Possible Relocation to LA

[JTGJR]

Originally Posted by EscapeCalifornia

So what happens when they sink $200k into a property right now so they can spend more each month on mortgage than renting the same house, then see their investment crater? This isn't 2001. Housing values are down and no one knows where the bottom is.

Plus, being from out of state, it will no doubt take them a while to figure out exactly where they want to live long term. I say rent a nice house for a year, get your boots on the ground, watch the market, and then decide where and when to buy.

Many of you on this thread keep saying "investment." Yes, many have had investment at the top of the list during the past 5 years. This poster sounds like he's looking for a home for his family. My first home dropped 33% in value the first 2-years I owned it in the mid 80's. I sold it for 50% more than I paid for it 2-years later. I didn't buy it for an investment. I bought it because I wanted a nice home, in a nice neighborhood for my family.

In the OP's case, yes, he's looking at $36,000-48,000 per year to rent, in a good area for his family, plus the cost of putting his children in school. That's 2-years before his cash cushion is gone. But wait! He had that additional $200K that he can put into the stock market or a mutual fund. They're pretty secure. Right?

So, after 2-years, the house either drops another 30% in value to where he's still treading water, but in a home in a good area, or he's pumped upwards of $100K in cash into nothing that he owns and now can't afford a good area and good schools, unless of course the stock market went up.

Personally, I'd take my chances on real estate if I planned on staying in place for awhile.

[EscapeCalifornia]

Originally Posted by JTGJR

Many of you on this thread keep saying "investment." Yes, many have had investment at the top of the list during the past 5 years. This poster sounds like he's looking for a home for his family. My first home dropped 33% in value the first 2-years I owned it in the mid 80's. I sold it for 50% more than I paid for it 2-years later. I didn't buy it for an investment. I bought it because I wanted a nice home, in a nice neighborhood for my family.

In the OP's case, yes, he's looking at $36,000-48,000 per year to rent, in a good area for his family, plus the cost of putting his children in school. That's 2-years before his cash cushion is gone. But wait! He had that additional $200K that he can put into the stock market or a mutual fund. They're pretty secure. Right?

So, after 2-years, the house either drops another 30% in value to where he's still treading water, but in a home in a good area, or he's pumped upwards of $100K in cash into nothing that he owns and now can't afford a good area and good schools, unless of course the stock market went up.

Personally, I'd take my chances on real estate if I planned on staying in place for awhile.

You really have to look at a house as in investment as well as a place to live. If you buy a car and it loses $10k, you don't like it but its not the end of the world if you can't stand the thing a year later and ditch it. Most people can't absorb a 30% loss in the value of their house. Life is unpredictable. Lots of people wind up needing to move before they expect to. I just don't see the current market as a good time to jump in. The way things are going, he could lose 30% over the next year, then spend the next decade crawling back to "break even" which really isn't break even when you factor in the difference between the mortgage and what he could have rented it for, taxes, maintenance, selling costs, etc. Of course, if he KNOWS for a fact that he'll be there for 10+ years, by all means buy and ride out the current cycle. But how many people can predict exactly where they'll be that far out? Three years ago I never imagined I'd be making plans to leave the state. Life is funny like that.

[CA4Now]

Originally Posted by HookTheBrotherUp

One main concern is schools. We don't live in Houston exactly, but in the suburbs and my daughter starts in one of the best rated schools in Texas. I would be very concerned about the schools in the LA area, my wife thinks we would have to go private no matter where we live in CA, but I am hoping there are some great schools to be found.

Not clear on why you'd want to live in O.C. if you'll be working in Westwood? At any rate, if I were moving to So Ca from out of state right now, I would rent. Home prices will continue to fall, certainly through 2009, if not later. And if you buy without knowing your neighborhood, you may regret it. Rent in the Santa Monica or West L.A. areas and see how you like the public schools there. With the class size reduction in public elementary schools in grades K-4, you probably can't go wrong. I would pull my kids out of public schools after that. The budget cuts in CA are just too severe.

[CESpeed]

With your combined income you and your wife should be able to comfortably live in Westwood or Brentwood which would put your commute at the max 2 miles. These areas are very affluent and therefore have more decent schools. There are also very good private schools in the area. Now is a good time to buy because there are several homes in the area in foreclosure or close to it. A house will run about 750K. If you are looking long term, you will also be in the districts that act as the feeder schools to UCLA. If you don't want to live in LA proper, Beverly Hills is literally next door and West Hollywood next to that. Good Luck.

[soccermom88]

There is a website called greatschools.net which gives info on every school district in every state. It has been very helpful to me, we are considering moving out of state in the next couple of years or so. Sorry, but I personally don't have any info on schools in that area. Good luck to you and your family!