Buying a Home in SoCal

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Buying a Home in SoCal

Post by cowbman »

Update: Quit job, left spouse, went home with family, received updated jobs including:

1) Boss from job realized he needed me and offered to decrease load 30%, and give me an extra $20k base + uncapped incentives (previously capped at 20% base).

2) Almost dream job doing exactly what I want in Seattle at about 20k more than current pay with guaranteed 3% COLA every year. 4 day workweek. Downside no productivity, but can buy into company ownership in 4 years.

3) Private Equity based backed group interested in my talent, sounds nebulous, no $$$ figures yet.

4) Small companies in TX at $300-$350k.

5) Offer in Bay Area as contractor at 3x my current rate (1099)

6) Rural MO with HUGE potential, could easily make $300k working 3 days/week, 44-48 weeks/year.

I appreciate any advise out there. I feel like I know the answer intellectually, but there's more than that involved in a home purchase with a spouse/family. Spouse flew out to apologize. Not sure what I should do.

[^^^ Above is an update of his situation starting from this post (Page 3). The original content is below. --admin LadyGeek]

I'm in my mid to late 30s and looking to start a family ASAP. We've been living in a 1 bedroom in SoCal for the last almost 3 years now (ever since moving here from TX). My spouse is very happy here though very much wanting a home. Prices have become completely insane here. I do not think my current job pays enough to support housing prices here (San Diego). My spouse's income improved considerably after moving from Texas, but mine actually decreased slightly. In addition, I work about 3-4x more. I don't think it's sustainable to work this much. Not being able to afford a home and trying to please my spouse is creating considerable stress on me. My employer regularly has turnover without much thought of it (because of overworked employees at low salaries vs competitors). I've been promised a job I desire, but they keep assigning me more "pressing" tasks. This has led to me working for a year (hard) in a job I don't like for the promise of something to come. That being said, it appears as if there is very little upside on my salary. My spouse is very upset with the living situation but seems unwilling to compromise anywhere. I feel considerable pressure as the main earner to provide for my family, but feel I cannot do it here (because salary is lower than elsewhere for me or the same with much higher COL). Spouse does not wish to leave and is very happy with their job. We have very stable jobs with almost no risk of being laid off in a recession (both in healthcare). There are no other available jobs in the area for me, so changing jobs is not an option for me without relocating.

Current situation:
No children, planning on 1-2 ASAP
Cash reserves: $175K
Rental Property value: $700K;, Mortgage $515K at 4.25% (can't refinance; I tried several times, originally purchased with 0 down). Producing income of about $500/month
Retirement Accounts: Roth IRA: Spouse 1 $250K, Spouse 2: $65K, 401K: Spouse 1: $415K, Spouse 2: $40K
Taxable brokerage: $115K
No other debt
Spouse 1 income: $240-$265k/year
Spouse 2 income: $95-100k/year

(I'm missing a few things; PC says NW is $1.34M)

Spouse would like $1.7M Home. While I think it may be possible with current interest rates, I'm not very comfortable given the large run up in prices and the strain it would present on finances. Spouse is unhappy with anything < $1.5M and this one is quite nice (ie. better than most in the range < $1.8/1.9).

Family is able and willing to assist with downpayment. That being said. I still don't think this is a good idea. Spouse is afraid we will never be able to purchase a home as prices have increased at a frantic rate.

Thoughts?
Last edited by cowbman on Tue Apr 27, 2021 12:17 pm, edited 1 time in total.
59Gibson
Posts: 1386
Joined: Mon Dec 07, 2020 7:41 am

Re: Buying a Home in SoCal

Post by 59Gibson »

You're getting ready to start a family, do not like your job hrs/pay decrease, have a $700k rental property(btw providing a terrible return considering the risks), need to rely on family for DP. $1.7 mil is out of your league at this point. Buy 1.25 or less or rent the 1.7mil house
neverpanic
Posts: 1023
Joined: Sun May 10, 2020 12:26 am

Re: Buying a Home in SoCal

Post by neverpanic »

I'm just tossing out a few random thoughts here:

You currently owe $500K. Are you going to qualify for another ~$1.3M?

Are you going to lose income when you start your family, whether having children or adopting?

San Diego is special, but $1.7M feels like a lot on a $350K income. While you have significant reserves in addition to the $500/mo from your rental, the big mortgage is going to be a stretch on your finances and that is assuming your new family members will not have special circumstances.

SoCal living is great, but not so much if you've got the stress of a job that isn't working well for you over an extended period of time. That stress is only going to be enhanced if you're in the position of having to make that $7500/month payment on a single income from a job you're frustrated with.

In my opinion, you should adjust your budget down to the $1.2-1.3M range.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
bstewie
Posts: 215
Joined: Wed Oct 04, 2017 8:16 pm

Re: Buying a Home in SoCal

Post by bstewie »

sell the rental, add the proceeds to your down payment. reduce your price target. there are *plenty* of beautiful homes in sd county for 1M.
Tingting1013
Posts: 1594
Joined: Mon Aug 24, 2020 5:44 pm

Re: Buying a Home in SoCal

Post by Tingting1013 »

A few random thoughts:

1. San Diego is a big job market. Are you sure you can’t find a better job that is more sustainable at your current salary? I find that hard to believe for someone in healthcare.

2. $1.7M is a lot of house for San Diego. That’s basically La Jolla prices.

