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Unread 08-21-2010, 04:04 PM
 
19 posts, read 35,720 times
Reputation: 13
Default Affordable homes in Southern California?

I'm looking to move to San Diego or Orange County in the next year but am having second thoughts due to the housing prices. I am a pediatrician and will probably make around $100,000-120,000. I was talking to another doctor who just moved out to the LA area who told me that I will probably either never be able to afford a house, or I will have to get a tiny old house.

Is that really true? I know prices in California are high, but I can't imagine they are that prohibitive if you make a decent salary. If I supposedly will only be to afford a tiny house with my salary, how do most average-income earners afford houses? I've always wanted to live in California, but it may not be worth it if the only thing I can afford is a condo or run-down house.
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Unread 08-21-2010, 05:02 PM
 
12,615 posts, read 9,523,322 times
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Quote:
Originally Posted by scubacat View Post
I'm looking to move to San Diego or Orange County in the next year but am having second thoughts due to the housing prices. I am a pediatrician and will probably make around $100,000-120,000. I was talking to another doctor who just moved out to the LA area who told me that I will probably either never be able to afford a house, or I will have to get a tiny old house.

Is that really true? I know prices in California are high, but I can't imagine they are that prohibitive if you make a decent salary. If I supposedly will only be to afford a tiny house with my salary, how do most average-income earners afford houses? I've always wanted to live in California, but it may not be worth it if the only thing I can afford is a condo or run-down house.
Well, on that income it's difficult but far from impossible. It really depends a lot on YOU. I have a friend who is a psychiatrist who lives in San Francisco (which is even more expensive than SoCal). He lived in an ordinary 1BR apartment (rent was around $1100 or $1200 a month) for 2 years so he could pay down his student loans, and save money for a house, while still contributing to his 401k. He was making around 160K per year, but also had 6 figure student loan debt. He managed to pay them off. He still has his 10 year old Honda and doesn't plan on getting another car anytime soon.

He finally bought a swanky studio condo in San Francisco last December. I don't know how much it was, but I'm sure it was at least 450K. I know the monthly condo fees are like $650 for his building. This is a nice condo right in the heart of downtown SF. He had to give up living space to be there. By the way, he didn't buy the condo until age 40 (he went to med school later in life).

The point being, depending on whether you have student loans or not, you could easily live in a decent 1BR apartment, and save 25K to 50K or more per year, and have a very fat down payment for a decent (but definitely not luxurious) place in 3 years.

If you expect to live in a flashy and large house in a premium area, forget it. However, if you can be happy with a pleasant 3BR house in a decent area and are willing to save aggressively for it for a few years, you'll be fine. With your income, you DO have the ability to save aggressively, even if you have student loans.

One thing is certain, though....you will have to make some lifestyle trade offs in any desireable part of California that you would not have to make in many other metro areas. I think the real challenge comes for those who marry and have kids and want their kids to be in a top school district but doesn't want both parents working. That's where the really tough trade off comes in California. Top school disctricts typically require 2 six-figure incomes in order to avoid being house poor. My psychiatrist friend I used as an example is gay, so he doesn't care about kids and school districts and all that, so no real trade off for him....but since most people aren't gay, well then the equation changes.

By the way, have you ever read The Millionaire Next Door? The authors specifically talk about how, in their research, they found doctors (and lawyers) to be big overspenders with little money saved. So if you are talking to other doctors about the subject of money management, you might not be getting the best advice. Whatever you decide, I highly recommend the book.

http://www.amazon.com/Millionaire-Ne...2432023&sr=8-1

Last edited by mysticaltyger; 08-21-2010 at 05:20 PM..
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Unread 08-21-2010, 05:27 PM
 
11,730 posts, read 21,740,003 times
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Quote:
Originally Posted by scubacat View Post
I'm looking to move to San Diego or Orange County in the next year but am having second thoughts due to the housing prices. I am a pediatrician and will probably make around $100,000-120,000. I was talking to another doctor who just moved out to the LA area who told me that I will probably either never be able to afford a house, or I will have to get a tiny old house.

Is that really true? I know prices in California are high, but I can't imagine they are that prohibitive if you make a decent salary. If I supposedly will only be to afford a tiny house with my salary, how do most average-income earners afford houses? I've always wanted to live in California, but it may not be worth it if the only thing I can afford is a condo or run-down house.
Marry someone who makes nearly as much as you do, then you can afford a nice (not high-end) house in a safe part of Orange County. Of course while you're both making those 6 figure incomes, you'll have to spend $1000/mo+ on child care but that's a different thread.
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Unread 08-21-2010, 06:15 PM
 
Location: Here&There
1,958 posts, read 1,774,107 times
Reputation: 1938
Well if you really want to be in California, you can try your luck in the Central Valley.
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Unread 08-21-2010, 06:46 PM
 
Location: Lemon Grove, CA, 91945
4,216 posts, read 3,544,833 times
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You say you are a pediatrician. Your question puzzles me about getting a place in SoCal. Here is an example why: If a patient comes in to see you with a fever, would you skip the exam without getting the proper diagnosis, then just throw out the latest prescription to the family that some pharma rep gave you free samples of?

