So. California renters!! What will you do? [Archive]

larslobster

11-10-2005, 10:23 AM

Wait it out - I think things are finally starting to change. We just sold a house in Pasadena and it took longer to sell and sold for less than our realtor and everyone in his office thought it would. The people that bought our house are trying to sell their house and it's been on the market over a month. This is a house that last summer *probably* would have sold in a day or two due to the relatively low price point.

I think things are starting to slow down in SoCal due to rising interest rates and so many people being stretched to the limit on what they're borrowing. I don't think they can stretch much further.

granada

11-10-2005, 01:52 PM

Agreed. We are waiting it out and saving in the meantime. Rent is pretty high around here, too, and it makes me sick to think of how much rent we're paying that could be going into a mortgage. But, at the same time, DH and I don't feel comfortable borrowing so much for a house either. So, right now, we're in a (renting) holding pattern, but hoping things will change a little in the next couple of years.

ee_chick

11-11-2005, 08:08 AM

The market is definitely slowing. We bought in August, and already there's a difference. Our realtor told us that houses started sitting a bit longer on the market over the summer when sellers chose their selling prices just to see how much they could get, and nothing was too high. Now they're sitting on the market an average of six weeks in my area, and people are no longer getting their asking prices. They're getting 95%+, but that's a big difference.

Everything I've read seems to indicate that prices are expected to stagnate, but that there is not a big drop anticipated. As a homeowner, I hope that's the case, but I know y'all are pulling the opposite way. ;)

mar5195

11-11-2005, 10:44 AM

We'll probably end up buying in an ok neighborhood just to get in the markey. We are looking at Spring 06, we have really cheap rent so we're just trying to tough it out and save as much as we possibly can.

Amuse Bouche

11-11-2005, 10:48 AM

We've been saving for about 3 years, and we're hoping to buy next summer or fall. I think things are slowing down, and we're looking into some more "marginal" neighborhoods on the East Side.

armadillo

11-11-2005, 10:56 AM

We just bought early this year. What we did was rent for a while and keep saving up money. When we had enough for 10% down, we went house hunting. The mortgage is about two times what we paid in rent, but we get big tax breaks, so it's not really that much more money that we spend on housing each month.

Rosebud

11-11-2005, 11:01 AM

We are waiting it out.

To buy a median priced home of around $550,000 (and it's hard to even get a small condo for that price anywhere near the Westside), we'd have to be making a combined salary of around $135,000. I read that in the LA Times recently. We're nowhere close to that and don't expect to be anytime in the next several years.

Our feeling is that with about 80% of people in L.A. County priced out of the housing market, according to current studies, things will have to change at some point. I don't believe the economy can sustain itself at such extraordinarily high levels.

wendalah

11-11-2005, 11:14 AM

Our feeling is that with about 80% of people in L.A. County priced out of the housing market, according to current studies, things will have to change at some point. I don't believe the economy can sustain itself at such extraordinarily high levels.

Our feelings exactly. The market eventually will have to correct itself. I'm not sure how much things will drop, but in the meantime, renting seems to be a better option for us.

If you don't want to live in an apartment, try renting a house. The rents are definitely higher for homes, but it will give you a good feel of what it's like to pay a mortgage!

Shapsgrl

11-11-2005, 11:18 AM

I'm in OC too and feel your pain. We're currently consolidating our expenses to save more, but really it's not looking good. I have friends that just bought a 1 br condo in South OC for $440K! Although the market is slowing it hasn't stopped.
Ideally, we would like to buy within 1-2 years and I'm expecting we will buy in Central OC rather than coastal OC where I currently live. As for how we will afford it, we're saving like crazy, and my parents intend to help out significantly.

but yeah, it sucks right now. I hate renting and you'd think that with our combined incomes we could afford something!

cactus

11-11-2005, 01:51 PM

My husband's in a PhD program and I'm a teacher, so obviously we're far below the income level that the LA Times says you need to be able to afford a median priced home. At this point, we're going to rent until we can get out of LA to wherever he gets an academic job in a few years and hope that we get to go somewhere where two people who are gainfully employed yet not outrageously rich can buy a decent house!

I think it's so depressing...out of my entire group of late-20 something early 30-something friends, only one couple (BIL and girlfriend who are a doctor and a lawyer) actually own a home. Sheesh! Interesting to hear what other people who are in our same boat are doing...

PaisleySloan

11-12-2005, 01:34 PM

It's good to know that others are experiencing the same frustration living here in So. Cal.