3. If there is no room for compromise anywhere, get an interest only mortgage. It brings your annual outlay on the house down to $50k/year (mortgage interest + property tax - tax benefits).
dboeger1
Posts: 1411
Joined: Fri Jan 13, 2017 6:32 pm

Re: Buying a Home in SoCal

Post by dboeger1 »

I also have a hard time believing you can't find another job, especially since you had one in TX paying more for substantially less work. There's something wrong there. I think at times, we can feel trapped by a bad work situation that keeps us so busy that we don't dedicate enough time and effort to finding ways out, but an unbiased outsider can clearly see that the job is the problem. Does everyone you work with work 3x-4x as hard as you did in Texas for less pay? That just doesn't seem sustainable. I know proposing one spouse put their career on hold has fallen out of favor, but at some point, I don't see how moving to a more expensive area so that your spouse can make a little more is worth you working yourself to death for less money. Could you potentially increase your income even more going back to TX and working the same long hours as you do now? Could your spouse potentially use the recent job experience in CA to get a higher-paying position in TX?

The thing about your post is that it reads like a wishlist of everything. I want a mega yacht, a beach house, and enough money to never work again, but I can't have all those things until I reach that level of success or take on a huge amount of risk. Your spouse wants to continue furthering their career in sunny SoCal, 1-2 kids, a $1.7m house, and for you to work unnecessarily long, stressful hours to afford it despite having a better career option elsewhere. Your finances are such that you may be able to pull it off, but you'd be going from extreme financial discipline to trying to buy your dream home and have a bundle of kids all at once, and it sounds less like a partnership and more like your spouse calling the shots to get what they want. I would maybe ease into these new lifestyle choices by prioritizing the kids, house, or careers, but not necessarily all at the same time. Your spouse should understand that just because they want a certain level of house in isolation doesn't mean that your lives together will improve holistically by buying it. Everything's a tradeoff. It might make more sense to buy a cheaper home and have one spouse stay home and raise the kids, or it might be worth it for both of you to continue careers but hire an in-home nanny or grandparent to help with the kids. There are just a lot of things pulling in all different directions and you should understand as a family where you're willing to compromise.
ohboy!
Posts: 911
Joined: Thu Jan 04, 2018 1:21 pm

Re: Buying a Home in SoCal

Post by ohboy! »

Sucks that this is now pretty much the price-point of anything remotely decent west of the 5. If this is east of the 5 it sounds like too much house. I would sell rental property if you have to have the $1.7M house. But Im just a schmo living in a house worth half of what you are considering.
BillWalters
Posts: 339
Joined: Sun Aug 11, 2019 5:21 pm

Re: Buying a Home in SoCal

Post by BillWalters »

Sounds like less of a personal finance issue (you know you can’t afford a $1,700,000 house) and more of a relationship issue. Your spouse appears, with the presented info, to be a. driving you to work way too hard and b. adding stress on top of the work stress demanding a house you can’t afford.
ohboy!
Posts: 911
Joined: Thu Jan 04, 2018 1:21 pm

Re: Buying a Home in SoCal

Post by ohboy! »

Here is a 1.7M house. But the airplane noise would drive me nuts.

https://www.redfin.com/CA/San-Diego/155 ... ntent=link
User avatar
Cyclesafe
Posts: 1474
Joined: Wed Dec 31, 2014 12:03 pm

Re: Buying a Home in SoCal

Post by Cyclesafe »

You are right AND your wife is right.

How can that be?

You can't afford $1.7M and anything lower priced these days in an upscale San Diego neighborhood is not worth being bankrupt (or perpetually house-poor) for. As for La Jolla, $1.7M buys a small fixer-upper at best, and that would be EAST of 5. Forget La Jolla and all the beach cities west of 5.

Sounds crazy. But there it is.

Inventory is crazy low and there's been an influx of chain migration from Hong Kong (and likely soon Taiwan) bidding prices up 9% just this year on those few houses that have been for sale. Also a buyer is competing with many investors who buy and then rent homes to take advantage of the very hot market.

When DW and I started out in the '70's any fixer-upper single family detached home in a safe neighborhood (we weren't even considering schools) was 15X our combined salaries. We settled on a 600 square foot one bedroom (old converted apartment) condominium in West LA that cost "only 3X". (At a mortgage rate of 13% I might add.) We were utterly miserable.

If you both want to stay in San Diego, you must both scale way back your expectations, both figure out how to gather a higher down payment, and both figure out how to make more money. Timing right now is terrible and it will take a few years for supply (very much East of 5, I'm afraid) to catch up to demand.
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)
ohboy!
Posts: 911
Joined: Thu Jan 04, 2018 1:21 pm

Re: Buying a Home in SoCal

Post by ohboy! »

Cyclesafe wrote: Tue Apr 13, 2021 7:02 am You are right AND your wife is right.

How can that be?

You can't afford $1.7M and anything lower priced these days in an upscale San Diego neighborhood is not worth being bankrupt (or perpetually house-poor) for. As for La Jolla, $1.7M buys a small fixer-upper at best, and that would be EAST of 5. Forget La Jolla and all the beach cities west of 5.

Sounds crazy. But there it is.

Inventory is crazy low and there's been an influx of chain migration from Hong Kong (and likely soon Taiwan) bidding prices up 9% just this year on those few houses that have been for sale. Also a buyer is competing with many investors who buy and then rent homes to take advantage of the very hot market.

When DW and I started out in the '70's any fixer-upper single family detached home in a safe neighborhood (we weren't even considering schools) was 15X our combined salaries. We settled on a 600 square foot one bedroom (old converted apartment) condominium in West LA that cost "only 3X". (At a mortgage rate of 13% I might add.) We were utterly miserable.

