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Freaking out

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Myopic Rhino

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Part of me is very much freaking out right now, and since it's midnight here, there's no one else to talk to about it (other than my wife, who is also freaking out), so I thought I might as well post it here.

First, a little background. Next month will mark two years since I moved to San Diego. I was alone here for 4 months while the kids finished the school year, and then my family joined me and we moved to the Rancho Penasquitos area (which is in the northeastern portion of San Diego County). Moving from Utah, we faced a serious problem - finding affordable housing. We owned a 5 bedroom home in Salt Lake that we sold for around $150K, but a similar home in this area would have been 3-4 times that here, so even though I got a nice bump in my pay, we still had no choice but to rent here.

So fast forward to today. We're paying about $2100/mo in rent and we're in a decent home, but we feel like we're throwing away money. Not just because of the rent, but because of the fact that homes have gone up in value so much over the past couple of years that if we *could* have bought, we'd have several hundred grand in equity now.

Over the holidays, we spent some time looking for houses around here, but in order to fit our family, we're looking at $700-800K. I should mention that we're somewhat constrained in that we have 5 kids, so we require a decent sized-house. Also, all of our children are exceptionally bright, so we need to live in an area with good schools. Between my job, books, and GameDev.net, I earn a healthy income, but we just can't swing a $700K+ house.

Unfortunately, it's unlikely that things will get better. San Diego County is pretty much done building new single family houses, but the population is continuing to rise, so housing costs are going to continue to rise faster than my income. Since we can't buy now, we'll *never* be able to buy here, which from a long-term financial perspective is stupid.

This week, various factors led us to look very hard at our options, and we kept looking north. A bit up the I-15 from where we are now is the city of Temecula. Temecula is a very new city, having been incorporated in 1989, and it's pretty upscale, having been very carefully planned. Houses there are also considerably cheaper than San Diego, though they are going up in price. We looked up quite a few houses and quickly realized that all things being equal, a house in Temecula costs about half what it would here. Plus, the schools there are very good and in general it's a very family-oriented community.

On Thursday, we drove up there to just drive through some neighborhoods and drive by some houses that were on sale, and we liked it, so today, we went back with a realtor to walk through 7 houses.

That leads me to what I'm freaking out over. About six hours ago, we offered just under a half-million dollars for a house. It's a great house - built in 2002, 3100 sq ft, 5 bedrooms with big closets, several bonus rooms, great kitchen, community pool, etc. The thing that panics me is that a week ago we weren't even thinking about buying a house here, much less in a location that's going to cause me to spend at least an additional hour in the car every day.

But, logically, it seems like the right thing to do. A lot of people from San Diego are moving north for the exact reasons we are, and that trend will continue, so we'll build equity fast. And this house is a great fit for us. When we bought our house in Salt Lake, we looked at 40 houses before settling on the one we bought, and I was never completely happy with it. We both loved this one immediately - and if we don't get it, there were 2 others that we liked almost as much.

Anyway, that's it. Now we just wait and see if they accept the offer.
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Holy SHIT?!!!! $800k for a house?!!!!


Eegads man...



But I definitely agree; rent is just throwing away your money. Buy a house, SOON. Even if the additional hour is there, it'll still be worth it in the long run; who knows, maybe you'll be able to get enough money someday to afford a house closer to your job later on in life.

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Well big congrats to you and the clan! Now's a good time to bid, interest-rate-wise, and if it's newly incorporated and growing, there's little doubt that you'll be able to sell it at a nice profit.

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Wow, good luck on everything.

I understand how it could freak you out; I was in a slightly similar situation moving down here to Arizona. Up until a month or so before I moved, I wasn't planning on going anywhere at all. It was a little bit of a gamble just up and leaving so sudden like that, but it all worked out. Of course, I don't have a family, so the risk factor was considerably lower. But if I were paying that much a month for rent, I would scram too. [grin] Luckily, things aren't quite that bad here in Phoenix yet.

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Hey Dave, Good-Luck. I am in a similar situation but on the other coast (and I don't have 5 children). CT has zero 'affordable' living, especially if you are looking at 5 bedrooms and over 2500 sqft. Anything like that under 500K will have been built prior to 1970, have no central air, will probably need a lot of tlc and\or be out in no-man's land. I am struggling to find a home in an area with good schools that won't make my commute time go past the 1hr mark. I work in White Plains, NY. One piece of advice I do offer though (and this is from experience) is make sure you are both happy with the decision. Trust me, it makes things a lot harder when after a long day and an even longer commute, you come home to an unhappy wife.

-Len

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What's the mileage on that Mini Cooper of yours anyways? [smile] If you had to drive a big ass hulking SUV to work everyday then that might be a problem, cause an extra hour (2 actually, counting the return trip) per day in an SUV can indeed add up, heh. Even still, you're definetly making the proper long-term plans. Sometimes you just have to bite the bullet for the short term. Good luck

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I am trying to get on the property ladder. The housing market in the UK is way over inflated making it impossible for first time buyers to make a decent purchse. I am looking at some shit house low-demand accomodation in an area similar to the one I am trying to escape from.

I envy your predicament.

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Time to set up a PO Box for gamedev.net close to your job. That way you can check the mail on the way to work and deduct that mileage :)

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$500K for a house like that in California sounds like a great deal. If you lived up the San Francisco bay a house like that could easily go for twice as much.

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Yeah, I know, that's why we couldn't really pass it up. The same house in the area I'm at now would be over $1 million.

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Wow, housing is expensive in southern california. If you can switch to a new job, I'd invite you to come farther up north to Seattle. The average cost of a house in seattle is about $350k but if you go a couple miles north (10 miles) the median housing cost drops to $250k. And these are very nice houses which can easily accomadate (sp?) a 7 person family in a nice peaceful neighborhood with top-notch schools. This area is developing like crazy up here, so if you're considering that as an option it would be a wise idea to buy withing a few years before the cost of housing becomes like california. My parents bought a house about 18 years ago for $115k and now its worth $350k+ which gives you an idea on the growth and appreciation in property.

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Although we may eventually move from California, Seattle isn't an option. My wife has rheumatoid arthritis, so we need to be someplace that is warm and relatively dry. Seattle isn't exactly known for either. [grin]

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