Home Buying in Seal Beach>Question Details

Jeanne Torres, Home Buyer in 92692

Quality of Life: Buy or Rent?

Asked by Jeanne Torres, 92692 Tue Jul 28, 2009

My better half is in law enforement and wants to live in an area thats quiet, no crime, no trash, billboards or other noisy hassles. In otherwords, away from anything bustling, but nothing more that 30 miles to commute one-way. We've been saving money to buy, but the price of that "quality of life" is so out of reach. Should we just pay off all remaining debt and rent where we want to live longterm? Someone convince me why we should buy a townhome/condo in a so-so city just for the sake of owning something? Property value wont jump the percentage it did from a few years ago, right?

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Dear Jeanne,

You are not alone in your situation at all! However, the one advantage you do have is that you have time to do your research. I would suggest you look into purchasing a short-sale or an REO in a neighborhood that you would like to live in. There are many areas I would suggest you look into such as the Pasadena area or even a little more to the east. Right now is a great time to buy because FHA loans have expanded the ability of the southern Californian to own a home.

With regard to financing help, I have a great contact at a direct FHA lender (where you won't be paying broker fees) who would be more than happy to discuss financing arrangements with you. His name is Houtan Hormozian of American Guardian Home Loans. You may reach him directy via email at hhormozian@amguardian.com or via telephone at 877 242 5215.

Also, I would love to speak to you about areas that are great to live in and within 30 miles from Downtown LA.
Please feel free to visit my website and contact us!
Web Reference: http://www.crestico.com
0 votes Thank Flag Link Mon Aug 3, 2009
Tim,
Your children aren't rare. Most of us are soooo eager to finally be a home owner. Trust me! I would love to stay in one place for years!!! But you can't predect the future. Me getting laid off has made us move a few times. Sign of the times, you can't make it on one income. It's just the friends that do own homes, feel trapped. It was one of those, well if this is the only place I can afford, then I'll buy it just to get into the market. But now the location is what's killing them. Jobs have moved around, prices have fallen and they all feel trapped. Why buy in Corona or Beamont just to get into the market, meanwhile you hate living there and now your new job is 50 miles away.
Based on stress, anxiety and health of a peace officer, we have no choice but to find a place thats no more than 30 miles from downtown LA and has a very low crime rate. That's where we're screwed. We can't afford anything over 400k. No such magical home exisits with those variables and a condo is no fun with 2 dogs.
0 votes Thank Flag Link Wed Jul 29, 2009
Hi again, Jeanne,

There's a tail end question you asked that hasn't really been addressed. Property values, and the likelihood of them "jumping", as you said. In line with my earlier advice - to probably keep renting for a while, I personally feel that today's prices will nudge upward "gently" for a few years. Probably around 5% per year.
In the price range you described, that amounts to around $15,000./year, in value, BUT only $525. in actual down payment funds - at FHA's 3.5% down.

In addition, there are still a few "experts" out there who say that values are ( ARE, not maybe.) going to go further down. As someone with experience in over 32 years of local ups and downs, I don't think that will be the case, but everyone is entitled to an opinion. I think that - especially in the lower price ranges - we hit the bottom for prices back in January, and in my humble opinion, those prices will never be seen again. ( Just like the house I bought back in 1970, for $27k - which is now worth over $400k, easy.)

Prices will nudge up - and probably not jump up, for at least a couple of years.
Good luck to you - contact me if I can be of assistance.
0 votes Thank Flag Link Wed Jul 29, 2009
Jeanne,

You're right (in one respect) that all us Realtor/Brokers make our livings through people buying and selling homes. However, keep in mind that the seller is the one paying the commissions and the bulk of the closing costs. However, the 20% of us who actually meant what we said when we swore to uphold our fiduciary responsibility to our clients - whether buyer or seller - really do want to look out for your best interest.

If your plan is to move every two or three years, then, at least for the foreseeable future, I would strongly recommend remaining a renter. The biggest reason being that what little appreciation you will see in that time frame over the next five to ten years will mostly be eaten up by the closing costs of selling your old home and buying a new one.

On the flip side, if you plan on staying in a home five to seven years, history has proven that you WILL NOT lose money.