We've been renting for a while, but our 1 bedroom is way too small for us. Unfortunately, I lost both of my parents recently and they left behind a 3 bedroom +office, home in Palmdale (ugh). We've decided to move up there temporarily to go through the house. It's insane how much people accumulate over the years. The crazy thing is their mortgage is the same price as our rent! We're in a rent controlled building in Hancock Park for a little under $1k, utilities included. We could afford much more, but we can't justify doubling our monthly payment to rent. (BTW, I don't think they've rented this place yet if anyone is interested - they're putting hardwood floors in after we leave. I've been begging them to do it for a year, the bastards!)

The quandary is: do we try to re-fi and purchase the home just to finally be part of the club, or do we sell, cash out and roll it over into a new, but probably smaller home? It's a tough decision because there is no way in hell we'll get as much house for our money where we want to live. On the other hand, I really don't like it up there and would rather not be commuting down to LA every day. DH is lucky, he works at home. Thankfully, he's really flexible and supportive, and is open to the idea of selling the house.

Rosebud

11-14-2005, 04:47 PM

According to yesterday's LA Times, only 13% of households in L.A. County can afford a median priced home. :mad:

There was an interesting article on the front page of the Real Estate section about what the median price of around $500,000 will buy you in L.A. The answer:

1. A 774 square foot 2 bdr. cottage in Eagle Rock

2. A 1,280 square foot 2 bdr/1 ba house in North Hollywood

3. A 1,200 square foot 2 bdr cottage in Silverlake, east of the 5 freeway

4. A 1,069 square foot 1 bdr condo in Rancho Park (near Century City)

Soooo depresssing!

larslobster

11-14-2005, 05:05 PM

I talked to a friend today who lives in Silverlake and he said that there are at least 15 'For Sale' signs in his neighborhood right now. And in our old neighborhood, there are quite a few people selling right now and moving out of state.

If the increased inventory trend lasts, prices should at least stabilize.

Amuse Bouche

11-14-2005, 05:35 PM

I was out walking the dog, and I noticed a for sale sign on my block. I live on a block in a nice neighborhood, close to VERY nice neighborhoods, but it's all apartment buildings, except for this one condo building. I picked up a brochure for the condo for sale, curious to see how much it was for, and it was $1.3 million! For a condo! A nice condo, to be sure, but still only 1000 square feet, with a small balcony and no yard. And $450 a month HOA!

Rosebud

11-14-2005, 05:43 PM

The house across the street from me (in the Carthay Circle area) just sold for $1.35 million. It's a cute place-- 3 bdr/2ba, original Spanish details, decent yard. But it has a big drainage problem and the floors slope. It was just on the market a couple years ago for that very reason. $1.35 million?? I just can't understand how and why someone would pay that much!

Amuse Bouche

11-14-2005, 06:27 PM

Yeah, the houses in my neighborhood are the same price, but at least you get a whole house out of it, you know? With some land, and maybe a tree or two, and you can plant some vegetables, and you can build a whole other room in the backyard if you want to. But a condo? For the same price? Why would you buy a condo if you can get the house for the same price? (Both of which are outrageously overpriced.)

ks_piper

11-15-2005, 12:17 PM

You can do what we did and move. Yep, that simple. We left SoCal this time last year. Took a 50% pay cut (eek!) and moved to Wichita, KS. We've spent the past year renting a house and will close on our own house next Wednesday (if all goes smoothly - it better!).

Here's what is really scary -

- took 50% pay cut to move.

- paying less than 1/2 of what our rent was on our 2 bed/2 bath apartment in Rancho Cucamonga for a 3 bed/1 bath house on a huge lot.

- making 50% less (crazy small income - I'm not kidding you) and we're buying a 1,400 sq ft 3 bed/2 bath ranch house on a good sized lot in a nice quiet neighborhood.

- even scarier our house is only $69,900. :eek:

We could never afford to live on this income in SoCal - heck we couldn't afford to live in SoCal on our income when we moved!! We certainly couldn't have afforded to buy a house or hovel any time soon.

Granted, picking-up and moving doesn't work for everyone but it has certainly done wonders for us.

I wish you all the best in SoCal and hope you can find a way into the housing market!

PLNUBRIDE

11-16-2005, 08:12 AM

I know that is ALOT easier said than done b/c there are alot of factors that go into making such a decision, but it is worth considering.