If you both want to stay in San Diego, you must both scale way back your expectations, both figure out how to gather a higher down payment, and both figure out how to make more money. Timing right now is terrible and it will take a few years for supply (very much East of 5, I'm afraid) to catch up to demand.
Chain migration? Am I reading breitbart? The issue with real estate in SD is number 1, nobody is selling. And number 2, it's the best city to live in the country.

We are still considerably cheaper than a lot of the Bay Area and west of the 5 in SoCal is pretty hard to beat. Work from home, SD bio-tech and tech startups, all likely to attract more high-income buyers.

https://www.redfin.com/CA/La-Jolla/5775 ... me/4945431
$1.5M in La Jolla + $400 HOA

There are houses for $1.7M in La Jolla, but usually only one or two listed and they are not mansions in Bird Rock or on top of Mt Soledad with views.
av111
Posts: 717
Joined: Mon Jan 26, 2015 12:27 pm

Re: Buying a Home in SoCal

Post by av111 »

OP

You have 175+115=290 in liquid accounts and 185k in equity in the rental. You earn 350k per year or about 29k per month

Sell the rental. Buy 1.7m house at 20% or 340k down. Get gifts from family if you don't want to liquidate the taxable for tax reasons. PITI should be about 7k to 8k. You can easily afford it on 29k income
AV111
Count of Notre Dame
Posts: 448
Joined: Fri Oct 11, 2013 1:08 pm

Re: Buying a Home in SoCal

Post by Count of Notre Dame »

Born and raised in Southern California here. I wouldn't stay in the state if my wife and I weren't high income. Living far inland has a similar climate to other states such as Arizona and it would not be worth paying the state income taxes to stay here in that case.
User avatar
Quirkz
Posts: 637
Joined: Mon Jan 14, 2019 4:32 pm

Re: Buying a Home in SoCal

Post by Quirkz »

OP, there's a whole lot going on in your world right now. Job stress, financial stress, deep fundamental disagreements with your spouse about a bunch of things, and on top of that the possibility of kids, too. This is partly a financial question, but honestly it's mostly NOT a financial question.

You and your spouse need to spend some time figuring out ways to get on the same page. That could be some long conversations, that could be some counseling. Definitely do that BEFORE you start trying to have kids, because if you can't sort things out now, there's no way you can sort them out when you're exhausted, sleep deprived, and have a bunch of new worries.

Strictly speaking from the financial side: yeah, $1.7 mil sounds like a huge stretch on your income, but California housing is always weird, and I don't know whether this is one of those exceptions or it's just not going to work. You sound miserable at work, though, so I echo the others who say you ought to at least look at other jobs -- even if you can't find one that pays more, and you might, you might at least find one that's has better working conditions or follows through on their promises. Either that or you need to find a way to get your current employer to follow through, which again is hard to do short of having another job offer as a fallback.
Shalom Aleichem
Posts: 263
Joined: Tue Mar 16, 2021 8:55 pm

Re: Buying a Home in SoCal

Post by Shalom Aleichem »

You have 200K equity in a rental property with gross return 6K per year, so about 3% ROI, before adding expenses (taxes, mortgage, insurance) and are paying >4%. Sell the rental.

San Diego is the best city in California, no question. But you're still in CA. I'm in LA and looking to see how I can get out. San Diego is a great place to live but in general CA is not. If wife wants to stay in CA, money will be tighter here than almost anywhere else. If wife wants to stay, that will mean living a less extravagant life as compared say to TN, NC, TX or ID (all places I'm looking to move to). Maybe WY.
Shalom Aleichem
Posts: 263
Joined: Tue Mar 16, 2021 8:55 pm

Re: Buying a Home in SoCal

Post by Shalom Aleichem »

dboeger1 wrote: Tue Apr 13, 2021 5:04 am I also have a hard time believing you can't find another job, especially since you had one in TX paying more for substantially less work. There's something wrong there. I think at times, we can feel trapped by a bad work situation that keeps us so busy that we don't dedicate enough time and effort to finding ways out, but an unbiased outsider can clearly see that the job is the problem. Does everyone you work with work 3x-4x as hard as you did in Texas for less pay? That just doesn't seem sustainable. I know proposing one spouse put their career on hold has fallen out of favor, but at some point, I don't see how moving to a more expensive area so that your spouse can make a little more is worth you working yourself to death for less money. Could you potentially increase your income even more going back to TX and working the same long hours as you do now? Could your spouse potentially use the recent job experience in CA to get a higher-paying position in TX?

The thing about your post is that it reads like a wishlist of everything. I want a mega yacht, a beach house, and enough money to never work again, but I can't have all those things until I reach that level of success or take on a huge amount of risk. Your spouse wants to continue furthering their career in sunny SoCal, 1-2 kids, a $1.7m house, and for you to work unnecessarily long, stressful hours to afford it despite having a better career option elsewhere. Your finances are such that you may be able to pull it off, but you'd be going from extreme financial discipline to trying to buy your dream home and have a bundle of kids all at once, and it sounds less like a partnership and more like your spouse calling the shots to get what they want. I would maybe ease into these new lifestyle choices by prioritizing the kids, house, or careers, but not necessarily all at the same time. Your spouse should understand that just because they want a certain level of house in isolation doesn't mean that your lives together will improve holistically by buying it. Everything's a tradeoff. It might make more sense to buy a cheaper home and have one spouse stay home and raise the kids, or it might be worth it for both of you to continue careers but hire an in-home nanny or grandparent to help with the kids. There are just a lot of things pulling in all different directions and you should understand as a family where you're willing to compromise.
If a physician there are some fields that are completely dominated by one group. I can think of at least one field in SD that if you want a job there is really only one group. If you are a rep, it might be for an item that most people use the competitor and you are having a hard time breaking that pattern.
neowiser
Posts: 236
Joined: Sun Sep 27, 2020 4:32 pm

Re: Buying a Home in SoCal

Post by neowiser »

Have you been working with a realtor? I think you need to enlist some local professionals (realtor, fee only financial planner) into your plan to provide impartial, factual information to your spouse. The decision to purchase a house should never be based on emotion, and no one should purchase based on an emotional attachment to a property. Houses with multiple bids in CA are going for much higher than asking price, and you do not want to get into a bidding war.