I think some questions need to be asked to give you a more accurate tip or recommendation.

What is it that you are looking for? Where are you coming from? What are your expectations? Real estate is local. There are expensive areas up and down the coast (most commonly sold as desirable) and not so nice areas that arent as expensive but still "nice".
Saying "I wanna move to Southern California" and this is how much I make, cant be any more vague.

I know many people that make in the 200k range but live within their means in San Diego. Basically they are buying houses now and at a better debt to income ratio than some of the folks we are reading about that worked at 7-11 and got subprime mortgage for 600k back in 2005.
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Unread 08-26-2010, 05:46 PM
 
Location: Aliso Viejo, Orange County, CA
2,087 posts, read 1,716,464 times
Reputation: 1257
Quote:
Originally Posted by scubacat View Post
I'm looking to move to San Diego or Orange County in the next year but am having second thoughts due to the housing prices. I am a pediatrician and will probably make around $100,000-120,000. I was talking to another doctor who just moved out to the LA area who told me that I will probably either never be able to afford a house, or I will have to get a tiny old house.

Is that really true? I know prices in California are high, but I can't imagine they are that prohibitive if you make a decent salary. If I supposedly will only be to afford a tiny house with my salary, how do most average-income earners afford houses? I've always wanted to live in California, but it may not be worth it if the only thing I can afford is a condo or run-down house.
You can get a decent house in a nice Orange County neighborhood within that salary range, provided you are either single, or just have one dependent; and you are not saddled with debt. It would be a different story if you had a family of three or four to support on your salary alone.
Your income is well above the median household income for Orange County.
Check the “advanced search” feature of homeseekers.com to find houses in your desired price range and locale.
Good luck!
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Unread 08-26-2010, 05:53 PM
 
20 posts, read 41,175 times
Reputation: 16
Default Not true.

If you make 100000. or 120,000. you can live very nice.... very nice. People in California like to make is sound like you have to be a millionaire.. Not true, come on and you can find a beach property for 300,000. walk to beach.. Fact.
No I am not a realtor.
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Unread 08-26-2010, 06:03 PM
 
11,730 posts, read 21,740,003 times
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Quote:
Originally Posted by jdusmc View Post
If you make 100000. or 120,000. you can live very nice.... very nice. People in California like to make is sound like you have to be a millionaire.. Not true, come on and you can find a beach property for 300,000. walk to beach.. Fact.
No I am not a realtor.
If you want a tiny condo with a big fat HOA.
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Unread 08-26-2010, 06:07 PM
 
Location: Duvall, WA
1,663 posts, read 3,755,963 times
Reputation: 570
Quote:
Originally Posted by jdusmc View Post
If you make 100000. or 120,000. you can live very nice.... very nice. People in California like to make is sound like you have to be a millionaire.. Not true, come on and you can find a beach property for 300,000. walk to beach.. Fact.
No I am not a realtor.
I'd like to know which beaches in Orange County or San Diego have properties for $300,000. I'm on Redfin.com everyday, and I've never seen one.

To the OP, my husband and I combined make about $150,000/year. We have 2 children. We are lucky, his job has given him stock, and as we accumulate it, we're saving up a down payment. Our budget is $400,000, and that will get us a town home in a nice, newer area (Aliso Viejo, Ladera Ranch, Rancho Santa Margarita), possibly a fixer single family home in an older area (Lake Forest or Mission Viejo). Take a look at redfin.com and you can search and see for yourself what is out there.

If you have a down payment, you're fine.

Keep in mind rent is high. We are renting a regular 3 bedroom apartment in Aliso Viejo and it's more than $2100/month. My brother rents a 2 bedroom in the same complex and pays $1600/month.

V. =)
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Unread 08-26-2010, 06:16 PM
 
11,730 posts, read 21,740,003 times
Reputation: 7029
Quote:
Originally Posted by VeronikaW View Post
I'd like to know which beaches in Orange County or San Diego have properties for $300,000. I'm on Redfin.com everyday, and I've never seen one.
I'm guess if you stretch your definition of "walk to the beach" and don't mind a 1 bedroom, 40 year old, trashed foreclosure, you could maybe find something in HB for that.
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