Considering buying home (Sacramento, Roseville, Elk Grove: foreclosures, rent, lofts)

[flipsyde98]

Now, before I start, I know that other people have asked questions regarding places in Sacramento to purchase a home, but I think that the answers can vary depending on when the question was asked or other specific info, such as budget.

I am in my late 20's, and recently started considering buying a home. I was planning on eventually buying a house anyway, but currently home prices are down, and if I don't buy one now, I don't know when the prices are going to be as low. Now I know that there are mixed opinions as to whether it's hit the bottom yet, how close it is to the bottom, or how long it will take to go back up, but at the same time, I also hear that interest rates are low and even if I wait for the bottom, the interest rates may be higher by then. Since I'd be a first time home buyer, I know my rates may be a little high anyway, but I have great credit with a steady income, which will hopefully help.

Ok, so as far as budget, my salary is only middle class, around the $65k range, so I think that would only get me about a $350k house. A few years ago, that wouldn't buy anything at all, but with all the lowered prices and foreclosures these days, it's a little different.

I work in Rancho Cordova, and do not plan to have kids for now, at least for another 5 years. I plan to keep the house for at least 7 to 10 years, if not longer. I don't like long commutes through traffic to work, so I've looked at houses in the Anatolia area of Rancho Cordova, Gold River area of Rancho Cordova, and Folsom. I considered Roseville at first for the same reasons that everyone knows already, but the prices were a bit high and I heard the commute sucks. I've mainly been debating between Anatolia and Folsom. So far this is what I've come up with:

Anatolia:
1) Not an established area like Folsom, so it's more risky that it'll turn bad like parts of Elk Grove. Concerned about the large number of foreclosures, and wondering if investors will just buy the homes and rent them out. Is the crime rate higher there now than before?
2) Can get a newer house twice as large as what's in Folsom for the same cost. The prices have dropped very much compared to 3 years ago, which is a concern as well as a chance to buy a larger house for not that much.
3) A bit far from stores and schools, but maybe that will change in the next few years? If so, then I don't mind waiting. As I said, even if I do have kids later on, hopefully better schools will be around, or I'll move by the time they start going to school.
4) Wondering if the toxic water is still a problem.
5) Wondering how bad the smell is from the rendering plant.

Ok, so my MAIN concern is the area turning bad. I know that no one can specifically say for sure as to what will happen, but I'd still like to hear the reasons why one thinks whether it will or not. The main thing I like are the large, newer houses. Anyway, on to Folsom:

Folsom:
1) Harder to afford a decent sized house.
2) I like the neighborhoods, and it's more established. Less risky and more stable.
3) Closer to many stores.
4) Wondering about the lack of diversity (I am Asian).

The house in Folsom that I'm considering right now is a bit small and close to other houses, but the neighborhood seems nice. It's near Natoma Station Dr. and Folsom Premium Outlets. Any opinion of that area?

However, I've read in one other post that houses under $450k in Folsom generally do not rise in value much. At the same time, if the Anatolia area turns bad, the value won't rise much there either. Again, I'm just thinking 7-10 years later, where hopefully they'll FINALLY have those shopping centers and grocery stores built, but that still won't help if Anatolia turns into a ghetto by that time. Also, I know that there's so much more land in Anatolia, and not that much left in Folsom, which would make Folsom worth more.

So... while I'm trying to find a decent sized house where I could be comfortable, I still have to consider the investment value over a 10 year period of time. Also, with the economy as it is, is it safe to be putting a 20% down payment?

I'm open to all opinions. If people feel strongly about any of the choices, I'd like those to be backed up with reasons as to why they think that way.

Thanks very much!

[CityGirl72]

So are you looking for JUST newer homes?

Plus I think you'll be really stretching yourself with a 350K home. We make $125K to $140K per year and we are looking at homes in the 350to 400K range and have equity built. But that's a personal decision.

And other areas of Sac are out? Like the more affordable areas like Carmichael etc?

Honestly in your spot I'd buy one of those new lofts in Midtown, but that's me. And being single I wouldn't need space of a house, but maybe you want the space.

[Kingsnkali]

I never heard of such nonsense that homes less than 450k in Folsom do not rise in value much. That's absurd. No place is rising now but in a up market, the more affordable homes rise higher (percentage wise) than the larger ones. Especially in a city like Folsom.

I think your price range might be too high for your income. Even if you put down 20% on a 350k property.

You will get what you pay for. Folsom is not cheap (though much better than it was a few years ago). There are reasons why the desirable areas are more expensive. Excellent schools, low crime, great neighbors, recreation and other amenities. The schools may not concern you now, but it will help your resale value when you go to sell down the road. I don't know why you would be concerned about being Asian in Folsom. Seems like we have people from all over the world here.

Good luck.

[california5]

Housing prices have gone down, I don't think Roseville is all that high priced right now. My brother just purchased a newly built home for just over $300k, that's including upgrades like granite and more. It's almost 2000 sq feet too.
He's really excited because it's a really good area and the houses had been going for much, much more previously.

[factor]

In terms of your concern on Folsom diversity, many Asian live there and more Asians are moving there. Of course, you cannot compare it to Bay Area, but still, think about the biggest employer in Folsom, more than half of its employees are Asian.

[flipsyde98]

Thanks everyone for your responses. About the $350k property, I'm not actually saying that the places I've been looking at are all around $350k. I'm just saying that's the maximum for what I've looked at so far. Some have been around $320k (Folsom), others around $300k (Anatolia), and 20% down on $320k would result in a $256k 30-year loan. And it doesn't mean that I wouldn't try to get a place for $300k. Is that still out of range for around a $65k salary? Also, my gf would be helping with it too, but I'd like to plan out everything with the assumption that no one else would be helping.

Anyway, back to the main topic of housing in which location. california5, would you mind telling me in which part of Roseville was he able to get that new home for just over $300k?

Citygirl72, it doesn't mean that other Sacramento areas are completely out of the question. The two that I mentioned were just the ones that seemed to be the most attractive for my budget and close enough. I don't exactly have a complete knowledge of every single Sacramento area, as I only moved here a few years ago. And yes, I think some space in a house is quite nice, but I wouldn't mind a 1650 sq ft place in Folsom either.

Also, my last concern about Folsom was just a VERY minor thought that came across my mind. It's really not THAT big of a deal for me =P Either way, I do appreciate people's responses.

If there's any other comparisons/opinions that people want to give, feel free to. Thanks again!

[CityGirl72]

maybe this will help

We bought our house for $310K (in 2003). We put 20% down. And paid all fees upfront. Our loan is for 245K. We have an extremely good 30 year FIXED rate loan at 5.65%

With taxes and escrow and mortgage etc - our monthly payment is $1875 (approx)

Can you afford almost $2K (or more it seems from the houses you are looking at) - for JUST your mortgage? And that's if you get a good deal. Imagine Calif has higher property taxes and the interest rates are going up.

[wburg]

CA has higher property taxes than where?? We're taxed at about 1%.

[CityGirl72]

Really I thought it was 2%?

[Guevera]

Citygirl -- in sac county, property taxes average about 1.1% assessed valuation + any special taxes at the neighborhood level (think the american river parkway thing they keep talking about). If I'm wrong, someone tell me, cuz i'm about to buy a house based on that assumption!

Flipsyde -- You've got about the same budget I do, and I'm not looking at anything CLOSE to 300k. I'm about to close on a house for 143,000. And I've thought long and hard about whether I'm ready to make the jump.

Then again, you're a lot younger than me and already make more money than I do... so go ahead and jump in. Then when you lose the house I won't feel like such a loser