One final note, I guess my children (28, 30 & 31) are rarities in your generation because they all three are desperate to buy their first home rather than throw money down the rental drain.

Bottom line, it's all dependent upon your wants and desires. I would love to help you find and buy your next home (I think I've already said that) BUT, only if it's what is right and best for you.

Sincerely,

Tim Kunze
Web Reference: http://www.TimKunze.com
0 votes Thank Flag Link Wed Jul 29, 2009
Most of you Realtors/Brokers say to Buy real estate so one day you wont have a house payment and we'll have financial freedom. Either you're really hoping to have a cut in our transaction, or you're all out of touch with today's realities.
My generation, composed of the young 30 year olds, don't have any desire to stay in their homes for 30 years. Life fluctuates way to much! Layoffs, downsizing, losing money in 401ks,companies don't even offer pensions anymore. The family grows, have to get the next internet provider, or the next cell phone plan, property taxes always increase. And though half our income is secure with the enforement job, I on the otherhand have had 7 jobs in 9 years. (No I'm not a loser) Marketing and design firms are never stable. Then again, there's no loyalty within any employer now. Out of all my friends that own homes, I don't know one family that's stayed in their place longer than 5 years or has been at their jobs more than 3-4 years since coming out of college. Half of them can't wait to move! They feel trapped in their mortgages and wish they didnt buy where they did. It's a different life/time than it was 30 years ago. Plus there's too much of a gap between salary and the price of a home. It seems like if you got into the market before 2002, you're good to go, otherwise goodluck finding a decent home you can afford.

So please be logical and realistic answering my question. I'm really trying to find out the truth in what's best.
0 votes Thank Flag Link Wed Jul 29, 2009
Hi Jeanne, Have you considered buying a coop? If you are looking in the Sea Beach area, which is definitely safe and quiet, Leisure World would be an option. They have 650 square foot 1 bedroom units starting at 68,000.00 and 750 square foot 2 bedroom units starting at 98,000.00. If you are looking for a single family home Lakewood or Westminster would be good places to look. Please feel free to call me with any questions.

Best regards

Vickie Van Ert
Prudential California Realty
562-296-5064
vic791@gmail.com
0 votes Thank Flag Link Wed Jul 29, 2009
Jeanne,

Bob is right, some just aren't listening to your original question nor to your subsequent comments. My suggestion would be to consider something right up the 605. La Habra, La Mirada, Whittier and some of the other cities in Northwest OC (and adjoining LA County) would give you some possibilities in your price range. Another hidden gem up that way is Brea or how about Cypress? There are 469 properties for sale in those five cities that are priced under $550,000. 157 are attached (condos/townhomes) and 309 are detached. Of course, we have to eliminate the few "manufactured homes" that some agents just can't seem to figure out belong in their own special category as well as some of the "undesirable" areas of those cities but that still leaves you with a pretty wide range of choices just in those few cities.

You don't give specifics as to where your husband is employed but are asking your question in the Seal Beach section of Trulia and do mention "nice areas of Long Beach" so I'm basing my suggestion on that location.

I'm heavily in favor of home ownership. There are myriad advantages to owning but I think the biggest is FREEDOM - freedom to chose your own colors, carpet, landscape and the freedom that, given time, you will no longer have a house payment (other than utilities, maintenance, taxes and insurance).

I'd love to help you find and buy your next home. Give me a call at 714-552-2335 or drop me an email at Tim@TimKunze.com.

I look forward to hearing from you,

Tim
Web Reference: http://www.TimKunze.com
0 votes Thank Flag Link Wed Jul 29, 2009
Hello Jeanne, I applaud you for both your question, and for taking more time than most people who post questions here, to thoroughly describe your situation. In spite of a fairly elaborate breakdown of both your capabilities, AND your desires, it appears one or two agents really aren't paying attention.

In the price range you've described, you are correct that, in the area you would prefer to live in, there are not many good choices or opportunities for a purchase. If you are looking to rent, and can be happy with that, I have one piece of advice. Try to find a landlord who has owned the property for a while, who hasn't overly encumbered the place, and who intends to hold the property as a rental for a long time. That combination should give you some payment stability.

