Help – Considering San Elijo Hills.

[h82rent]

VERY long time reader, infrequent poster. For the past 2 years or so, I’ve logged onto this site just about every day. I know most of the login names and personalities. I’ve been both entertained and educated.

I have been searching homes in SD, watching the prices tumble for a bit. But today, I was inclined to go check out a home in SEH. I have to say that I enjoyed the community very much, and am familiar with the surrounding areas, which I like as well. I could definitely see myself owning there – maybe for 5 years or so, maybe more?

As much as I don’t want to divulge my financial situation, I will, so that we can have a more meaningful discussion. By mid-March, I expect to have about $100k that I could put down on a home. I have most of that right now, but a bonus will push me to about that level. I have a decent amount in 401k, which I could draw from (and pay myself back) so I could come up with a 20% downpayment.

I am looking at a SEH home that is currently asking $530k-$560k. I know the current owners paid $525k in 2004 for it. They say it’s a pre-forclosure/shortsale. As you can tell, I would need to borrow from my 401k to get a 20% downpayment.

I currently rent a nice (but very small) place in La Jolla (in condo hell) for $1300/mo. I have been very patient up to now. But you know, I’m in my mid-30’s, worked my a$$ off my whole life, obtained a couple degrees and have earned a decent income (not outrageous, but quite decent). And I’m sick of living like this. I want to own my own place that I can be proud of. I want to own a place that someone with a good education and a good position should be able to enjoy. I’m a homebody at heart, and would be very happy in a nice place.

So what do people think? Come on, lay it on me. I know people on this site don’t hold back.

Also, to all those realtors out there… does anyone know the area well? Should I come in with a low offer – maybe $500k? Should I represent myself through ZipRealty or something? Does anyone want to represent me (SD Realtor)? I have about four or five friends that could, but I’d rather go with someone that really knows the area, has even more experience, and would be willing to work with me on costs – obviously if I’m dipping into 401k, I’m not necessarily lighting cigars with hundred dollar bills. Not even singles.

Thanks for all comments. Positive and negative. I’m thick-skinned. Thanks everyone.

[PerryChase]

You sound like a single professional. I assume you have no wife or family. You’re renting in La Jolla/UTC so I assume that you work around that area as well.

Don’t buy in SEH because:

1. The commute will be a nightmare.
2. SEH will become foreclosure central and prices have a ways to drop.
3. HOA/Mellos Roos are high.
4. SEH is really a “low-brow” neighborhood desguised as “high-brow.” Not worth the money in my view.

Rent a nice house for $2500 so you can get used to the payments (interest that would be out-the-window anyway if you bought) and enjoy it. Get familiar with different neighborhoods for the next 4-5 years. At that time you’ll find a better environment to buy.

I recommend you buy an older house near your place of work. Choose a place without HOA or Mello Roos and use the savings to fix-up the house nicely before you move in.

Don’t buy at SEH. You’ll regret it.

[greekfire]

Just judging by your tone it would seem that your heart and smarts tell you to sit tight and continue renting, but the materialistic libido part is saying, "Hey, your an accomplished professional and you deserve to be a homeowner."

These are the same impulses that drive many to purchase luxury sports cars (generalization), the degenerate gambler to lay down $2000 on Duke, and what drove many to buy at or just before the housing bubble's peak. It is simply not a sound investment, no matter if you have itchy feet or not.

It is not your fault that the time when you are finally able to afford a decent home just so happens to come during the recent aftermath of the largest housing bubble EVER. Similar homes that you are looking at were worth half of what they are no more than a few years ago.

I have talked with many professionals like yourself, some even more established, and ALL of them say that they would not be able to afford a home at these prices. Even they know this situation is fubar, the only thing is that they are on the winning side of things…only temporarily, however.

If you were planning on living there for 10-20 years, I might say go for it if you can deal with knowing that prices are likely to drop or stagnate for at least another 3 years or so. Otherwise, do the prudent thing and continue renting. Maybe consider moving up to a nicer property or community. You'd be surprised. To tell others, "I'm renting right now," sounds so much smarter than it used to.

[sdcellar]

Perry pretty much nailed it, so I don’t have much to add, but I am curious. You say you’ve been patient, but now you sound like you’re done with that and ready to buy. Why?

I mean, sure, prices are better now than when you first started following things, but they’ve got more to give. You say you’re ready to commit to a place for 5 years or more, but do you really mean that? You better, because there’s an outstanding chance that you won’t be able to sell it for what you paid for it for a number of years to come. You think you feel trapped in a condo/apartment…

Even worse, consider the possibility that you’ll see the $100K you worked so hard to earn get slowly eaten away if prices continue their downward slide (and there’s really nothing to indicate that they won’t).

If it’s a nicer house you want, do like Perry says, check out what’s out there, maybe pay a little bit more in rent, and let that $100K work for you for a while.

[sdrealtor]

Ditto everything Perry said except the part about SEH being Low Brow. I say Mid Brow is more accurate.

[booter1]

Best areas for families in North County Coastal?

