- This topic has 14 replies, 12 voices, and was last updated 8 years, 4 months ago by SoCalBakerman.
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August 11, 2016 at 5:26 PM #22084August 11, 2016 at 7:45 PM #800525sdgrrlParticipant
My fiance and I are in escrow right now. Before we went through the pre-approval process we had decided we would only use his income. Based on his income they approved $350k for a condo and $400k for a home. I was shocked. There is no way he could take on all of the responsibility if something happened to me.
We are a bit hire on the end of middle class spectrum with our incomes combined. We could not comfortably afford a home over $500k, or I should say I wouldn’t be comfortable. I understand flippers, but I don’t understand how people are dropping a minimum of $550k on a solid home. How many wealthy people are there, or are they just completely house poor?
Basing data on this link: http://www.pewresearch.org/fact-tank/2016/05/11/are-you-in-the-american-middle-class/
80% of residents are low income, or middle class. 20% are considered high income. I don’t understand it. Where does the money come from?
August 11, 2016 at 9:11 PM #800528La Jolla RenterParticipantI’m not sure any buyer ever feels comfortable.
The dti ratio the bank used to approve your loan says you can afford it. The current ratio is fairly conservative. Maybe recalculate your tax benefit and you will fell better.
You should still be paying about what you would pay to rent a 500k home, so where is the discomfort?
August 11, 2016 at 9:29 PM #800529sdgrrlParticipantHi LJR,
We have been in Mission Hills for over ten years in the same place. We paid $1k in rent for about 7 years and then over 3 years they raised it $200.
We love the location, the home, the views, but at this point in my life I wouldn’t want to come up with $4k a month for a mortgage.
I’m pretty cheap and tight with my money.
I only financed my first new car about 3 years ago. Basic Jeep Patriot. No power windows and the fanciest thing is the CD player- which no one uses anymore lol.
It was very uncomfortable for a while. The payment is ridiculously low, but it still took time.
I would tend to agree with you that no one buying a home feels comfortable, especially if it their first. We are in escrow for our first home. After the first few payments we should find our groove.
August 11, 2016 at 11:04 PM #800533flyerParticipantCongrats on your new home, sdgrll.
It’s unbelievable to me how many people live beyond their means, so It’s refreshing to read your posts and realize there are still some who live in reality.
No one ever knows what the future will bring, including many top earners who were wiped out in the last recession, and other previous busts.
Even though we’ve made many investments of many types over the years, we’ve never lived beyond our means, and it sounds like you adhere to the same philosophy, which should serve you well.
August 11, 2016 at 11:41 PM #800534Mishpacha HouseParticipantBelieve or not….there is “never” the best time to buy. Too many factors are involved and most are out of your control and can’t be predicted with any certainty.
If you can afford to buy a property, buy it. All financial ‘catches’ must be included in the thought process. However, ‘fear’ must never be a factor.
work it thru’ logically. Do the math. Include your future plans in the equation. (jobs, hobbies, college, debt, etc.)
Yes, you mortgage will never go up …ever. and you do get to deduct interest which is a big and huge bonus for the first 5,7,10 years.
As a for instance (w/o divulging income) we get WAY more back in income taxes than we put into annual insurance and property taxes.
We’ve been walking that tight rope for several years now and see it continuing for at least a few more.
It adds up.by the time we lose our tax advantage (as is) we gain in the rent payments that we haven’t had to pay vs steady mortgage payments we do pay…for ever.
August 12, 2016 at 5:38 AM #800535The-ShovelerParticipantIt is mostly self inflicted by zoning.
You can’t force communities to build high density housing in special area’s.
Instead they need to open up the the land use restrictions in the more rural areas where they currently require 20 acre minimum lot size.
IMO people want to live in suburbia, but the planning commission imposes high density, which in reality most communities do not want.
August 12, 2016 at 9:56 AM #800545anParticipant[quote=The-Shoveler]It is mostly self inflicted by zoning.
You can’t force communities to build high density housing in special area’s.
Instead they need to open up the the land use restrictions in the more rural areas where they currently require 20 acre minimum lot size.
IMO people want to live in suburbia, but the planning commission imposes high density, which in reality most communities do not want.[/quote]
I’m glad they’re not doing that. I really don’t want SD to turn to LA #2.August 12, 2016 at 11:51 AM #800546FlyerInHiGuest[quote=The-Shoveler]It is mostly self inflicted by zoning.
You can’t force communities to build high density housing in special area’s.
Instead they need to open up the the land use restrictions in the more rural areas where they currently require 20 acre minimum lot size.
IMO people want to live in suburbia, but the planning commission imposes high density, which in reality most communities do not want.[/quote]
I agree that’s it’s self inflicted by zoning.
But i don’t see the planners pushing high density. If they were, we could upzone lots much more easily and variances would be issued.
Nimbyism is the problem. All the community groups are the problem because homeowners are most politically active and don’t want anything new built. In the end, decades from now, all their kids who can’t get high paying jobs will move away. Only those who have cash and immigrants who are willing to triple and double up will be able afford houses.
Cali is the center of tech. We should keep all jobs here, double our population instead of letting jobs go to Raleigh, Atlanta, etc…
Ask yourself, unless your kids are smart enough to get upper middle and above jobs, will they afford to stay in Cali? Statistically, not that likely.
August 12, 2016 at 7:21 PM #800559flyerParticipant“Ask yourself, unless your kids are smart enough to get upper middle and above jobs, will they afford to stay in Cali? Statistically, not that likely.”
Even at that, we’ve known many, even in those categories, who have had to leave San Diego and even the state for many reasons, and, imo, even if we can improve the housing situation, it won’t be significant enough to make a measurable difference in most people’s lives.
In the final analysis, there are no entitlements guaranteeing everyone will be able to stay in CA just because they want to.
August 15, 2016 at 2:26 PM #800630barnaby33ParticipantWhere will the water come from for all this growth?
JoshAugust 15, 2016 at 2:43 PM #800631fluParticipant[quote=barnaby33]Where will the water come from for all this growth?
Josh[/quote]What water shortage? San Diego never had a water shortage.
August 15, 2016 at 5:08 PM #800634anParticipant[quote=barnaby33]Where will the water come from for all this growth?
Josh[/quote]
That big giant body of water right next to California?August 15, 2016 at 5:58 PM #800635bobbyParticipantI think the “best time” to buy is when mortgage and prop tax < rent. I don't time the market.
August 17, 2016 at 12:38 PM #800690SoCalBakermanParticipantNimbyism, is not the problem, the problem is that houses are investments now and it make perfect sense to protect your investment from decline.
Now if housing was really only about a place to live and maybe appreciated 2-3 percent a year, then I would call it Nimbyism, but you don’t tell people to leverage them selves up 6-10x because some day they will have a payoff and not expect them to fight to protect their investments.
People would freak out if the government would tax 401k’s or IRA’s, even if we would be better off using the tax money to balance the budget.
The developers and the city could mitigate the impact of density by paying the homeowners either a check or a reduction in property tax for the impact to their investment, then at least homeowners would benefit from development.
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