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Earlyretirement has it spot on. I'll add two very important words - cash flow. Applies to renters and buyers alike.
My family is currently in Western New York state. My wife and I, plus 2 young kids (one's preschool age). We'd love to relocate to San Diego, as my wife grew up there and we have some family/friends in that area. But as previously mentioned - you need to do the due diligence and take a serious look at your finances - and not just a mortgage calculator or other online calculators. Get into the detail, spend the time, and make sure you understand monthly cash flow - that's where the rubber meets the road. We've been batting this around for over a year, and we're still not comfortable with the financial side of our equation yet. As a "finance guy", I've built a detailed spreadsheet complete with various sensitivity analyses, based upon:
-Detailed actual expenses (everything - downloaded from the bank/home finance software and categorized (40 or so categories, and excludes many discretionary items as vacations, etc...)
-Specific expenses adjusted/added/deleted based on San Diego versus WNY (eg. higher vehicle registration, increased gas consumption, lower heating bills, commuting costs, etc...)
-Daycare/school tuition
-Various scenarios for home prices, including all the extras (HOA fees, PMI, changing interest rates, property taxes, insurance, etc...
-Probable sale price of existing home, commissions, closing costs, etc... and net equity under different scenarios
-Sensitivity analysis of all of the above if our credit card (revolving) debt is paid off prior to moving, or continued to be paid monthly
-Based on all of the assumptions, I can calculate needed monthly take-home salary (after tax) for us to break even every month, and from there, back into gross salary with more assumptions regarding tax withholding, and various pre-tax withholdings such as health insurance, group life insurance, other benefit costs, etc... that are typically part of an employee's pre-tax payroll deductions. Compare my calculated needed gross salary to my predicted salary, and the deficit is what my wife will need to bring home, assuming she goes to work (she's currently a stay-at-home mom).
-And don't forget the one-time expenses associated with the actual move...
Lots to consider. In our case, we'd be considering liquidating a small portion of some retirement savings to make it all work. Worth the penalties and taxes? Perhaps for us. Not for all. In my case: $80k would be a very real salary potential for my background and I can tell you based on my calculations, assuming a $300k home in the Oceanside area, public school for the kids, no vacations, one car payment, and a slight increase in monthly spending, we don't cash flow on a monthly basis on an $80k salary.
False claim: You can't raise a family here unless you make at least $150K.
I'm not saying it has to be $150k but again, just look at the people with families that say $80,000 is not possible. I'd still ask the people that say it's possible to plug in the numbers to the categories I listed and tell me how much you'd allocate to each category.
tony, I think the point of the posts come in degrees of 'quality' of life. Not just 'making it' with everything hinging on maintaining gainful employment.
With that being said, with all other factors added in to ones financial life, some folks are going to always live paycheck to paycheck with only the tangible payments that in front of them every month. Others will have far more depth with their finances, hence the 'quality' of life that is completely subjective. With all cards on the table as earlyretirement posted and Sassberto mentioned, for the OP, with a family of 4 on 80k, those quality measures that were listed gets shorter and shorter in SD.
You have said you are a hockey fan, you know full well that just about any good team has depth on the bench, not just one star player that the owners paid big time cash for and all hope is on him. I think this is not too dissimilar to that when an owner wants to build a quality franchise. You are hinging everything on one player? No, I dont think so, when there are only so many Gretzky's, Messier's and Bondras that come around.
On the flip side, our Padres are a perfect example of making a team look as cheap as possible to sell. The results speak for themselves.
For many parents, renting is an unattractive lifestyle choice. Your housing stability is not guaranteed and you don't have the flexibility to arrange your housing in a way that suits your family's needs. It's especially risky when you are renting a single fam from an owner, what happens if they sell the house? You have to move, and what happens to your kids in school? Most parents don't like those sort of risks.
There is no way that you could have the lifestyle I described above on 80k income without significant equity and or savings. You can say that you know better, that the lifestyle isn't worth having, and that you will choose differently when it's your turn, but for now, the responsibilities of being a parent is simply something you don't need to think about.
It's fine if you want to eschew the middle class dream I described, but that's your lifestyle and your decision. Enough people want those things, that it's relevant information that those people would want to know before moving here.
I'd emplore you to re-read my post and note that one of the criteria was financial security. The lifestyle I describe is not some debt-riddled faux-affluence. It is the core of the middle class lifestyle that we inherited from our parents and grandparents. For many, the ability to attain that lifestyle is the ultimate goal of our society. Ask your minimum wage earning homeowner friends about how financially secure they are. My guess - they inherited their homes and they are living dollar to dollar. That is not the American Dream for most. I wouldn't work nearly as hard as I do if I wanted so little from life.
As far as estimating monthly expenses, what are reasonable federal and CA state income tax rates for typical income categories such as, <75k, 75-100k, 100-125k, 125k<, etc.? That's one budgetary area on which I don't have a great handle. Such info would be relevant to the discussion here.