I am considering a job offer which would cause us to relocate to North County Coastal from the Chicago area.
Have four children ages 8 thru 15 years old. My wife is a native Californian and would like to be closer to family.
We lived in Laguna Niguel 15 years ago but realize how much everything has changed.

We are not planning to buy although financially secure.
Our intent is to find an large home to rent(2-3 year lease)
(5/3 3500 sq ft.)in North County Coastal that would be close to a private school we are considering in Solana Beach.

I don’t need to commute downtown but would need to go to the airport periodically but have quite a bit of flexibility regarding when I go to the airport.

Any thoughts from the group on areas to look at?
In looking at Craigslist, backpage, etc. It seems like Olivenhain, parts of Encinitas, etc might fit but I don’t know the actual areas that well.

Would welcome any thoughts from the group. Thanks!

[h82rent]

PerryChase, your assumptions are correct.

I work by the 163/15/52 intersections. But my hours are flexible, and I regularly drive all over Southern CA (between LA and SD mostly).

sdcellar, why now? Great question. I guess I haven’t found a neighborhood I liked, in an area I liked, and be able to get into it (even though I would have to borrow into 401k – which I always advise people not to do).

It should be a warning flag to me… I consider myself to be quite finacially savvy.

As I said, I’ve been reading this forum for a long time, and have felt like chiming in so many times, but haven’t. I will more often now. The thing I like about it, no matter what bakgrounds and personalities we have, it seems like there are some decent thinkers on the board.

So, thanks for the support and feedback. Man, it’s like a support group for rehabbing buyers or potential buyers!

I might just sit tight for this summer and watch more, but we’ll see.

I’d welcome any other thoughts.

[Anonymous]

booter1:

South Carlsbad has an area called Aviara that is very nice, not far from the ocean, near the Bataquitos Lagoon and not too far from the I5 freeway. Not sure how much you want to spend, but here are two sample homes for rent in there. I have seen others in that area renting from 2700-4000. I have family that actually live a block or two away from the second listing, on Mimosa and it is a very nice community. As proof, the Four Seasons Aviara is a 1/2 mile away, LaCosta Resort is about a mile down the road. In the event that you would consider public schools, you can’t go wrong with the elementary and middle schools that are a few blocks away either.

http://sandiego.craigslist.org/apa/279074105.html

http://sandiego.craigslist.org/apa/277545326.html

[CardiffBaseball]

I second the Encinitas/Olivenhain idea. Coming from the Midwest, Olivenhain might have more appeal, unless you were quite urban. More land, horses out roaming…

Nothing wrong with Aviara either.

I also think in terms of bang for the buck eastern Encinitas isn’t bad. (east of el camino real, I am west). I might head that way when the kids are a little older and they won’t have to move into new schools. It’s still close enough to the beach that it’s maybe 5 minutes more than what it takes me yet there seems to be a bigger homes relative to the square footage.

[kicksavedave]

H82rent…. think about it this way. You borrow $50K from your 401K… buy a nice place which you are happy in… but you sit and watch the property value drop by, oh, lets say, about $50K. How would that make you feel? It would make me go insane, personally. Like saving up $50K over how many years, then simply lighting it on fire. And if the numbers are more like $100K, then ugh, I can’t even imagine. How long did it take you to get that money INTO that 401K? It could be gone in 6 months…

If you wait it out a little longer, you might easily be able to preserve that precious savings/retirement money, and still get the house you want in a neighborhood you like.

[Anonymous]

Long time lurker, first time poster.

I’m with Perry on this one. Rent a house. Why are your only two options buy (and lose big time) or rent a crappy condo? Rent a house for 2500 or less and revel in your smugness as prices continue to drop. I just relocated to San Diego (from Phoenix) in October and have now just started to look for rentals (have free corporate housing till April). You can get a lot of house for 2500 bucks in areas that would be a lot closer to where you work then SEH. Craigslist is your friend.

– BubbleNinja

[Raybyrnes]

BubbleNinja,

Obviously everyone is working with incomplete information but I would say the idea of increasing my rent to get use to the payments is out. If you are renting continue to ave so you ahve more for the Downpayment. As for tapping the 401K, clearly a mistake. Pay the PMI which is now dedeuctible let the 401K ride, consider reducing contribution to the company match, and wait to build some equity on the home. Once you have the equity reappraise and drop the PMI. I have been though SEH. They did a very nice job with the community. Lot more building to take place so supply and demand might keep prices form appreciating.

As all other sposters noted, consider the single family home in areas outside the Mello Roos zone. Clearly you lose the luster of that new community prestige but the 300 a month you save will make it feel worth while. You can think of that additional 300 that you put into the Roth or 401Z as a blessing in the long run.

[ariffe22]

I was reading through this old thread and wonder if h82rent followed the advice and counsel of the group or pulled the trigger in SEH. Seems like so much has come down in SEH since these postings.

[ariffe22]

I was reading through this old thread and wonder if h82rent followed the advice and counsel of the group or pulled the trigger in SEH. Seems like so much has come down in SEH since these postings.

[ariffe22]

I was reading through this old thread and wonder if h82rent followed the advice and counsel of the group or pulled the trigger in SEH. Seems like so much has come down in SEH since these postings.

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