Buy or Rent in 2011 Orange county (Rancho Santa Margarita, Aliso Viejo: homeowners association, houses, neighborhoods)

[Charles]

Originally Posted by Don9

Why, because you pay more money in interest, principle, property taxes and insurance. A home that costs $700K today could cost $550K or less in a year or two and when it's all said and done you would have paid well over a million dollars for that house at 4.5% fixed for 30 years.

Renting for two years while waiting for the price drop would only cost $20K per year at $1650 per month plus you pay no tax, no insurance, no HOA.

It could, but renting and then moving every time something "could" happen is risky in itself.

My loan was 3.675%, 15 years.

I'll be 50 years old in July and I have four kids under 12.

I could handle a 10% drop. I could handle a 20% drop. However the $/sqft in my zip code is the same as it was two years ago and it's only varied maybe $20/sqft in those two years.

Meanwhile, I have stability, predictability, community/neighborhood bonding (I'm a stakeholder in my community), tax deductions, equity building, and money invested in the market.

I also know that where we live in South Orange County is in constant demand. There's another buyer every minute - demand stabilizes prices. The schools in South OC are for the most part very good - another stabilizing agent. Unemployment is 7% and below in just about all of south OC - more stability.

[Vascodagama]

Originally Posted by pacific2

In other words, your response was not relevant to my post. You very selectively picked and chose what you wanted from it just to support your argument.

I wouldn't say that. My post was relevant to your post and your post was relevant to this thread. I was trying to make an argument about your statement without being specific to Charles situation. Is there something wrong with that?

[Vascodagama]

Originally Posted by Charles

It could, but renting and then moving every time something "could" happen is risky in itself.

My loan was 3.675%, 15 years.

I'll be 50 years old in July and I have four kids under 12.

I could handle a 10% drop. I could handle a 20% drop. However the $/sqft in my zip code is the same as it was two years ago and it's only varied maybe $20/sqft in those two years.

Meanwhile, I have stability, predictability, community/neighborhood bonding (I'm a stakeholder in my community), tax deductions, equity building, and money invested in the market.

I also know that where we live in South Orange County is in constant demand. There's another buyer every minute - demand stabilizes prices. The schools in South OC are for the most part very good - another stabilizing agent. Unemployment is 7% and below in just about all of south OC - more stability.

The OP question was "Should I rent or buy" and that's really what I was pointing my comment to. There are many reasons why a person buys when they do and you have some good arguments to support your decision. There are many opinions on where the home prices and the economy are going which can influence a person’s decision on whether to purchase now or wait. Personal situations will also play a factor. My kids are grown so schools no longer matters for me. I also plan to buy one more house, my retirement home so that in itself is particular. My opinion in general is that home prices will drop more due to the many factors that exist. My strategy is to wait and rent until prices stabilize. I sold my last house when prices peaked and the plan is to buy when prices bottom.

[pacific2]

Originally Posted by Don9

I wouldn't say that. My post was relevant to your post and your post was relevant to this thread. I was trying to make an argument about your statement without being specific to Charles situation. Is there something wrong with that?

'Nuff said; this is going nowhere. Have a good evening.

[Ryuji]

Originally Posted by bhcompy

There is nothing that says that what happened Japan can't happen in the US(particularly overvalued areas that are already built out). Which is to say that it won't improve for more than a decade. I don't think we'll see another real estate bubble for quite some time

One of the biggest differences between Japan and the US, is population growth. Japan -, the US +

[bhcompy]

Originally Posted by Ryuji

One of the biggest differences between Japan and the US, is population growth. Japan -, the US +

Sure, but the growth is from immigrants without the money to purchase the overpriced home anyways

[Vascodagama]

Originally Posted by bhcompy

Sure, but the growth is from immigrants without the money to purchase the overpriced home anyways

Just like the non-immigrants ... no money to buy the overpriced homes

[user_id]

Originally Posted by proudmommy

People want to move here for the same reason we (all) like living here. It is arguable one of the most desirable places in the US to live. Everyone knows a lot of Orange County got absolutely hammered in the real estate bubble (Ladera Ranch is the poster child). My gut feeling is the main quake of prices falling is over and there may be a few aftershocks but things are returning to equilibrium though interest rates below 4% are not normal - so as they rise, prices fall.

Certainly some people want to move there, but younger folks don't particularly like stucco boxes and it is the younger folks that are going to support future prices.

I'm not sure what is do desirable about big stucco boxes in master planned communities, but this sort of thing seems to appeal to boomers. Of course, the boomers have peaked and the younger generations will redefine what is and is not desirable. In 30 years the stucco boxes in South Orange county could be low-income multi-unit housing, that is assuming they last that long.

5.3% is not the historic average for real estate gains. Long term real estate has poor performance, which makes sense, after all its only the land that appreciates the structure is a depreciating asset.

Anyhow, I would rent in Orange County, there is far too much downside risk to buy right now. Also, there is a black swan people seem to ignore, namely the "big one". A quake on the San Andreas is going destroy real estate values in Southern California.

[robbybee]

I bought my first home in Tustin in 1998. I was 46 years old at the time. I was always happy being a renter - single, never had kids - but I got into a position where I was paying so much in income taxes that I decided to buy. So, my future wife and I found this house which we both really liked. But I have been alone in this BIG house since she died in '06. It has 4 BR, 3 BA, pool, jacuzzi, fireplace, etc and it is just too effen big for me! So, I am gonna sell it (it's going on the market next month) and I am going to become a renter again - at least for the time being.

Having grown up in OC, I am loathe to leave. Although OC is nothing like what it was 45 or 50 years ago, it's still a great place to live.

PS, if you're looking to buy a way-cool house in a great little city, send me a PM!!

[proudmommy]

Originally Posted by user_id

younger folks don't particularly like stucco boxes and it is the younger folks that are going to support future prices.

I'm not sure what is do desirable about big stucco boxes in master planned communities, but this sort of thing seems to appeal to boomers.



Of course, the boomers have peaked and the younger generations will redefine what is and is not desirable. In 30 years the stucco boxes in South Orange county could be low-income multi-unit housing, that is assuming they last that long.

5.3% is not the historic average for real estate gains. Long term real estate has poor performance, which makes sense, after all its only the land that appreciates the structure is a depreciating asset.

Anyhow, I would rent in Orange County, there is far too much downside risk to buy right now. Also, there is a black swan people seem to ignore, namely the "big one". A quake on the San Andreas is going destroy real estate values in Southern California.

First of all, most of the people who are buying in the newer master planned communities are the younger set, the 25-35 year old families with young kids.

And the younger generation is going to redefine style? To what? Something different than what the younger generation has desired for the past 100 years? Some other than SFRs in nice, safe, neighborhoods with good schools? Something "cool and urban"?, Ya right. Nothing like raising kids next to some dude puking in an alley.

Next, "stucco boxes" are probably 95% of the SFRs built in past 60 years, they're nothing new - look at the entire San Fernando Valley - tract homes - and there's a lot less diversity of style on any street than there is on newer masterplanned communities. Builders went to great lengths to ensure as few as possible homes on the same street look the same.

I don't think anyone is implying 5.3% is the historical average.

An earthquake will only destroy the structures and by your own words, those are depreciating assets. A quake won't destroy the land or make the location any less desirable.