You do have capabilities to purchase eventually, should you choose to - keep an eye on the market to see if conditions improve for buyers, or perhaps a unique opportunity, a kind of a friend of a friend situation, where you can buy at a reasonable price without the "feeding frenzy" furor of today's market. Good luck in finding solutions to your situation.
Web Reference: http://SouthOC.info
0 votes Thank Flag Link Tue Jul 28, 2009
I'd love to discuss this with you by phone -- easier than writing a "book" here. If your "better half" is in law enforcement, then you are looking at crime statistics. Something you might consider is that some areas might look a bit questionable on total crime statistics, but actually are very wonderful. If they have a lot of colleges/universities or shopping malls, then the statistics might not look as great, but actually for homes, it's wonderful. http://www.househunt.com/safe-cities/ has several cities in CA that are recognized as being in the top 25 cities in the US. I would need to discuss your needs (#bedrooms, #baths, other NEEDS vs. WANTS) and start searching. I'm very tenacious, and would love to help you. My clients are always satisfied. Our agency is #1 in No. OC, and I'm a top agent. Can you call or email me? 714.296.0513 Bonnie@BonnieTheRealtor.com. I think it would be best to "talk." I can help.
Web Reference: http://BonnieTheRealtor.com
0 votes Thank Flag Link Tue Jul 28, 2009
Jeanne,

If you have found an area you like in a crime-free area, then that's great! The houses under $500,000 are mostly in North Orange County. There are some nice houses in Mission Viejo, Foothill Ranch, Aliso Viejo, Rancho Santa Margarita under $600,000....in fact mid to low $500,000s. But anything much lower than that are probably short sale teaser prices. Maybe not...we could check.

You have some options....I would suggest that you find an agent you like who can help you in a few areas, and then see what you can find and decide from there. You can look at homes in So Org Cty and see what you think and what you can get....then make some decisions.

K
0 votes Thank Flag Link Tue Jul 28, 2009
We have a combined income of 150k
We have a lender already that works with "Public Servants"
We have a link to their website, we see the prices.
We only have enough for the FHA 3.5% down
It's not about a beautiful home, it's about a crime-free, quiet city.

Bonnie, Where are there homes that are fit that criteria under 500k?
0 votes Thank Flag Link Tue Jul 28, 2009
My goodness -- everyone has an opinion. Me, too! My suggestion would be to really work closely with an agent you trust (I could be that agent) and take a day to be educated as to what is available. If you realize that taxes and interest are tax deductible, and by paying rent, you're essentially paying your landlord's mortgage, you really should at least seriously consider buying. It's really not true that the only safe neighborhoods in North Orange County are at least $700K. There are some beautiful homes that are not nearly that much. That's why it pays to work with an agent who will listen to you and to what you want to have in a home. I have contacts with lenders who supply great loans to public servants (such as police) and you should at least check into it. Please call me at 714.296.0513 and I will be happy to go over options with you and set up a website for you that will do an automatic free search daily to see what's out there. Prices are starting to stabilize and even rise in areas of OC. What if you rent and the landlord gives you notice that you need to move? -- they're selling, they're being foreclosed, or whatever. Having your own home will pay off long-term. Maybe not in the next year or two, but I feel that OC is where property values will mend sooner than other areas -- look around! Great prices. Great weather. Near the beach. Negligible humidity. Plan right now for your financial and personal future would be my recommendation. I'd be happy to meet with you and take you through Home Buying 101 and show you some areas. You'll be surprised. I'm a top agent with a top company. Please give me a call or email Bonnie@BonnieTheRealtor.com.
0 votes Thank Flag Link Tue Jul 28, 2009
Hi Jeanne,

I vote for quality of life.....but maybe with a twist. Have you considered picking up a rental property to get you into the stream of home ownership? Then rent a home that you would like to live in until such time as you might have made some equity in the rental and can use that to move into a primary home purchase?

The main thing is not to over extend and not to put off life. That's my opinion. If you need a larger home than you can afford to buy for your family? Then rent it and enjoy today. It goes along with my "hit by a bus" theory. Don't take undue (and this is key....undue...or excess) care for the future, you might step off the curb tomarrow and be hit by a bus. So.....examine everything and decide what's important for you now.