A good realtor can let you know about properties before they come on the market, and you should look at many properties before making an offer. A building boom may be poised to take place in CA due to state legislation requiring each region to increase available housing. Local zoning rules are undermined by the new legislation, allowing development that had previously been blocked. https://www.hklaw.com/files/Uploads/Doc ... onLaws.pdf
IMO
Posts: 1569
Joined: Fri May 05, 2017 6:01 pm

Re: Buying a Home in SoCal

Post by IMO »

I don't get the rental property in your situation. A $500K mortgage and your netting $500/month after expenses (normal expenses I should add, not counting unforeseen expenses I suspect). I'm presuming rental is not in same area (back in Texas?). If it's in same area, then just move into your rental.

Sell rental: $200K equity, apply that to $1.7 mil home, so your now at $1.5K million.
To get 20% down, family provides the $140,000 balance ($340K-$200K), home mortgage now at $1.36 million.

Now figure out if your okay with the $1.36 million mortgage with income situation/expenses (don't forget the future 2 kid expenses), etc.

Part of your post doesn't make sense. People are coming/going from current employer because of work environment issues on one hand. On the other hand, you can't possible find another job somewhere else? If you truly cannot find another job in the area and you don't really like the current one, and you'll need the income to stay/buy a home in area, then you'd better come to grips with the fact that you're stuck working with that employer for the long term. Am I missing something?
cadreamer2015
Posts: 1536
Joined: Wed Apr 08, 2015 1:52 pm
Location: North County San Diego

Re: Buying a Home in SoCal

Post by cadreamer2015 »

Zillow says my 2000+ square foot 3 bedroom 2 1/2 bath home west of the 5 about 1/2 mile from the beach in Carlsbad is worth $1.2 million (I’m not interested in selling). I don’t know where you get $1.7 million as the minimum home you’re willing to look at.
De gustibus non disputandum est
User avatar
Watty
Posts: 28860
Joined: Wed Oct 10, 2007 3:55 pm

Re: Buying a Home in SoCal

Post by Watty »

Sell the rental. Not only are the numbers bad but if you own the rental and buy a house to live in you will have way too much of your net worth in real estate which would be a diversification problem.

Get family and/or individual counseling you have a lot going and if you have kids that will only make your life more complex and stressful.

Rent a better place to live in since that will take a lot of pressure off needing to buy a house right away.

I would hold off on buying a house until you have the kids. You may need expensive fertility treatments or high adoption costs so it would be good to have funds available for that. If any of your kids have even minor and temporary health issues then that could make daycare an undesirable or impossible choice so you may need to go down to one income for a while.

When you consider taxes and the cost of daycare it might make financial sense for the lower earning spouse to be a stay at home parent for a few years if they have any desire to do that.

You may want to postpone buying a house until your oldest kid is about ready to start kindergarten. I did not try to crunch the numbers but I would think you could put about $100K a year into your house fund in addition to your normal retirement savings.
Last edited by Watty on Tue Apr 13, 2021 6:10 pm, edited 1 time in total.
Firemenot
Posts: 1497
Joined: Wed Apr 01, 2020 8:48 pm

Re: Buying a Home in SoCal

Post by Firemenot »

Agree on sell the rental. The numbers don’t make sense to me.

Why not just rent a larger apartment for now? You don’t have any children yet. And even with one child a two bedroom apartment is fine. We lived in a two bedroom/1 bathroom house with our first child until she was past 3. It was totally fine. In fact, a more compact space was kind of nice as she was never too far from us and we could let her roam.
User avatar
GKSD
Posts: 323
Joined: Sat Mar 19, 2016 9:01 am

Re: Buying a Home in SoCal

Post by GKSD »

OP, where in San Diego are you targeting to purchase the house? The prices vary quite a bit. Needless to say closer to ocean will cost more. There are plenty of very nice areas and communities for family living away from ocean. I live in San Diego too. The prices have gone up but you can get a nice house ~3000 sq.ft for 1.25-1.35M about 10-15 miles away from ocean. For example https://www.redfin.com/CA/San-Diego/114 ... me/6283401 or https://www.redfin.com/CA/San-Diego/115 ... me/6283602
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

Sell the rental. It isn’t helping you any. Apply the rental equity to down payment.

Housing inventory in San Diego (and everywhere else from what I understand) is low, and things are selling in a day or two, so you might not be able to find what you want right away. But...you also don’t need to spend $1.7 million to get a perfectly good house in a perfectly good neighborhood. It won’t be La Jolla, and it won’t be 3000 square feet, but there are good family homes in good neighborhoods for $1.0-1.3m. Just not next to the ocean.

Not sure what to say about the job thing. San Diego county has 3.5 million people. Is there really only one place you can work?

