Millennials simply can't afford to live in OC (London: buying a home, to buy)

[man4857]

Originally Posted by pacific2

There are plenty of nice places to live all over the country, and OC is just one of them. Still, if I were a millennial making 80K, I would not move here unless I had reasonable expectations for that income to steadily increase.

The other reason would be for professional training, or to take advantage of a good opportunity at a company, knowing that I could later transfer to a lower COL place if my salary did not go up.

OC is also a good place to be a young entrepreneur.
Aliso Viejo is a hotbed of entrepreneurship among Southern California cities, study finds - The Orange County Register

There is an AV MeetUp for techies:

Tech Coast Angels
https://www.meetup.com/techcoastangels/

That having been said, some millennials are still moving here,at least for now. They are flocking into Aliso Viejo, and single millennials are the largest group of new arrivals to AV. Things are not totally gloomy.

However, most young people who move to OC will likely need to make a mental shift in terms of housing. A single family residence will probably be unattainable. Still, condos/townhouses are within reach.

Here’s a sample of under $400K places, all in very safe neighborhoods:
https://www.redfin.com/CA/Rancho-Santa-Margarita/45-Gaviota-92688/unit-149/home/5312948
https://www.redfin.com/CA/Aliso-Viej...6/home/5610903
https://www.redfin.com/CA/Mission-Vi...4/home/5665037
https://www.redfin.com/CA/Aliso-Viej...6/home/5611637
https://www.redfin.com/CA/Laguna-Nig...4/home/5578691

They seem in reach cause of the lower purchase price, yet there's this thing called HOA that adds to your mortgage every month, your 400K place, is like taking a mortgage for 500K, 600K after HOA is said and done.

[pacific2]

Originally Posted by man4857

They seem in reach cause of the lower purchase price, yet there's this thing called HOA that adds to your mortgage every month, your 400K place, is like taking a mortgage for 500K, 600K after HOA is said and done.

Obviously, the HOA must be taken into consideration, but a person would have to be unduly pessimistic to think that purchasing a 400K condo would cost as much as a 600K SFR.

The bottom line is that people who have to play it safe should not come out here. Those who are smart, skilled, risk-takers who know how to make money, have plenty of opportunities to rake in the cash.

[CaliRestoration]

Originally Posted by man4857

There will always be people who will want to live in SoCal, but for me and many others (many ex-Californians in Arizona), say yes, LA is a nice city to visit and vacation, but to live in it will require sacrifices far beyond average America and then it becomes a cost benefit analysis. The sunshine tax is extremely high compared to the rest of America, only a few other cities beats LA...

Exactly. It's a high price to pay, so move. You made the right choice. You admitted you don't have the patience, cash, or career trajectory to be able to buy a home in Coastal SoCal. Moving was the best move for YOU.

Be glad you realized that and actually acted upon it.

[CaliRestoration]

Originally Posted by Bill the Butcher

I'm guessing you missed this:



And this:


Your example assumes OP is looking for a $500,000 condo.

Also, even with the saved down payment, that's still 5 times the OP's annual salary, not 3x. Still house poor.

I never said it would be easy, but based on the current DTI most financial institutions use, I set out a plan for him to be able to live in SoCal.

SoCal, especially the places he's name dropping (Irvine, Newport Beach) is one of the top real estate markets in the U.S. These places have not been "cheap" for over 20 years (when that kid was probably in grade school).

The market is competitive, if you think having an engineering degree, and a good salary is enough to buy your way into a 4 bedroom house in 5 years, think again. In my home in Laguna Beach, my two adjacent neighbors both have businesses that create in the 8 digits of revenue annually, and both of those houses are under 2,500 sqft in area (they do have great white water views however).

The point being, if you want to live out here, you have to compete with the other players in the market and those players are wealthy and have a lot more than an engineering degree and $80,000 salary, plain and simple.

[man4857]

Originally Posted by pacific2

Obviously, the HOA must be taken into consideration, but a person would have to be unduly pessimistic to think that purchasing a 400K condo would cost as much as a 600K SFR.

The bottom line is that people who have to play it safe should not come out here. Those who are smart, skilled, risk-takers who know how to make money, have plenty of opportunities to rake in the cash.

I don't think it's pessimistic to assume HOA will stay the same year after year, it'll rise along with everything else but the mortgage will be the same, therefore, what may look like a 470K mortgage now, 30 years later might end up costing more. That's what I was trying to get at.

[pacific2]

Originally Posted by man4857

They seem in reach cause of the lower purchase price, yet there's this thing called HOA that adds to your mortgage every month, your 400K place, is like taking a mortgage for 500K, 600K after HOA is said and done.

Let's look at this condo:
https://www.redfin.com/CA/Aliso-Viej...6/home/5610903

According to Redfin, if you put 20% down, the total monthly charges, including mortgage, property taxes, HOA fees, and insurance, are estimated to be $2,174.

That doesn't sound too bad if you look at the cost of a 2 bedroom rental.

[CaliRestoration]

Originally Posted by Electrician4you

The problem I see with a some millennials, but people in general, they want it all right now. It took us years of toiling to get where we are today. It didn't happen overnight.


Can you LIVE in OC on 80k a year? Yeah you can. You just rent and you can't go Wild in debt.

See man4857, here's another dude telling you the exact same thing, just so you know I'm not dog piling on you.

Anyone who actually bought a nice home in Coastal Cali made lots of sacrifices, were patient in their approach, but eventually it happened.

[pacific2]

Originally Posted by man4857

I don't think it's pessimistic to assume HOA will stay the same year after year, it'll rise along with everything else but the mortgage will be the same, therefore, what may look like a 470K mortgage now, 30 years later might end up costing more. That's what I was trying to get at.

Yes, condo fees should be expected to rise, but rare is the individual who stays in one for 30 years.

You do what you can, when you can, make plenty of money, and decide what to do next.

[payutenyodagimas]

Originally Posted by Electrician4you

OC has been expensive since I moved here. Housing was ALWAYS expensive. Your pay still went only so far. Ok maybe in the 60/70s you could still buy a house on a normal blue collar job. But that started changing in the late 70s/early 80s.
I had a friend who moved out of OC in the early 70s I think 70/71. Sold for 24k. Two years later his house was resold for 75k. Now it's worth about 540k.

So can you buy a SFR today in a OC on a 80k salary. NO YOU CANT.

the OP can solved his problem by marrying a similar millennial with the same income

[man4857]

Originally Posted by CaliRestoration

See man4857, here's another dude telling you the exact same thing, just so you know I'm not dog piling on you.

Anyone who actually bought a nice home in Coastal Cali made lots of sacrifices, were patient in their approach, but eventually it happened.

You're missing the part saying, yes you can live in the OC on 80K but you'll continue renting (which implies from the beginning of the post) you won't get anywhere.

If you think I'm the type to want it all now, you're mistaken. I'm patient enough to work for what I want, without being unreasonable about it. What's reasonable to you is not reasonable to me. The OC or SoCal in general is just absurd to me. You can keep chugging along saving money like you said, but you won't go anywhere within 10 years as a millennial. You're looking at the micro viewpoint, saving every penny you can, when your single biggest expense is housing. You'd have a much easier time if you reduce it by 50% or more. Add to that home prices and rents are expected to rise faster than incomes over the next few years in SoCal and I don't think it has any signs of stopping.