My DH and I did the same exact thing just 3 months ago...we moved from south Orange County, CA and moved to Vegas, NV. Luckily my DH got a job transfer (which solidified just yesterday) so his pay stayed the same. But, I am going to have to take about a 20-30% pay hit. But, even with that in the mix we are doing way better financially out here that we were doing in OC with me making more. Plus, we had the money to buy our own place. In OC, we co-owned the condo we lived in with my parents (long story) but even with our share of the equity (which was quite hefty) we could not afford anything in Orange County. I loved watching the housing market and over the course of the last couple of years I was getting more and more aware of the fact that I would never be able to own a home on my own if I stayed in OC. Better yet, if we ever had children there was NO WAY we could afford to live in OC on just one salary (b/c I wanted to be a SAHM).

Now, the upside to our decision to move was we had family in the Vegas area and both my parents and my brother (and his soon to be wife) want to move to Vegas as well....so we did not have to move away from family in order to own a home.

Just for reference we bought the condo in Sept 2002 for 262K and sold it in August 2005 for 470K!!! It is an 1,100 sq ft condo 2 bed/2 bath, 1 car garage and no backyard. I mean, how insane can prices get?!?!? 262K was tight, but doable....but 470K, that is downright overpriced!

la_bride_2004

11-17-2005, 09:25 PM

I am curious if a large percentage of newer homeowners got in over their heads in terms of financing, and if there will be more inventory if people can't afford higher rates. I suspect though, that there is a large population of renters who are wisely biding their time and saving their cash and will become owners in this scenario.

Rancid13

11-22-2005, 07:21 PM

This is going to be long, sorry! Read at your own risk. :)

We were fortunate to be able to buy in January of this year. We were living in a 1-bedroom guesthouse in El Segundo and I really wanted to move back to OC. Ideally, we would have been somewhere in the HB-FV-CM area. I scoured the MLS active listings almost daily (helps that I work in a real estate-related office) and suddenly a 2-bedroom 2-bath condo in Los Alamitos shows up in our price range at $399K (originally listed at over $450K but reduced after sitting untouched w/no offers for 2 months). New hardwood flooring throughout, all new appliances (washer/dryer, oven/range, dishwasher), new carpet and tile, upper end unit, cathedral ceilings, fireplace, new paint...a ton of amenities.

In early December last year we jumped on it and made an offer, and since we were the only ones interested in it during that rainy week and the sellers were already 2 months into their current home and wanted to unload the condo quickly, our offer was accepted almost immediately (subject to home inspection, appraisal, etc). It's not our ideal location, but it's by no means a bad location. Wish we could be closer to hubby's work in Costa Mesa and mine in Huntington Beach, but we make do. Safe area, great neighborhood, fantastic school district, close to lots of entertainment, restaurants and grocery stores and freeways.

We got in with 100% financing on an 80/20 loan ARM, fixed for 2 years. We got the prepayment penalty lowered to 2 years from 3 years and will refinance to a fixed 30-year at that 2-year mark and/or consider selling it and moving up into a real detached house closer to our ideal area.

Yeah, the payments are almost twice what we were paying for rent ($1375/month for a 1-bedroom guesthouse!) but we're looking at a nice tax return early in 2006 after 12 solid months of payments, so it's been relatively easy for us to make the purchase and basically 'do this homeowning thing'.

ellybelle

11-23-2005, 11:27 AM

I'm not from So. Cal., but you know that those of us in No. Cal feel your pain!My DH and I just bought our first house (a cute 2/2 in a decent area of Sillicon Valley). And yes we paid a little over a million for it :eek: (but we can add on 2 more bedrooms pretty easily, and it's in an up and coming neighborhood. so we figure we can stay here for many years to come and do alright with it).

But we're in our 40s, and DH runs a 9 employee business (and works 80 hour weeks:rolleyes: ) -- three years ago we would have been hard pressed to afford more than a condo.

I was born here and my parents invested in RE, so I've seen the cycles.
This is probably the height of the market and prices will probably level out for a few years or go down if the economy runs into problems. Rising interest rates will mean that your total cost won't go down much though.

Good times to look are in the fall-winter (lowest prices) and late summer (best selection). Check out places that have been on the market for awhile that seem overpriced -- people stop looking at places that have been overpriced because they figure there "must be something wrong" with them, when in fact the only problem may be the price.

Good luck

Rosebud

08-27-2007, 05:44 PM

Bumping up this old thread. SoCal renters-- it's two years since this thread was started and real estate prices just keep going up (at least in L.A. and O.C.- has San Diego seen any drop?). Despite a "housing crisis" (which doesn't seem to be having much impact on our local housing market), only 3% of L.A. County residents can afford a median priced home.

Do you still have hope that prices will go down to a level that first time buyers will be able to enter the market? We have been willing to rent for a long time and wait things out-- but not for the rest of our lives. Do we eventually have to move out of California if we can't afford a $700k starter home?