With $300k income, you could live in a bigger rental while you’re waiting to buy. That’s an option, too. You don’t have to be in a 1 bedroom.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

cadreamer2015 wrote: Tue Apr 13, 2021 5:28 pm Zillow says my 2000+ square foot 3 bedroom 2 1/2 bath home west of the 5 about 1/2 mile from the beach in Carlsbad is worth $1.2 million (I’m not interested in selling). I don’t know where you get $1.7 million as the minimum home you’re willing to look at.
Yeah, I was thinking the same. Zillow says my 2350 sqft historic home in a super desirable location next to Balboa Park is $1.3m. Most places around here are going in the $1.1M range. My neighbors are all doctors, and they seem to think the neighborhood is fine.
User avatar
UncleLeo
Posts: 257
Joined: Wed Jul 12, 2017 12:43 am

Re: Buying a Home in SoCal

Post by UncleLeo »

Cyclesafe wrote: Tue Apr 13, 2021 7:02 am
You can't afford $1.7M and anything lower priced these days in an upscale San Diego neighborhood is not worth being bankrupt (or perpetually house-poor) for. As for La Jolla, $1.7M buys a small fixer-upper at best, and that would be EAST of 5. Forget La Jolla and all the beach cities west of 5.
Why do they need to live west of 5? That's very close to the beach. Here a nice house in a nice and safe area for half of 1.7M - https://www.redfin.com/CA/Carlsbad/2743 ... me/3419169
Sure, it's going to sell above asking price, but still way less than 1.7M
inbox788
Posts: 8372
Joined: Thu Mar 15, 2012 5:24 pm

Re: Buying a Home in SoCal

Post by inbox788 »

IMO wrote: Tue Apr 13, 2021 3:09 pmPart of your post doesn't make sense. People are coming/going from current employer because of work environment issues on one hand. On the other hand, you can't possible find another job somewhere else? If you truly cannot find another job in the area and you don't really like the current one, and you'll need the income to stay/buy a home in area, then you'd better come to grips with the fact that you're stuck working with that employer for the long term. Am I missing something?
Why OP relocated in the first place? Appears to be a job problem not a house problem.
cowbman wrote: Tue Apr 13, 2021 1:28 amMy spouse's income improved considerably after moving from Texas, but mine actually decreased slightly. In addition, I work about 3-4x more. I don't think it's sustainable to work this much. ... My employer regularly has turnover without much thought of it (because of overworked employees at low salaries vs competitors). I've been promised a job I desire, but they keep assigning me more "pressing" tasks. This has led to me working for a year (hard) in a job I don't like for the promise of something to come. That being said, it appears as if there is very little upside on my salary.

... feel I cannot do it here (because salary is lower than elsewhere for me or the same with much higher COL). Spouse does not wish to leave and is very happy with their job. We have very stable jobs with almost no risk of being laid off in a recession (both in healthcare). There are no other available jobs in the area for me, so changing jobs is not an option for me without relocating.
OP, how much of this did you know before moving out to SoCal? You had to know that for similar salary, moving from LCOL area to HCOL would mean lower standard of living. You've got to "sacrifice" something.

Was was your savings rate before the move and now? Annual non-discretionary spending before and after?
hungrynow
Posts: 12
Joined: Mon Aug 08, 2011 12:21 pm

Re: Buying a Home in SoCal

Post by hungrynow »

I would suggest getting a divorce and moving back to Texas. You can get your old job back that you love and not be forced to pay 1.7k. Be glad you don’t have any kids yet.
grkmec
Posts: 255
Joined: Wed Jun 22, 2016 8:46 am

Re: Buying a Home in SoCal

Post by grkmec »

1) sell rental ASAP, it makes zero financial sense
2) you have a relationship problem, not a money problem
3) you have a job problem
4) problems #2 and #3 get exponentially worse with kids

Your stress level already seems pinned at “10”. You are obviously not happy. Your situation is unsustainable. Buying a $1.7mm house right now locks in your stress level at an “11” for the next 20 years. Don’t do it. You will hate your spouse and your life.

I suggest you get some counseling.

Finally, this might sound harsh, but if you spouse expects you to work like a slave in a job that is causing you this kind of stress, then are they really interested in your mental welfare and happiness? Please don’t add kids into this environment. It’s a ticking time bomb unless there are structural changes.

Good luck
Freetime76
Posts: 745
Joined: Wed Jun 26, 2019 8:26 pm

Re: Buying a Home in SoCal

Post by Freetime76 »

hungrynow wrote: Wed Apr 14, 2021 6:10 am I would suggest getting a divorce and moving back to Texas. You can get your old job back that you love and not be forced to pay 1.7k. Be glad you don’t have any kids yet.
Oh dear. I believe the point is to avoid this outcome by neither person ending up miserable :wink: lol.

Another vote to sell the rental - you’re getting nothin out of it and you can better use the equity for yourselves.

Also, if DW wants a house and we are talking kids and there is a job issue and she may/may not be working afterwards (sometimes it’s not your choice and becomes a medical thing)...we have to plan and prioritize Big Time. I’ve noticed that many times, something unpalatable is OK for a period of time if it is a means to a clear end. That means map it out: okay, aim for a house and kids :D .
step 1 - sell rental. A nobrainer, financially. In the meantime, learn the markets and neighborhoods better.
step 2 - scout loans and secure, decide on buying budget.
step3 - engage realtor and house shop
(Kids - whenever you choose. Just know that children do not die from living in a rented place.)

