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Old 06-03-2015, 11:11 AM
 
5 posts, read 10,695 times
Reputation: 10

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Hello everyone, my wife, 2 elementary school kids and I just found out that our lease is being terminated so we have 60 days to get out of our rental in Rancho Penasquitos. We love this area, the schools (PUSD) are very good but unfortunately $3200 plus (and going up) rent a month is not very feasible on a long-term basis. And to be quite frank we don't want to spend $800,000 on a new house so we were looking at Temecula area, as the more affordable family choice. Rentals are so high in this area for a single-family home than it obviously doesn't take long for buying a house to out perform renting, in the current market. We have owned several homes but unfortunately got caught in 2006 buying on the high side and had difficulty getting out of that house. So, I am very apprehensive about getting in the market this time around.

Does anyone share my concerns about the long-term effects of the drought and how it could possibly effect California real estate ? Temecula is wine country and a prolonged drought could seriously affect home prices. The other thing that is a concern for me is the financial markets and how overinflated they are alright now and when the market does is correction what is that going to do the housing prices. We are in kind of a Catch-22 because we've rented for four years now, we are very tired of dealing with landlords, physically moving, making new friends, new schools, overinflated rental prices etc. Stability would be nice at this point for the family. A $400-$450,000 mortgage is a comfortable number for us no matter what the market does but I would like to buy on the downside of the market this time around. But, life is all about timing and unfortunately you don't always get to choose when.

So, it's easy to see the upside of buying when we're renting at such a high price but what about the future markets and weather issues ? I feel like both sides of my brain are fighting it out and I'm not sure who's going to win.

What do you think ?

Thanks,

TJ
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Old 06-03-2015, 01:39 PM
 
3,439 posts, read 3,161,939 times
Reputation: 2508
California is too big too fail state. if they were able to bail out those banks, I don't see why will they allow Californians to just wither away with thirst?
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Old 06-03-2015, 02:45 PM
 
5,156 posts, read 4,336,227 times
Reputation: 8343
I know that renting, especially when you have children, is difficult, but California seems to be repeating itself in the real estate frenzy/crash of less than a decade ago, & now there is also the drought. I'm a SoCal native of over 50 years, but the changes that my spouse & I saw prompted us to leave the state altogether. I wish our grown kids could do so.

I suggest that you move to the Temecula area & rent at first before you make the life-changing decision of buying again. Really study & observe what is being done about the drought in the area. The drought is very severe, signs of it are showing in the PNW. Study the real estate trends in the area where you want to live. If people are engaging in bidding wars, stay out of the market. My best advice would be to leave the state completely, unless you are compelled to stay due to work & extended family. There are better places to raise children than SoCal...lower COL, better QOL.
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Old 06-03-2015, 08:17 PM
 
Location: Southridge
452 posts, read 604,492 times
Reputation: 430
Anyone with 12 days of college knows we are in another RE bubble. Not as big as before, but still 15% to 25% overpriced depending on area.
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Old 06-03-2015, 10:32 PM
 
162 posts, read 371,915 times
Reputation: 142
My suggestion is this: Buy a home you enjoy and expect it to slowly appreciate. Don't expect a quick buck & to sell it 100k over what you bought it at in 6 months. Those days are gone

Some say it's a bubble, just as many say it's not. That's the thing with real estate: it's unpredictable
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Old 06-04-2015, 04:46 AM
 
5,156 posts, read 4,336,227 times
Reputation: 8343
Quote:
Originally Posted by 909er View Post
Anyone with 12 days of college knows we are in another RE bubble. Not as big as before, but still 15% to 25% overpriced depending on area.
^^^How is that of any help to anyone??
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Old 06-04-2015, 02:13 PM
 
2,986 posts, read 4,493,760 times
Reputation: 1664
If you are going to buy, buy a house in a desirable neighborhood, located in a good school district, and preferably in a coastal neighborhood. that RE will always be valuable and will shelter you from any extreme volatility in the market.
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Old 06-04-2015, 09:27 PM
 
Location: IE, ca
264 posts, read 608,618 times
Reputation: 486
TJ,

Your feeling the same conflicting decision matrix hundreds of others are feeling as well. There is no 'right" answer, only an answer that is "right" for your family.

Rent vs Buy and weather vs drought etc and future predictions are all tough decisions to work through.

I can tell you the current real estate bottom was in early 2013 and then began another run up that is continuing today. It has slowed this year; however, the total sales volume of units is still high. In Riverside county, the FHA loan certification caps (355K) have slowed a rapid jump in prices at many levels. Many more people would like to buy up here; however in this area if they are planning on using FHA, 355K is their max allowable purchase limit. This equals a pretty small house and in a very competitive arena.

These lender price caps and the new Fannie and Freddie appraisal regulations have done a lot to hold prices down or at least in check in this area. This has not been the case in San Diego and Orange county and those areas are at or above previous peaks.

There is currently a rush on rentals as well as the interest rates have ticked up the last few weeks and have scared would-be buyers back into rentals. Many rentals are getting multiple applications and lines of people to view them are now common on "open house" days. Rents are expected to continue to climb an avergae of 3% each year unless something changes in the market again. I was able to place a client in a rental today after a new listing hit the market just yesterday. It had 5 applications on it already this morning.

In Riverside county we are also under new water regulations and they are tough. Effective June 1st, we are in a stage 4A water alert and the restrictions are going to be tough to deal with. The new water price tiers and the fines attached for "wasteful" users are going to shock a lot of people in the next few months. I dont see the water problems getting any better for years to come so this is major consideration.

Not sure if any of this info helps with your decision but feel free to PM me if I can provide any additional help. I have plenty of info and data for you that may help.

Sincerely

JOB
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