Out of town friends/relatives keep emailing me articles about the housing bust with notes like, "Hey... maybe now you can buy!" Um, not so much.

Katy

08-27-2007, 05:53 PM

We're actually seeing a drop in prices out our way. Mind you, they're still out of our reach, but they're dropping. We also have tons of homes available in our area right now. Just driving down streets you'll find 5 open house signs on nearly every block come Sundays.

Have you checked out the foreclosure sites lately? Things are going crazy out here (not just in the Inland Empire). Now we just need the banks to lower their asking prices on the foreclosed homes and take what's owed instead of market value.

ETA: we looked at two open houses this weekend and were told at both that not only have the prices already dropped once, but that the current price wasn't firm.

wendalah

08-27-2007, 06:04 PM

Not much difference that I can see. I am in shock that enough people can afford to buy here.

Rosebud

08-27-2007, 06:07 PM

Yeah, there are for sale signs everywhere, but the prices are still ridiculous. I have noticed some $10k or $15k reductions on condos, but no larger changes that would make ownership more realistic for us.

I guess we can just hope that with more foreclosures and stalling sales that eventually prices will come down a bit. Things have just gotten so out of control over the past couple of years.

PinkMartini

08-27-2007, 06:49 PM

My dad just bought a 3 bd house that was being foreclosed on out in Riverside for $350k. He's been looking to buy for about 3 years now. He works out in Long Beach so he has a MAJOR daily commute.

larslobster

08-27-2007, 09:23 PM

I'm still watching the market (because DH misses L.A. terribly) and can't believe that prices are still rising. I thought that people were stretched as thin as they could go on credit two years ago and the market couldn't possibly go any higher then. A lot of the ARM loans that were taken out back then are set to adjust over the next few years and I'm not sure how easy it will be to refinance given current events. I wonder if a lot of people will be forced to sell when that happens causing an extreme glut of homes that will bring prices down.

Unfortunately, though, I'm not sure it will affect areas like West Hollywood/Santa Monica/Silverlake. We rented in a condo building in WeHo before we moved to Pasadena and every single person that bought a unit in that building was a trust fund kid. I think the L.A. market is unusual in that there are a lot of people with money. :(

Sare79

08-27-2007, 10:48 PM

Not that I am in California, but we are seeing something comperable here in Vancouver. Unfortunately, 500k would get us a 1 bedroom condo downtown. Where we live in the suburbs, it would get us a 2 bedroom older townhouse. We've been wanting to get into the market for a few years, but it seems so far off. We movedin with DH's family to get ahead and save money, and every time we meet our goal of paying off a certain amount of debt and enough money saved, we realize that the market is moving way faster than we can afford. Some days I wonder if we'll be living here forever.

bubbles

08-28-2007, 04:30 PM

We're going to wait it out. Prices are falling a bit in the area that we are interested in.

Lots of bank owned properties, and this is in LA county not the I/E.

Myra

08-28-2007, 09:22 PM

It's definitely going down in San Diego, but it's slow. The condo market is crashing, but for SFH, the bigger drops are mostly on paper. There are decent deals on short sales or bank owned houses, but most people aren't willing to drop their prices enough (esp if they ridiculously overpaid in, oh, 2003-05), so the houses are staying on the market a long time. We're renting b/c we don't know if we want to stay here very long and b/c the market is still dropping.

Rosebud

08-29-2007, 04:18 PM

I'm glad to hear we're not the only ones still waiting and renting.

I really do despair of ever owning a home with these prices and I really don't want to leave CA and my family. I guess we'll just have to wait and see what happens. $500k for a 2 bedroom fixer condo is ridiculous and I'm not paying it.

villanelle75

08-29-2007, 04:24 PM

I read an article yesterday (which I now can't find) that said that rents are going up in nearly all major urban areas. It mentioned LA, San Diego specifically, and I think it mentioned OC as well. It said that rents in San Diego were up 5% in the past year.

I can only assume this is because fewer and fewer people can afford to buy, so the demand for rentals is going up.

yby1

08-29-2007, 04:50 PM

Not a renter but I feel your pain!

We own a condo and want buy a SFH on the Westside and it's feels like it's impossible. Just the process sounds scary. Ideally, we would find a place we like and try to lowball an offer - maybe $50,000 to $100,000K under asking, have someone accept it, then try to sell our place as fast as possible and hope we don't get too many real lowball offers ourselves. Makes me not want to try.

But we want a yard dammit.

wendalah

08-29-2007, 05:00 PM

$500k for a 2 bedroom fixer condo is ridiculous and I'm not paying it.