I’d suggest waiting on the realtor until you are actually in agreement about buying and the budget. Otherwise, you find a house that is $1.7 million, the realtor stresses you and/or DW out (she loves the place, of course)...process takes on a life of it’s own.

Disclaimer: I don’t make decisions based on fear and I don’t like rushing At All. I’d rather be ready and pounce when I see The One or A Deal. Also, never look at homes above your price range.
Please spell out new acronyms. Thank you.
Ramjet
Posts: 1464
Joined: Thu Feb 06, 2020 10:45 am

Re: Buying a Home in SoCal

Post by Ramjet »

Sell the rental, purchase a duplex or twinplex, rent on side and live in the other

What made you move from Texas to California?
Firemenot
Posts: 1497
Joined: Wed Apr 01, 2020 8:48 pm

Re: Buying a Home in SoCal

Post by Firemenot »

I wouldn’t purchase anything until your job situation is settled. The transaction costs are too much. And it’s going to just add more stress to your already stressful situation.
DebiT
Posts: 995
Joined: Sat Dec 28, 2013 12:45 pm

Re: Buying a Home in SoCal

Post by DebiT »

Second the idea of considering different locations. My son and family have lived in Poway (north SD County) for 10 years, and I’m a new transplant close by. Great schools, wide range of housing. While not cheap, much more house than La Jolla, 25 minutes from Del Mar. Tight tight market here, but that’s true everywhere.
Age 66, life turned upside down 3/2/19, thanking God for what I've learned from this group. AA 40/60 for now, possibly changing at age 70.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

Just to be clear, the median home price in San Diego County is $730,000. So we’re talking about a house that’s 2.3 times the median.

The median household income in San Diego is just shy of $80k, so we’re also talking about a family income that’s 4 times the median.

I think the problem is really a job problem, combined with an expectation problem. A $340k income can buy a very nice life in San Diego. Just not what OP and spouse seem to expect. And the job stress, combined with OP feeling locked into the job, isn’t helping.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

hungrynow wrote: Wed Apr 14, 2021 6:10 am I would suggest getting a divorce and moving back to Texas. You can get your old job back that you love and not be forced to pay 1.7k. Be glad you don’t have any kids yet.
I didn't love my job in Texas either.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

OP here:

Thank you everyone for the replies. I'll add a little to clarify some things from the comments:

1) I moved from TX to SD for extra training/specialization. There are VERY few of what I now do (or at least for what I trained).
2) When training was finishing, finding jobs that were willing to allow me to do what I trained for were very few. Most of them said I could do it on my own time. My current job promised me some paid time at least, though I haven't received it because of staff shortages (and politics). Found 1 job in the USA that was willing to pay me full-time. It was in Maine, and my spouse did not wish to move to Maine.
3) There is a new boss who very much wants to utilize my skills and is promising by late summer/fall new staff to take on the non-specialized responsibilities of mine. The specialized I work I do is much less stressful, and considerably better compensated, so if things pan out as promised, I should be able to compensate for if my spouse stays home with the children.
4) Already having some fertility issues, so don't want to put this off further. Insurance is excellent and has covered everything (minus copays) so far. Our relationship is actually very good outside of the job/house thing.
5) Grandparents are more than willing to travel to help out. We very much feel we should house them as a compensation for the care they would provide (obviously not a have-to, but this factors in some).
6) We can be a bit difficult with housing (as suggestive). Areas we are examining including La Jolla (though pretty much priced out of here), Carmel Valley, Del Mar, Solana Beach, RSF (similarly priced out), so we are mostly now looking at Del Sur, RB, Scripps Ranch, Encinitas. My spouse is pretty particular about finishings and layout, and I don't want to over burden myself with much worse commutes (south of I-8 though may move to 4S Ranch and/or La Jolla).
7) I will look into selling the rental (yes in TX), though I feel bad as the tenant has been superb and signed a new 3 year lease last year. I have clauses to raise the rent each year. I'm somewhat fearful to put in on the market with a tenant living in it (lease allows it). We attempted to sell if in 2018 though the market wasn't supporting the value I thought we should obtain. Things are different now, so it may support it now.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

dboeger1 wrote: Tue Apr 13, 2021 5:04 am I also have a hard time believing you can't find another job, especially since you had one in TX paying more for substantially less work. There's something wrong there. I think at times, we can feel trapped by a bad work situation that keeps us so busy that we don't dedicate enough time and effort to finding ways out, but an unbiased outsider can clearly see that the job is the problem. Does everyone you work with work 3x-4x as hard as you did in Texas for less pay? That just doesn't seem sustainable. I know proposing one spouse put their career on hold has fallen out of favor, but at some point, I don't see how moving to a more expensive area so that your spouse can make a little more is worth you working yourself to death for less money. Could you potentially increase your income even more going back to TX and working the same long hours as you do now? Could your spouse potentially use the recent job experience in CA to get a higher-paying position in TX?