We don't plan to move anytime soon, but I love exploring ways to better our lives and doing resarch to see what can be possible. I've loved San Diego for a number of years and it's my first choice for relocation, depending on if living there would fit our budget, career, lifestyle and family goals. I work full-time at a high-tech start-up in a management position, and my wife is a nurse presently working at 60% because we have young children. Once our children move from part-time daycare to full-time school, my wife will increase her working %. Depending on that % and where we would live, our annual household income would likely land in one of those brackets above. Having more knowledge of the tax rates would help us set up a budget to see if living in San Diego is truly a feasible move. Of course we'd both need to find employment in San Diego, and we'd budget to live on one income if we needed to.
We presently track all of our expenses with personal finance software, in even more categories than earlyretirement listed, and we have a solid handle on where our money goes each month (This is highly recommended if you don't already track your expenses!). With that knowledge, and since we presently live well below our means, my initial thought is that we'd likely be able to live a similar lifestyle in the San Diego area on our current income, with very few sacrifices. Once our two young children are finished with childcare, a major household expense decreases, and we'd also retain the option to increase our household income at the same time, therefore boosting our housing budget and saving even more. Different scenarios on this theme could all work, but some would be better than others for us. As such, we would not consider an actual move to a more expensive place like San Diego until we had one or no children left in childcare.
The one thing I don't really want to do wherever we live is to switch from a 15-year home loan to a 30-year home loan. Yes, a 30-year home loan could accommodate a higher-priced property into a monthly budget via lower monthly payments, but a 15-year loan would carry far less total interest paid to the bank. I also love watching the principal melt away each month on my 15-year loan. It would have to be a ridiculously lifestyle-enhancing property for me to consider a 30-year home loan again!
The best thing is that if we stay in WI, our lives would still be pretty good. Yeah the winters are long and nasty, but we still have good jobs and great friends. And, it's not every day that you get to be a founding member of a successful business. As my employer continues to grow, there may be opportunities to work in places other than WI in the future. Hopefully California, and San Diego in particular, is one of them.
I think you can do it but NOT in Carlsbad...that area is quite pricey, Oceanside can be a little ghetto on some parts but the other parts that are "okay" will have more affordable housing. To answer your question, yes you can make it work depending on what your current lifestyle is. My husband and I make $120000 per year combined and rent a 3 bedroom house in central san diego (1850) and manage just fine.
I've come to the conclusion that San Diego is a difficult place to transition to unless you have a fair amount of equity or a high paying job.
I was born and raised there and didn't leave the area until college so memories were one of ignorant bliss as a kid and as a teenager. Having grown up and been in the real world for a number of years, I've developed several theories about San Diego.
#1 Its a tempermental place to work. San Diego is a huge boom or bust town. When I graduated college in the mid 1990s, San Diego was in a bust cycle. Convair had closed; GD had closed; NTC had closed; the job market was very tight. Fast forward 4 years and San Diego was roaring with dot commers. Companies all over Sorrento Valley had popped up (places off Scranton Road and the like) and times were good. Dot com popped and things went south. Then the housing bubble arose and people were making killings of flipping houses, easy credit access, and wild county and state budget beliefs. Now look were San Diego is. Popped again.
#2 There is a significant penalty for being in San Diego - I call it the "paridise penalty". Employers KNOW you want to be there and the wage scale works accordingly. My bet is 10 to 20 percent higher lower pay than in LA. When I applied for a job out there (and was offered it) which was basically the same type of job as mine and with a company that was only slightly smaller than mine, I was pretty horrified by the fact that my $135,000 job in DC was marketed in San Diego at $105,000. A huge difference.
#3 Exacerbating the issues of #2 is the fact that San Diego really isn't a cheap city at all to live in. Sure, if you want to be a bum and live in a rundown rental off of Mission Boulevard, dodge bullets in Encanto, or cook meth with your neighbors in Crest, you can for a relatively low montly payment. But if you prioritize your living based on educational needs and want to focus on a good school district (eg., San Degiuto), I don't think you can find many SFHs for less than $500,00 which at 30% down still means $2,500 a month in mortgage (inclusive of taxes and impound). The lowest 4 bedroom place in Coronado is just under $900,000.
Coming from Fairfax County Public Schools where education is held in incredibly high esteem and standards are similarly high, I found that my expectations limited me to the two aforementioned districts. I ran the financial numbers umpteen different ways and without a second job assurance for the wife and with a lower wage scale for myself, I simply could not justify the move out there.
Yah, really. Trust me, I ran all the data and it was hard. Having grown up out there, there is a huge draw. Plus my wife is from this area so she's bored with DC and S.D. couldn't be a better match for her.
With an ID like GMUAlum I get the feeling that you've spent time here. So you know the priority Fairfax County places on education. California has priorities but it seems that budgetary constraints kills the ability for schools to really excel. Don't get me wrong, there are some good schools out there - La Jolla High, Torrey Pines, etc. But to get into those areas takes a LOT of money. And, I'm not particularly interested in expending $45,000 a year to place two children through Bishop's or La Jolla Country Day. That money is better spent on college.
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