Please Help: Don't Know What To Do
Hi,
I am not a professional real estate investor. However, I do look at my home as an investment. I hope you can help me with this situation.
My husband wants to sell our house and move to San Diego where he will be paid much more than he is now . I'm terrified. The housing market looks TOTALLY out of control down there (we're in Oregon). I'm afraid that we'll take the plunge, buy a home, the SD market will crash, and we'll lost BIG TIME.
To be specific the company in SD will pay him about $120K per year. He makes $68 per year here in Oregon. But it's a po-dunk company, less established than his current company. So, if we go, what happens if they lay him off or get bought out? We're homeless, 'cause there is no way that we could pay a $450K mortgage without that salary. Oh, and a 45)K mortgage only gets a home that has NO property and is a full one hour drive from where he would work.
BTW - we have two kids.
I know that I"m kind of rambling. Please someone tell me, from a Financial Security/Investment point of view, should we:
A) Stay here in Oregon
B) Take the job in SD, but rent down there and keep our home here in Oregon
C) TAke the job in SD, sell our home and buy a home down there.
Please someone answer, I"m feeling so torn by this and pressured by my husband.
Are they offering relocation expenses as a perk? Huge sticker shock from Oregon to SD from the sounds of it. I would try to hold onto your Oregon home and rent it out. You could have a property management company or friend/family keep an eye on the house for you.
Decide if you want to rent or do you have enough to buy in SD and keep the house in Oregon? If so, and things do not work out you can always sell the house in SD and move back to Oregon.
If things do work out you can always sell the Oregon house in a year or two. This could be advantageous if the market continues to appreciate. Keep us posted!
Also, I've seen cost of living comparison websites out there that may help with your decision. It may be that 120k ain't worth much more than 68k where he is, and it's just the "Grass is greener" syndrome we all fall prey to sometimes. Don't recall exactly what the sites are, but you can probably google it, and find them.
I gotta tell you this doesn't sound like a real estate question at all to me.
You're afraid that if you move to SD your quality of life will deteriorate (expensive housing, long commute, no land). And that the security of your known environment will go away.
The husband is excited by what he sees as a big improvement in his job situation. The fact that the company is less secure is less important to him than the fact that he sees this as a move up which, even if that company falls apart makes him more employable in the future.
So my advice is to stop taking a lifestyle issue and trying to make it into a business/RE decision. Discuss your fears with your husband on the basis of your fears, not by trying to hide behind some real estate mumbo-jumbo.
god, I feel just like Dear Abbby.
HI,
Thank you for your replies so far.
Though this is partly a lifestyle issue, it is primarily a real estate issue. If you knew me you would understand. I am a small business owner who is very concerned about spending money/investing wisely no matter what I do.
I guess what I want to know is if you think that it is foolish to buy in San Diego right now? Do you think that it is a bubble waiting to burst? Or, if not a bubble, a market that is going to go flat for the next 10 years. I"ve read predictions that the market may do just that in 2005.
Since you are real estate experts I was hoping to get your opinions.
I have looked at a cost of living caclulator, but well, they aren't very accurate.
You're right about the "grass is greener" syndrome. I was hoping that some of you would give me so info to shake him up a bit - confront him with reality.
OR, that you would say my fears were unfounded and that the outrageous marked in SD is likely to continue with skyrocket/record growth.
Thanks for you time. Love to hear more opinions.
Oh yes we get a relo package, but it isn't top of the line.[ Edited by mafunk on Date 06/04/2004 ]
What is it exactly about purchasing a house in SD that scares you? Are you afraid of paying "too much" or that whatever you pay won't appreciate (or may go down in value)?
If your husband keeps this new job and you end up staying there forever, what's the difference? You would ride out this cycle and still be there when it rises again.
It sounds more like you're afraid of getting into a house whose value may suddenly drop precipitously in a bubble burst, AND your husband loses this new job AND he can't get another comparable one...all at the same time! I guess the real question you have to research is: how likely is/are all of these things to happen?
I also agree with the suggestion above about renting out your current house--it'll pay your mortgage, continue to appreciate, the income would offset your debt-to-income ratio when you go to finance your new house in SD. It also gives you some leeway in deciding whether to rent or buy right away in SD.
Good luck.
Andy[ Edited by arytkatz on Date 06/04/2004 ]
I have lived in San Diego before. I just loved it, but I moved because it was way too expensive to live there. Now I live in GA. It is so much cheaper to live and invest in GA.
I don't think $125000/year salary will go too far in San Diego, but it all depends on what you want. I loved beach, weather, people, and eveything about San Diego except cost of living. Since housing costs so much more than other parts of country in San Diego, you will have to sacrifice your standard of living that you are used to in Oregon.
I still dream about going back to live there one day, but I don't think it is going to happen. I just cannot imagine trading my huge 4 bedroom house to a little california bungalow.
Have you been there before? If you have not, maybe you should go there and see it for yourself and decide what you really want to do.
mafunk,
Glad to meet you.
So you have your own business, your children are in school there, they have their friends, you have yours and you enjoy your lifestyle the way it is. It certainly is predictable and comfortable this way isn't it?
I don't see you wanting to leave your home, I don't see you wanting to convince your husband of anything except to stay where you are. Does it really have anything to do with 'bubbles" or does it have to do with what you believe is right for your family.