The thing about your post is that it reads like a wishlist of everything. I want a mega yacht, a beach house, and enough money to never work again, but I can't have all those things until I reach that level of success or take on a huge amount of risk. Your spouse wants to continue furthering their career in sunny SoCal, 1-2 kids, a $1.7m house, and for you to work unnecessarily long, stressful hours to afford it despite having a better career option elsewhere. Your finances are such that you may be able to pull it off, but you'd be going from extreme financial discipline to trying to buy your dream home and have a bundle of kids all at once, and it sounds less like a partnership and more like your spouse calling the shots to get what they want. I would maybe ease into these new lifestyle choices by prioritizing the kids, house, or careers, but not necessarily all at the same time. Your spouse should understand that just because they want a certain level of house in isolation doesn't mean that your lives together will improve holistically by buying it. Everything's a tradeoff. It might make more sense to buy a cheaper home and have one spouse stay home and raise the kids, or it might be worth it for both of you to continue careers but hire an in-home nanny or grandparent to help with the kids. There are just a lot of things pulling in all different directions and you should understand as a family where you're willing to compromise.
Yes my job in Texas was much less work than most jobs, but the lower level staff and administration was horrendous. Staff here is much better, but much more work is expected of me. I have been unable to find jobs doing what I do in Texas. There are related jobs for even less than I make now. Spouse likely could make more if returning to Texas. Neither of us particularly enjoyed living there, primary motivation to return would be close to family and lower COL. We both much prefer living here.
Tribonian
Posts: 312
Joined: Thu Dec 21, 2017 6:33 am

Re: Buying a Home in SoCal

Post by Tribonian »

If the rental unit was a primary residence, you may want to sell now so you can avoid LTCG. Selling will also build up your down payment and make it easier to qualify for a mortgage.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Where else would you suggest? We've thought about Poway, but it's pretty far and hot.
stan1
Posts: 14246
Joined: Mon Oct 08, 2007 4:35 pm

Re: Buying a Home in SoCal

Post by stan1 »

There are homes in areas with good school districts such as Scripps Ranch, Rancho Bernardo, Carmel Mountain Ranch, Poway, and maybe even Carlsbad or Encinitas within a reasonable price range for you, but they may be built in the 70s, 80s or 90s and might be around 2000-2500 square feet.

University City is an option location wise, but you may prefer the public schools in one of the above locations (although University City is convenient to several private schools)

I think RSF or most of Del Mar is aspirational for you. Maybe you'd find something in Carmel Valley or Del Mar Highlands.

You will find one off examples of course. Some one off examples might look good until you realize they back onto a freeway.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

cowbman wrote: Wed Apr 14, 2021 1:02 pm
quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Where else would you suggest? We've thought about Poway, but it's pretty far and hot.
It kinda depends on where you work. If you’re on the north county coast, then probably further up the coast. If you’re somewhere accessible to the 15, then someplace on the I-15 corridor, maybe Rancho Peñasquitos, Carmel Mountain Ranch, or Rancho Bernardo. There are pockets of Mira Mesa that are good. I would set a lower budget and have a realtor take you around to see places you haven’t considered. Also consider that it sounds like your wife has really particular style tastes, and it might be more cost effective to buy an older house in an older neighborhood, then remodel it to fit your tastes.
User avatar
tyrion
Posts: 1423
Joined: Fri Feb 08, 2008 2:33 pm

Re: Buying a Home in SoCal

Post by tyrion »

cowbman wrote: Wed Apr 14, 2021 1:02 pm
quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Where else would you suggest? We've thought about Poway, but it's pretty far and hot.
Scripps Ranch or Tierrasanta

Both have neighborhood feel, nice houses on decent sized lots, and are in the $1M range. Go up a little in price and you could land something on a canyon, with a pool, etc. Commute would not be too bad to most places in San Diego unless you commute at the worst times.

I'm surprised nothing short of 1.7 million will do considering you're in a 1 BR apartment now.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

Thank you all. Yes, when I say Del Sur, I actually meant all of 92127 and 92129. We've also looked as far as Carlsbad, but I'm concerned about the commute. Encinitas has not panned out to be less. I'd be most happy in 92130, though everything is going considerably above asking. 92130 is too expensive on our current budget to fix up. Lost on 2-3 homes in 92131 because they went $200k+ above asking. Same with torrey highlands.
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

tyrion wrote: Wed Apr 14, 2021 1:29 pm
cowbman wrote: Wed Apr 14, 2021 1:02 pm
quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Where else would you suggest? We've thought about Poway, but it's pretty far and hot.
Scripps Ranch or Tierrasanta

Both have neighborhood feel, nice houses on decent sized lots, and are in the $1M range. Go up a little in price and you could land something on a canyon, with a pool, etc. Commute would not be too bad to most places in San Diego unless you commute at the worst times.

I'm surprised nothing short of 1.7 million will do considering you're in a 1 BR apartment now.
Their philosophy is save up until you can get what you want. Problem is market is rising faster than saving.
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Buying a Home in SoCal

Post by rascott »

hungrynow wrote: Wed Apr 14, 2021 6:10 am I would suggest getting a divorce and moving back to Texas. You can get your old job back that you love and not be forced to pay 1.7k. Be glad you don’t have any kids yet.
Lol.... direct... but probably spot on. This is a marriage problem, not a financial one
User avatar
bligh
Posts: 1533
Joined: Wed Jul 27, 2016 9:13 pm

Re: Buying a Home in SoCal

Post by bligh »

Since you've asked, my humble opinion is that you sit with your spouse and hash out what your priorities in life are. There is no advice that can be given on this board that can really help you in your situation. To me, it simply appears that you and your spouse have different comfort levels on how much to spend on housing. I imagine this is quite common. Try to reach a common understanding, express your concerns to your wife so she sees what is giving you pause .. and in turn, keep an open mind and try to understand her concerns/issues.

