Help – should I sell and rent or stand down?

[confusedinSB]

Ok here’s the readers digest version of my problem. Looking for any and all thoughts.

Let me cavet this whole post in saying it’s all about the schools. We have two young kids, and the schools in our area aren’t great.

We own a very nice, 1500 sq 3/2 in a nice area on the outskirts of the South Bay of Los Angeles. We paid under 300k, and can probably sell for ’round 700k. we pulled some money out, but figure we’ll pull 200k. So far, so good.

We want to move to an area where the homes start at 800k for a dump and a 950k is more realistic. I’m nervous about an interest only in an economy that’s changing. So there’s the suggestion of moving to the sideline by renting and waiting for prices to move closer to our goal of high 7’s.

We found a rental in the area for 2600, which is smaller, but nice enough.
The schools in this area are amoung the best in the state. But we need to decide, like today!

All things being equal we probably currently pay 4k a month in mortgage, home eq, taxes, homeowners, home waranty.

Thoughts?

[avidsaver]

How old are your kids? I’m guessing that you’re looking into moving to Manhattan Beach since you mention that the schools are among the best in the state. My understanding is that the school differential really doesn’t hit until the kids hit middle school though. But it depends… Wiseburn, El Segundo, Manhattan Beach all apparently have good school districts.

I’d rent. But I do rent. In El Segundo. For the school district.

[cashman]

Take your 700K and run. Rent for two years, then look around. If you’ve been reading on this site the overwhelming consensus is anyone buying today will regret it tomorrow. I believe most housing in LA that is currently priced under $1M will drop $100K this year and another $100 next year at a bare minimum. The optimum time to sell in LA County was 2-6 months ago, but it’s not too late. Don’t overprice, as it will sit, and you will lose more as each month goes by. 2007 and 2008 are going to be nasty years in real estate.

[confusedinSB]

100k this year? I think that’s a bit much. I’m thinking 5% for the next year or two. But one never knows.

In the end, I felt that, though the place was a good price, and in the right school district (MB), we do have to live there and be happy about it. And we love our place – the new place was just ok. So we passed.

But we’ll keep looking.

The other point is, while homes are going down, if you plan on making the area your permanent home, yes, it may lose some $ right now, but it will come back in a few years.

JMHO.

[avidsaver]

Good for you for passing. At the end of the day, you need to be happy in your home. Especially with the possibility of declining value which would keep you “stuck” there for longer than you might prefer if you don’t initially buy your “dream house.”

You’re right that no one ever knows, but the consensus around here is that the drops will be greater than 5% for only a couple of years. If you look at the early 90s to 96, prices dropped substantially. If you can stand seeing the value of your home decrease year after year (because after all, you’ll still be enjoying your home), buy, but just be aware of the possiblility (no crystal balls, right?) of future depreciation.

Yes, MB is a great school district, but with the $ that you’re saving, perhaps you can put your kids in a good private school in the interim, or if they’re young enough, the elementary schools may be just fine.

As a side note, I watched my neighbor put his two bed condo on the market at $569K and it’s just sitting… I think that the price has been reduced twice, but there seems to be no traction. It would be odd to see someone living in the EXACT same situation as me and paying MUCH, MUCH more than I do for the same space (I pay $1550 in rent).

Good luck. I’m waiting for the right time too…

[confusedinSB]

thanks much.

[Anonymous]

I currently have my house in the market for sale in Murrieta, CA. Currently paying 4500 a month. I can no longer afford that payment. Should I rent or buy a smaller property. Am self employed.. What do you think?

[Anonymous]

I currently have my house in the market for sale in Murrieta, CA. Currently paying 4500 a month. I can no longer afford that payment. Should I rent or buy a smaller property. Am self employed.. What do you think?

[temeculaguy]

Confused, you should rent. Get out while you still can and jump back in a year or two, you should be able to make a seamless jump (buying in the better area for close to what you sell for now). Things won’t likely fall 50% there but 10% a year for 2 years is very realistic.

Mostdmk, it may be too late for you. Since you can’t afford the payment, price aggresively. Check the other boards, Murrieta has fallen to pieces in the last two weeks. Builders are cutting prices by 20%+, in 100k chunks. There is an avalanche of foreclosures in the pipeline in Murrieta from the nationally publicized real estate scam there, it’s currently has the third highest rate of late mortgage payments in the state. Hurry.

[temeculaguy]

Confused, you should rent. Get out while you still can and jump back in a year or two, you should be able to make a seamless jump (buying in the better area for close to what you sell for now). Things won’t likely fall 50% there but 10% a year for 2 years is very realistic.

Mostdmk, it may be too late for you. Since you can’t afford the payment, price aggresively. Check the other boards, Murrieta has fallen to pieces in the last two weeks. Builders are cutting prices by 20%+, in 100k chunks. There is an avalanche of foreclosures in the pipeline in Murrieta from the nationally publicized real estate scam there, it’s currently has the third highest rate of late mortgage payments in the state. Hurry.

[SD Realtor]

Get comps, talk to a realtor out there who can help you with short sales, and price your home to the bone to get out of the mess. Get a short sale going immediately.

SD Realtor

[SD Realtor]

Get comps, talk to a realtor out there who can help you with short sales, and price your home to the bone to get out of the mess. Get a short sale going immediately.

SD Realtor

[SD Realtor]

Duplicate

[SD Realtor]

Duplicate

[waiting hawk]

Get a baseball bat, ski mask, and go after anyone that said buying that house was a “good idea”.

Since most on here are not crazy like me, you should probably do what SD Realtor stated above.

edit ps.. SD Realtor, isnt it almost worthless to get a short sale going if you are not 3 months behind without a NOD?

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