freaking out of over the budget issues. Truth is there are a lot of states with even worse budgets (Texas for one of them surprisingly).(Hawaii also unfortunately).
I am no expert but I think we will see some sacred cows slathered before it’s all over.

But Hey maybe there will be a few more great deals to be had as well, I see people move to Vegas all the time (but they really really regret it mostly).

[Jazzman]

BG, I ask because “over-priced” usually only provokes a reaction from Realtors.

Not only did I look in all the places (and others), but lived in three of them. Yes, I’ve pretty much hung up the coat, and my wife draws a pension. I can afford to buy in all of these places, but one or two are not worth the bother. Santa Monica for example. We looked at fixers, REO’s, short sales, the court house steps …everything. We pounded the streets looking for deals, hammered sellers and lenders relentlessly wearing them down, looking for opportunities and weaknesses, even went against our brokers best advice. We were much more aggressive than most buyers, and were considered “savvy” by all those who represented us. Interestingly, our SB broker who put a lot of pressure on us, in the end relented, and agreed with me totally.

I really did my homework, and therein probably lies the problem. The more I became aware of the issues, the more skeptical I became.

We looked, and looked in Santa Barbara for two years. The situation actually got worse. In 2010, there may have been one or two opportunities, since local housing was depressed, but there were very visible efforts to stop price declines at all costs. It was a sacrosanct, protected haven. Ojai was an option and we saw many homes there, but it was ludicrous what sellers wanted in such a remote little place.

We did want to live in CA, but the poor choice of homes and asking prices was such a deterrent. If you are a cash buyer, it’s your money and you are much more reluctant to part with it than when using someone else’s. I once said to a broker who scorned us for our tactics; “Have to ever paid $x cash for anything?” You could see the penny drop.

If you have trouble understanding why we struggled so, I can only repeat that our experience is probably broader based than the average CA buyer, so our perspective is going to be shaped by obvious comparisons. One thing I have noticed with Californians is a reluctance to acknowledge that there are alternatives. Until you have lived them you won’t know.

[bearishgurl]

[quote=Jazzman] . . . I really did my homework, and therein probably lies the problem. The more I became aware of the issues, the more skeptical I became. . .[/quote]

Jazzman, from your post above, it almost sounds as if you may have “overthought” several purchases and thus talked yourself out of competing for them. And most of the areas you were shopping in no doubt had a preponderance of all-cash buyers like yourself.

[quote=Jazzman]We did want to live in CA, but the poor choice of homes and asking prices was such a deterrent. If you are a cash buyer, it’s your money and you are much more reluctant to part with it than when using someone else’s. . . One thing I have noticed with Californians is a reluctance to acknowledge that there are alternatives. Until you have lived them you won’t know.[/quote]

I understand that you may have thought the prices of properties sellers were “holding fast” to were a deterrent for you, because you were comparing them to elsewhere (out-of-state/out-of-country??). Each micro-market has its own pricing nuances and attracts a particular subset of buyers over other types, thus a potential buyer should only compare it to itself or the properties within it to each other. You need to ask yourself why this is so. Most CA natives and long-time CA residents (ESP those approaching retirement) have traveled extensively throughout the country and many have traveled outside of the country, including myself. It doesn’t take attempting to live in a particular locale to determine if living there would be a better or worse lifestyle than the area one is already living in.

For example, I have personally visited two islands in HI (Oahu 4 times), but not Maui. I have heard of it from others who have visited Maui and have seen photos of it and will agree that it looks very beautiful and peaceful. However, I’m a person who likes to hit the open road periodically. Driving ’round and ’round a smallish “rock” on its 1-2 “highways” would give me “island fever” within a year. Yes, I would like to visit Maui someday but don’t think I would want to live there. So, for this reason, Maui might be a good choice for your retirement home but not mine. Different strokes for everyone but you must admit that Maui is NOT the Cont’l US and one must take a helicopter, light plane or boat in order to leave the island.

Congrats again, Jazzman, on your recent purchase of a retirement home on Maui, HI and I hope it offers you and your spouse much enjoyment!

[Jazzman]

First, apologies to OP for the hijack, and just to reiterate your instincts are right on target.

BG, please don’t take it personally, I do like CA and love the people. I just think homes are over-priced, as do many who live there. My home town London is a LOT worse.

Yes, you are right. We talked ourselves out of it, because we knew it was a losing battle some time ago. And you are right in that it is horses for courses. Maui is small, remote, and island fever sets in, which is why we will buy our main home near Paris. We’re in Honolulu (30 mins away) at the moment celebrating my birthday.

[Author]

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