John $Cash$ Locke
Everyone has made some good points and, if I can, I'll add my two cents.
Good luck trying to find a decent home of 2,000 sq. ft. or more in a nice neighborhood for $450K. We have a 2,100 sq. ft. home we live in and we are refinancing to pull some money for other investing. The appraisal shocked my wife and I. Try $510K and we live in Ramona not La Jolla or Rancho Bernardo.
I'm not trying to discourage you. It is beautiful here but we pay dearly for it. Do all your homework and then make the move only if it makes sense to you both.
Good Luck.
Dave
[addsig]
As far as being concerned about the real estate here, it really depends on how long you plan to stay. If you turn around a leave in a year or two I would rent, commit to five+ years and I would buy. SD is expensive ... property values are high, gas prices are high, taxes are at 7.5% but 120K will go furher than you think specially if your bringing equity with you and working yourself. People live down here making less. You'll also have to consider other things like road time since alot of folks are commuting 30-1hr each way. Ther are some nice new communities going up that are less expensive but you wil have to sacrifice SqFt. ..but think you'll have the beach, desert, and mountains within twenty minutes and of course the weather.
For school districts I would look in Poway or even Hemet.
In a nutshell, from a business point of view, it is nuts to buy a home in SD right now, especialy on a 125k income. Keep your home in Oregon, rent it out, rent a home in SD. You will almost always regret what you didn't do, but will almost never regret what you did do. Take a chance. You only live once. SD is absolutely beautiful. If you get there and fall in love with it, then maybe you will want to buy a home, but if you keep your home in Oregon, there is a good chance you could move back there and your husband can probably find another 65k job if things don't work out. I hope this at least helps a little. God Bless.
Nuts?
It's like a topic(?) Why are most RE... in another forum
A lot is relative, emotional, etc.
But as a business decesion, I think that's a lot more fact/numbers based. If belief is too, there are A LOT! of nuts people here (buying RE).
Maybe it's a personal preference I have for the area.
I moved from North Carolina making 65K with a $150K 3 bedroom 2 bath , garage swimming pool and 1/2 acre cul-de-sac property in a good section to Silicon Valley making $110K. The same house out here would be $700K without the 1/2 acre. That was 2 years ago. The standard of living was MUCH higher in North Carolina on 65K than in Silicon Valley on 110K.
I had been hoping on career advancement, but I am finding that the only people who are advancing at my place of work are the ones who went to high school with the boss. The mentality in CA is different enough from NC that my family and I do not really fit in. Someone at work went so far as to question my mental sanity for moving my entire family out here from N.C. We don't really have any friends out here. We had a few good friends in NC. In NC, it is considered rude if someone says hello on the street and you don't answer back. Here they think you are strange if you say Hello and they definitely do not answer. They don't even look at you, they just keep on going. Population density is at least 2 or 3 times what it was in NC. Population composition in Silicon Valley has a majority of Orientals, Indians and Latinos with some Hebrew Russians. Caucasions are officially a minority.
Can you husband find something in Oregon that will advance his career? If hubby is dead set on moving, can you send him out to San Diego for a week to check out the area while there is still time to back out. In reference to homelessness in your original post, there are definitely homeless people here and sometimes I wonder if we will join their ranks too. There is more to your question than property values.
Thanks for the replies.
To clarify, my husband and I are orginally from San Diego, which is one of the reasons why he is so interested in "going back home".
He feels that this job offer is a great career move. However, I still have HUGE hesitations.
According to an online calculator that I found, with a $100K down payment and a $125K salary, we could afford a $500K home.
We just went down to check out San Diego. A 500K homes gets you a little crappy starter home in an OK neighborhood. Unless you move to Temecula which is a full hour away.
I wish that I was a fortune teller so I would know if the bubble is going to burst or not. If we could ride it out and rent for a few years or if these prices are just going to continue growing.
I just don't see how these prices can stay this inflated. I mean, as it is only 16% of families in SD can afford to buy a home. 125K a year is good money, and all it can buy us is a crappy house? makes no sense at all.
Hi:
I have a good friend who moved from Winchester, VA to SD in a similar situation. I told him that not only is the housing market in SD crazy, but so is the entire cost of living. His big increase in income was not only swallowed up by the tiny house he rented, but gas, milk, shoes, etc. In addition, I recommended that he get a cluse written into his employment agreement that stipulated that he would be entitled to $X if the startup company failed in the first two years (he neglected to do this) and when the company folded less then two years later, he spent every penny he had to move to his next job (MN) and lease a house where he and his family are literally starting over financially in life at 43 years old. When I called him in SD he would always say how beautiful the weather was, but then tell me what a bite it was to live pay check to pay check. Some hidden costs on the move to SD were car expenses (CA has their own emission controls that costs ~$400+/car, MUCH higher state income taxes and car insurance to name a few...use one of the comparison salary calculators and see what the differences are up front...then add another 10-15% more to those numbers for a real life scenario. Yes, SD has the best weather around, but at one heck of a cost. You will see that the difference in income is not nearly as great as you think...good luck with whatever you decide, but please do your research (like have your husband stop in a grocery store and grab a flier to compare everyday prices). Best Regards, craiggans
So what did you do?
Personally I love my little crappy house!