What would you do in my situation? Condo or House?

[scgali]

Originally Posted by blam

God I hope you are right but hope is the mother of fools. Knowing my luck by the time I get the downpayment a shack in lake forest will go for 1 million.

That is the thinking that got me in trouble when I first bought in Irvine at 24. There was so much hype and everyone seemed to be buying so I was afraid to be priced out if I waited so I bought. That was in 2005. Still recovering from that one. Anyway, just wait until you have enough saved and are comfortable. You will find the right property at the right price but patience is key.

[thelopez2]

Buy a house and lock in a payment you are happy with, even if it less than 20% down. Buying a condo short term is a bad idea. Even if the home prices drop, you can't expect the monthly cost to drop significantly.

[ocGuy714]

Originally Posted by scgali

That is the thinking that got me in trouble when I first bought in Irvine at 24. There was so much hype and everyone seemed to be buying so I was afraid to be priced out if I waited so I bought. That was in 2005. Still recovering from that one. Anyway, just wait until you have enough saved and are comfortable. You will find the right property at the right price but patience is key.

Good advice from above.

I'm in the same shoe's as you (OP), and saving till I get 20% or market settles a bit. I'm in NO RUSH simply b/c it doesn't make too much sense financially right now to buy. Plus, prices have been inflated by foreign buyers, investors/flippers and NOT first time home buyers so be patient, it will correct itself. IF for some crazy reason it doesn't, i'll take all the money I save and buy a house outright somewhere other than in California.

[BRinSM]

Originally Posted by blam

Now knowing all that would you keep saving just a little bit more and put down 20% on a 200-250k 1 bedroom apartment and upgrade in the future? Or would you instead keep saving longer to get 20% down for a house right away? Or maybe you would try to put down less to buy the house sooner? Or something else? What is the smartest thing to do financially in my situation?

just keep in mind that if you buy the 1br condo that you'll probably need to live in that unit for years to come. you need to ask yourselves if the two of you will be comfortable living a 1br unit for that long. also keep in mind that if you start out with a 'starter' place, it may cost more than a comparable unit to rent with taxes, insurance, HOAs, etc... If you plan on moving on up, saving for a more permanent location may be more difficult. Additionally, if the housing market goes flat you won't build any equity, so you may not even have much cash for a more permanent home. you may get lucky though and turn out just fine. my wife and i bought our home in 2011 and it felt like we were the only ones looking at houses in our neighborhood. i expected my home's value to to stay flat for at least five years. fast forward two years and we were up over 10%. fast forward to the present and we're up nearly 25% based on recently sold comps. you seem like a smart person, so bottom line, do what you feel is best for you.

[dexter14]

Originally Posted by ocGuy714

Good advice from above.

I'm in the same shoe's as you (OP), and saving till I get 20% or market settles a bit. I'm in NO RUSH simply b/c it doesn't make too much sense financially right now to buy. Plus, prices have been inflated by foreign buyers, investors/flippers and NOT first time home buyers so be patient, it will correct itself. IF for some crazy reason it doesn't, i'll take all the money I save and buy a house outright somewhere other than in California.

This. The Chinese are already slowing down buying in this area, so are the hedge fund groups looking to flip houses. Once that totally dries up later this year, housing market will drop again big time.

[LuvSouthOC]

I think it's area specific regarding whether they are slowing down. Chinese investors seem to have very much discovered my 'hood and seem to still like it...right now. It's nothing to be excited about even though it inflates property prices. They rent the houses out. I dislike the idea of having investor owned homes here not far away from where I live.

[LuvSouthOC]

Originally Posted by ocGuy714

Good advice from above.

I'm in the same shoe's as you (OP), and saving till I get 20% or market settles a bit. I'm in NO RUSH simply b/c it doesn't make too much sense financially right now to buy. Plus, prices have been inflated by foreign buyers, investors/flippers and NOT first time home buyers so be patient, it will correct itself. IF for some crazy reason it doesn't, i'll take all the money I save and buy a house outright somewhere other than in California.

You are in an enviable position. While you wait for the right time and presumably save furiously, you should thoroughly familiarize yourself with the specific area(s) that you are interested in. That's a luxury most of us who were part of the market craziness didn't have when there were, at the time, 10-30 cash buyers for those very few homes on the market. You can and should take advantage of this time.