Frugal living for a family in California? (Sacramento: sales, coupons)

[ndfmnlf]

Originally Posted by jaynetarzana

Our story: We bought a modest house (720 sq ft) in Santa Cruz for a family of four. The market crashed, we lost everything, moved to Chicago for cheaper cost of living, we've missed California every minute , we're planning a move back in 34 days (yay!), we are determined to live within our means this time (including putting $ away each month so we can one day buy a home again). We need public schools so we have chosen Scotts Valley. Looking at rentals online, there isn't anything decent for under $2K and even those are in the section 8 areas. We don't mind living frugally (other than housing, we do already), but we don't want our pride to hurt either. We want to have a nice place to live that we aren't embarrassed of. I was wondering if anyone has had a similar experience with wanting to "go frugal" and if you wouldn't mind sharing your story. Thanks in advance!

I know I'm not really answering your query here, but I'm just curious: why do you say "you lost it all"? I assume you mean your equity in your house was wiped out. But that would only have been true if you were forced to sell. If you stayed put in Santa Cruz, you really wouldn't have lost anything at all except on paper.

[jaynetarzana]

We bought at the peak of the market in 2005 and put 20% down and another $80K into making it livable for a family of four. It was the nest egg we had built for 10 years. We knew the mortgage was going to be a stretch, so we figured we would do a HELOC against our large down payment at least. But then the market crashed and suddenly lenders weren't granting new HELOC's and pulling them from other people who weren't using them. So we knew that we weren't going to be able to afford our mortgage without the HELOC long enough to ride out this recession so we had to sell. We sold for less than we bought so we lost our entire down payment, the $80K we put into it in addition to all of the real estate fees. We walked away with nothing. But if we had waited another few months, we would have been a short sale. We went into that house with $220K and walked away with nothing. We had to sell our furniture and 2nd car to finance our move. Wouldn't you consider that losing it all?

[MtnSurfer]

Wow,

Sorry to hear that. But thanks for your honesty. Obviously you were trying to do the right thing in a bad situation by not going into foreclosure. But this is a word to the wise before entering into the market. The old RE sales pitch that it is 'Always a good time to Buy' does not necessarily hold true.

My wife and I were just talking about the CA RE market ourselves last night. We are going to error on the side of caution before we invest again after selling our home in CO ~ 6 months ago and barely breaking even. Right now renting is fine for our family.

[Dean Trails]

Originally Posted by MtnSurfer

Wow,

Sorry to hear that. But thanks for your honesty. Obviously you were trying to do the right thing in a bad situation by not going into foreclosure. But this is a word to the wise before entering into the market. The old RE sales pitch that it is 'Always a good time to Buy' does not necessarily hold true.

My wife and I were just talking about the CA RE market ourselves last night. We are going to error on the side of caution before we invest again after selling our home in CO ~ 6 months ago and barely breaking even. Right now renting is fine for our family.

Renting does seem the way to go right now. THe National Association of Home Builders say the downturn in new housing will probably last well into the 3rd quarter of 2009. Then a slight, but only slight upturn in 2010. I don't suspect the party will really get started untill 2013 when Obama is in his second term!

Although, if a great property comes up with everything you want or need and you can get it at a great price then I would jump on it like a coyote on a greasy pork chop! It has only been in the last 30 years or so that people treat their home as an investment. Most folks bought a house to live in and to enjoy living out from under a landlord. The good old american dream to be your own boss and captain of your own ship...............

[MtnSurfer]

Originally Posted by Dean Trails

Renting does seem the way to go right now. THe National Association of Home Builders say the downturn in new housing will probably last well into the 3rd quarter of 2009. Then a slight, but only slight upturn in 2010. I don't suspect the party will really get started untill 2013 when Obama is in his second term!

Although, if a great property comes up with everything you want or need and you can get it at a great price then I would jump on it like a coyote on a greasy pork chop! It has only been in the last 30 years or so that people treat their home as an investment. Most folks bought a house to live in and to enjoy living out from under a landlord. The good old american dream to be your own boss and captain of your own ship...............

Yes, I agree with you about homes as more of an investment in CA. However I think in most other parts of the US buying a home to 'live in' is still the norm. When we lived in CO we purchased a nice, newer (2001) 2 story home with a three car garage, full basement, AC, double pane windows, 4 BD/3BA and a view of the Rockies from all floors for 235K. Plus the owner payed closing. And my salary was basically the same. It actually increased while there.



On the other hand in certain high demand markets like the Bay area and much of CA where you pay 600K+ for an average, smaller, older home in need of repair it is a very serious endeavour, commitment and investment. It is a paradigm shift out here. Of course most ppl would like to be home owners, but at what price? Yes one can move to a less desireable area with poorer schools, drive further to work (1 hr+), spend 70%+ of net income on a mortgage + insurance + tax, etc... But then at some point it becomes a quality of life issue vs. 'just living' in a home.

Now I am not saying buying in CA is bad. It is just different than most of the country or what it was here 20+ years ago. There are homes here in Pacific Grove for example that were designed and built for middle class folks. And 30+ years ago it was more affordable. But it is quite different now.

This really all speaks to *Value* in CA. The homes are still over priced IMO. But how much they will drop is anyone's guess. I do watch the economic forecasts. Some have predicated another 30% drop before bottoming out. This will vary from area to area of course. And the in the most desirable areas will probably drop the least - simple supply & demand. But the good news is things are still falling.

[jaynetarzana]

I hear the 30% figure thrown out there by a lot of different sources so I tend to believe it. Renting is what we have to do for now. Hopefully when the market hits bottom we will be able to afford to buy something again.

Looks like you had some nice views from your backyard MtnSurfer.

[MtnSurfer]

Originally Posted by jaynetarzana

I hear the 30% figure thrown out there by a lot of different sources so I tend to believe it. Renting is what we have to do for now. Hopefully when the market hits bottom we will be able to afford to buy something again.

Looks like you had some nice views from your backyard MtnSurfer.

Yeah we saw some amazing sunsets/sunrises over the Rockies from our window. Here Christmas eve sunrise 2007:



And here is sledding in our backyard:



Derek

[jaynetarzana]

Those are some beautiful views Derek. There is a reason why so many people move from CA to CO and vice versa. They are two very beautiful states.

[EscapeCalifornia]

MtnSurfer, what part of Colorado did you live in?

[MtnSurfer]

We lived in Colorado Spring near Powers and Woodman. We were in the Wagon Trails sub division which has a nice outdoor pool/rec center for residents. I loved swimming there before work. Of course it closes for the Winter. We had a great view of Pikes Peak.

I worked for Verizon right next to the Garden of the Gods:







Derek