I know. It's absolutely ridiculous.
I keep having friends tell me, "You know--you are throwing money away on rent, and for what you pay in rent you could easily pay a mortgage." It drives me crazy. I'd rather "throw away" money on a rental that at least gives me a decent standard of living, a yard, and flexibility to leave it when I want to, than anchor myself to an overpriced piece of shit just so I can say I own.

mar5195

08-29-2007, 05:05 PM

We don't make a ton of money. But the 2 years before we bought our townhouse we pretty much lived like broke college students. We didn't travel, bagged our lunches, not a ton of eating out, entertained at home, no clothes unless they were on clearance, etc.

We managed to save 20% in 2 years and go to Maui! It was hard but it was worth it. We did get lucky in that I was our realtor so the commission went straight into the house & since I was a realtor I found a property that wasn't being advertised other than on the RE MLS.

Rosebud

08-29-2007, 05:15 PM

I keep having friends tell me, "You know--you are throwing money away on rent, and for what you pay in rent you could easily pay a mortgage."

See, our rent is pretty low for our neighborhood. Taking on a mortgage for a very, very entry level house would double what we're paying each month, and we'd have to move to a much less desirable neighborhood. Our jobs are not stable. We just can't put ourselves in that position. There's no such thing as a starter home around here anymore!

Katy

08-29-2007, 10:39 PM

I keep having friends tell me, "You know--you are throwing money away on rent, and for what you pay in rent you could easily pay a mortgage." Yeah, that's what folks always seem to say. But really, when you've got rent that's half the price (or more) for what you'd pay in a mortgage, there's not all that much motivation to buy for us either. Although we could do without the late night banging on the wall from the old, evil lady nextdoor :rolleyes:

trestlegirl

08-29-2007, 11:08 PM

I keep having friends tell me, "You know--you are throwing money away on rent, and for what you pay in rent you could easily pay a mortgage."

Ha! yeah, sure, I could buy a nasty condo conversion way the heck out east, spend 2 hours on the freeway every day getting to and from work....or I can stay here at the beach in my tiny apartment in a great neighborhood close to work. I'll stay here thanks!

wendalah

08-30-2007, 06:25 AM

Bloomwood

08-31-2007, 01:05 PM

Exactly...we are paying a hefty rent, but we have a pretty spacious 3-bedroom (about 1800 sq feet) in a trendy neighborhood in the hills, with a great view, and a small backyard for our dogs. It's fine for right now and it beats buying a 500K condo in Reseda owned by Flossie The Lifelong Smoker for 30 years.

Wendalah, per this posting http://www.constantchatter.com/forum/showthread.php?t=22109&page=8 I thought you'd bought a house. It sounded gorgeous. I guess the deal fell through?

wendalah

08-31-2007, 01:46 PM

Well, the truth is: I couldn't find a good dogwalker in Laguna. That's one task I really have to outsource!

ejs

08-31-2007, 01:59 PM

Wendalah: So you lied about buying a house? Why? That's so odd.

wendalah

08-31-2007, 02:02 PM

Yes, I agree.

lawyerlee

08-31-2007, 02:07 PM

So you lied about buying a house? Why? That's so odd.
Sometimes people seem to lie about the weirdest stuff on CC. :confused:

Katy

08-31-2007, 02:16 PM

admin hat here --> but what does any of this have to do with the current prices of homes in southern california? Let's please just stay on topic. For those wishing to lament the god awful housing prices in general (since I notice some non-SoCal folks here) I believe there's a thread for that.

stevesbabygirl

08-31-2007, 03:00 PM

Shameless plug here, but we just put our house on the market today for anyone looking for a home in So Cal! We're in Lakewood, and it's a 3bd/1ba, 1048 great starter home on a 5000 square foot lot. I know it's tiny, and unfortunately, that's how the homes are around where I live.

Bloomwood

08-31-2007, 05:21 PM

Well, the truth is: I couldn't find a good dogwalker in Laguna. That's one task I really have to outsource!

ahh, so you are/were mocking me. Niiice.

So you lied about buying a house? Why? That's so odd.

Sometimes people seem to lie about the weirdest stuff on CC. :confused:

You people are crazy. If you think I am - or someone else is - lying about something why don't you just call it out in the thread rather than mocking or send a pm. I just don't understand what motivates you??

admin hat here --> but what does any of this have to do with the current prices of homes in southern california? Let's please just stay on topic. For those wishing to lament the god awful housing prices in general (since I notice some non-SoCal folks here) I believe there's a thread for that.

Sorry, Katy. I won't post in this thread OT anymore.

And, I apologize for derailing this thread; I was honestly curious about wendalah's home purchase.