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Hi all. I've been looking at suburban L.A. housing, and I'm not finding a lot of scenarios that make me happy. I've been here 15 years so I know all the ropes of how to do things and like I said I'm just not finding something I can be comfortable with.
I actually work in the Inland Empire suburbs, but I just don't want to commit to a $2500 a month mortgage.
I used to commute to the Inland Empire from El Segundo, now I work in the Inland Empire so I don't have a commute anymore, and I make decent money, but it's still unaffordable for this area. An affordable area for me now is Beaumont or Banning, and I don't want to drive out there. That defeats the purpose of getting rid of my commute with my newer, still decent paying position.
Anyway, just kind of wondering what my options are if I cannot get a house in SoCal. My 401k going, but what else can I do if I don't have vaunted retirement equity?
Where are you looking?
The average house price in the IE is around $325k. Even with taxes, ins, and 5% down with PMI, you're right around 2k a month.
Put 20% down (65k) and you're @ $1400 a month.
Either you want a WAY bigger house than you can afford, looking in the wrong areas, or don't have a substantial down...I don't know.
No, im married, but also the majority breadwinner. Kids keep us from moving too far, or working more hours.
I agree prices may be frothy, but demand is high and lending is solid. The Fed will never be able to raise interest rates too high, too much debt in the system. Even if prices dip, they come back. Plus in the meantime, I'm paying rent anyway so whats the difference. Gotta pay to live somewhere.
I also guess "afford" is a subjective term. I can pay $2500/mo and be house poor.
I left SoCal because it was unaffordable. I miss it tremendously but we all need to do what's best for family. During the recession when we were underwater my wife and I (+2 toddlers) had to live in a 1000sq ft townhouse..so I am sure you can find a townhouse or condo as your starter home but it might be a downgrade from where you are today and yes you might end up on the bad side of a correction but it's a matter or riding it out. It sucks but it does eventually get back there...it took us 10 years to get back to the same house market value so it can be done.
Ok, but most in SoCal are not Silicon Valley tech moguls. If only a tiny percentage of people can afford them, something has to give....eventually.
It doesn't have to give but even if it does you might have missed enough to where a decline 5-10 years from is might not cover the appreciation in that time
I guess if I can't buy a house, for whatever reason, I could increase my 401k contribution by 10%, putting me at 16%. (Currently at 6%)
I also grew up in a flyover state. Another idea I had was to buy a house over there and rent it out. I don't think the rent was quite cover the spread, but it would take care of a good chunk of it. That way someone else (the tenants) would be paying the mortgage over the years.
No, im married, but also the majority breadwinner. Kids keep us from moving too far, or working more hours.
I agree prices may be frothy, but demand is high and lending is solid. The Fed will never be able to raise interest rates too high, too much debt in the system. Even if prices dip, they come back. Plus in the meantime, I'm paying rent anyway so whats the difference. Gotta pay to live somewhere.
I also guess "afford" is a subjective term. I can pay $2500/mo and be house poor.
Newsflash: Metro Los Angeles & kids and single family home just don't go together for most people. It's not fair, but it is what it is. The middle and even upper middle class are getting squeezed. It's been that way for a while now.
I guess if I can't buy a house, for whatever reason, I could increase my 401k contribution by 10%, putting me at 16%. (Currently at 6%)
In any event, 15% is the amount you need to be doing unless you get an awesome match or unless you've been saving since you were 22 (which isn't the case for most people).
[/quote]I also grew up in a flyover state. Another idea I had was to buy a house over there and rent it out. I don't think the rent was quite cover the spread, but it would take care of a good chunk of it. That way someone else (the tenants) would be paying the mortgage over the years.[/quote]
It's not that simple. Who will manage the property & screen tenants? There's more to costs than just the mortgage. It's much harder to manage when the property is far away.
Newsflash: Metro Los Angeles & kids and single family home just don't go together for most people. It's not fair, but it is what it is. The middle and even upper middle class are getting squeezed. It's been that way for a while now.
He lives in I.E., much more affordable. Be nice to know roughly where, it's a huge place. And where he works.
No, im married, but also the majority breadwinner. Kids keep us from moving too far, or working more hours.
I agree prices may be frothy, but demand is high and lending is solid. The Fed will never be able to raise interest rates too high, too much debt in the system. Even if prices dip, they come back. Plus in the meantime, I'm paying rent anyway so whats the difference. Gotta pay to live somewhere.
I also guess "afford" is a subjective term. I can pay $2500/mo and be house poor.
It depends on your other costs. It's not just the mortgage - it's also taxes, insurance, maintenance, repairs, and also non-housing expenses. Draw up a complete budget, it's the only way to know for sure. Is your income the only income in the household?
He lives in I.E., much more affordable. Be nice to know roughly where, it's a huge place. And where he works.
Yeah, I know. I sort of don't get how he can't afford a place in the I.E. with $100k. I know housing there has probably gone up a good amount since the crash, but it seems some black belt level belt tightening could get him there. But if not, then it's time to look for a job elsewhere.
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