Having said all that, I essentially agree with you 1.7 million is way too much to spend on a house at your income/net worth level. Even if you are able to raise enough downpayment to bring your mortgage down to 1.2-1.3 million, your mortgage would be as large as your entire net worth. That is a level of debt I simply would not be comfortable with myself. In your position, I would see if I could sell my rental and use the equity from that sale to purchase a 1-1.2 mil house at most. If my spouse and I couldn't reach an agreement, then we would continue to rent. We would likely rent a bigger and nicer place. Move to renting a comfortable 3-4 bedroom house/townhouse while we thought things over instead of being in 1 bedroom apartment. Paying more for rent isn't throwing money away, it is paying money to buy options for yourself and time to see how things play out... sell the rental and getting the equity out, etc.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Buying a Home in SoCal

Post by quantAndHold »

cowbman wrote: Wed Apr 14, 2021 1:47 pm
tyrion wrote: Wed Apr 14, 2021 1:29 pm
cowbman wrote: Wed Apr 14, 2021 1:02 pm
quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Where else would you suggest? We've thought about Poway, but it's pretty far and hot.
Scripps Ranch or Tierrasanta

Both have neighborhood feel, nice houses on decent sized lots, and are in the $1M range. Go up a little in price and you could land something on a canyon, with a pool, etc. Commute would not be too bad to most places in San Diego unless you commute at the worst times.

I'm surprised nothing short of 1.7 million will do considering you're in a 1 BR apartment now.
Their philosophy is save up until you can get what you want. Problem is market is rising faster than saving.
You’re pressuring yourselves to buy at the worst possible time, both in terms of what’s happening in the market, and what’s happening in your personal lives. Find a rental you can actually live in like human beings, that doesn’t feel like temporary housing. Sort our the job. Get pregnant. Then revisit the house thing.
yakk0
Posts: 82
Joined: Mon Nov 27, 2017 3:41 pm

Re: Buying a Home in SoCal

Post by yakk0 »

quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Agree with quantAndHold on all counts. You reeled off a list that includes some of the most expensive ZIP codes in the country, much less SD county. You need to adjust your expectations. You're not going to get everything you want at the price you want, that's just the reality of the housing market here. The jump from a 1bdrm apt to a 1.7M SFH seems excessive too, considering you don't have kids yet.

You've talked about wanting a house with a particular layouts/finishes, which I assume means modern, open plan, recent construction? You don't mention anything else as being important. Some of the nicest neighborhoods are also old and well established, so you may be limited to flips that may or may not be done to your taste, fixer-uppers that you then have to remodel to your taste, small square footage, various additions leading to an odd layout etc.

A few of my favorite neighborhoods with ~1.5M homes are Point Loma, Bay Park and Mission Hills. I'm biased towards coastal, central locations. But in all those cases it'll likely be older/smaller/oddly laid out homes. Public schools are OK but not the best in the county, although it seems like they are improving over time. When we moved, I went from a ~40 min commute to a ~15 min commute pre-pandemic and it's glorious. I can't imagine having to commute from 4S to south of the I-8 every day.
investingfan
Posts: 54
Joined: Sat Jan 09, 2021 7:32 pm

Re: Buying a Home in SoCal

Post by investingfan »

I think you guys can afford it but I wouldn't buy now. Maybe rent another year?
Topic Author
cowbman
Posts: 638
Joined: Sat Jan 14, 2017 1:10 pm

Re: Buying a Home in SoCal

Post by cowbman »

yakk0 wrote: Wed Apr 14, 2021 2:45 pm
quantAndHold wrote: Wed Apr 14, 2021 1:00 pm Given what you just wrote, I would put off buying for now. If the job works out and you get to do what you want to do, great, start the home search then. If it doesn’t, at some point you’re probably going to do another nationwide job search, and then the house will be an albatross. My suggestion would be to rent a bigger place in the meantime, and get on with your life in a rental.

I know y’all want what you want, but you’re looking for housing in THE most expensive neighborhoods in San Diego. You make good money, but you don’t make enough to compete with the really big dogs, especially if your wife stops working. You probably need to adjust your expectations. There are lots of very good neighborhoods with good housing stock and good schools that you aren’t looking at that are less expensive.
Agree with quantAndHold on all counts. You reeled off a list that includes some of the most expensive ZIP codes in the country, much less SD county. You need to adjust your expectations. You're not going to get everything you want at the price you want, that's just the reality of the housing market here. The jump from a 1bdrm apt to a 1.7M SFH seems excessive too, considering you don't have kids yet.

You've talked about wanting a house with a particular layouts/finishes, which I assume means modern, open plan, recent construction? You don't mention anything else as being important. Some of the nicest neighborhoods are also old and well established, so you may be limited to flips that may or may not be done to your taste, fixer-uppers that you then have to remodel to your taste, small square footage, various additions leading to an odd layout etc.

A few of my favorite neighborhoods with ~1.5M homes are Point Loma, Bay Park and Mission Hills. I'm biased towards coastal, central locations. But in all those cases it'll likely be older/smaller/oddly laid out homes. Public schools are OK but not the best in the county, although it seems like they are improving over time. When we moved, I went from a ~40 min commute to a ~15 min commute pre-pandemic and it's glorious. I can't imagine having to commute from 4S to south of the I-8 every day.
Thanks, but spouse 2 works in Solana, so we'd like to avoid the commute up I-5 in the morning post-pandemic. That being said, we've looked at Bay Park and Point Loma, as well as parts of Pacific Beach. Point Loma would be 30-40 minute commutes for both of us, so definitely not ideal. I don't think long-term I'll be working primarily south of I-8. Likely more La Jolla and 4S. Mission Hills has consistently been too expensive and I'm concerned about school quality there.
Post Reply