Hope that helps!!! Good luck with your decision-making. If I can help in any way...please let me know.

Karen
0 votes Thank Flag Link Tue Jul 28, 2009
Joe,
Im very familar with Mission Viejo and other South OC cities, but the 2 hour commute oneway in the carpool lane doesnt satisfy "Quality of Life". Nice areas of Long Beach are 700k plus, Seal Beach, Rossmore, Rancho Palos Verdes, Rolling Hills...All these places are close to the millions. A combined 150k yearly income can't pay for living in any of these places. It would take years to save for a 10-20% deposit. Thats why I want someone to still convince me why we should buy and not rent in the areas we want to live.
0 votes Thank Flag Link Tue Jul 28, 2009
Maybe I didnt clarify my question details. Credit score is in the 700's. A home in a nice, safe neighborhood in Southern California will run 700k and up. We make too much money for the 8k tax break and not enough to afford anything over 400k, if we would like to still have some financial freedom.
0 votes Thank Flag Link Tue Jul 28, 2009
Jeanne,

You and your better half are the only ones that can answer your questions. However, if you want the opinion of a retired Orange County Sheriff's Investigator, it would be to buy something. If you can find something that meets your needs and pay for it over a thirty year period, then you have a home that is paid off. If you rent for thirty years, then you have a rent payment the next month and you have paid someone else's home off. I have several rentals that I aquired over thirty years ago and my tenants have paid off my mortgage for me. My bottom line is THIS IS THE RIGHT TIME TO BUY!!. I am buying, my family is buying, and my friends are buying. I have been waiting for this market for over ten years, the last time I made a purchase. Again, this is my opinion and I would love to discuss it more with you if you wish.

Joe Homs
Wright Realty Partners
Retired Station 18
949-625-4533
0 votes Thank Flag Link Tue Jul 28, 2009
Have you tried looking for short sales or foreclosures in the area that you want to be in? In several areas in Virginia, I have seen clients pick up houses for more than $100k less than they would be normally. Perhaps in your area, it might be more of a difference in price. Look for an agent who specializes in foreclosures and short sales. It might make the purchase more affordable. And now with the $8k tax credit as well as lots of other "grants" which are available. Some are even for law enforcement and teachers.

Brenda Feria
Owner/Broker
Park Place Properties, Inc.
5604 Grove Avenue
Richmond, VA 23226
0 votes Thank Flag Link Tue Jul 28, 2009
Jeanne,

For most, the biggest part of the American dream is owning a home. For those Americans who are currently renting, the scales are beginning to balance and shift toward homeownership in the great debate of whether to rent or buy a home. Besides building equity for the future, the three major components that are tipping the scales in the favor of homeownership are the declining values of homes, historically low mortgage rates and the federal government’s $8,000 tax credit for first-time homebuyers.

For an additional $221 (estimated per an Associated Press analysis of 45 metro areas for the first quarter of 2009), renters can buy their own home. With the gap between a median-priced home and a median rent down to $221 from $777 just three years ago, this realization could signify a quicker conclusion to the national housing crisis if renters start buying up available housing. Some areas of the country have an estimated gap of approximately $100.

As home values have continued to decline over a two-year period, the timing couldn’t be better for renters to delve into the realm of homeownership. The National Association of Realtors recently reported that the median home price in the United States peaked in 2006 at just above $230,000. Today, the median home price has fallen over 25% to well below $175,000.

If this weren’t enough, current mortgage rates are still hovering near historic lows. Federal Reserve Chairman Ben S. Bernake recently stated that he expects current mortgage rates to remain “exceptionally low for an extended period.” But don’t wait too long, as rates unexpectedly skyrocketed last month, but have since settled a bit.

In addition to the historically low mortgage rates, first-time homebuyers can take advantage of the $8,000 federal tax credit. Only available until November 30, 2009, this tax credit can be utilized immediately, rather than waiting to file taxes at the beginning of 2010. It is important to note that this tax credit does not have to be repaid, unlike the tax credit from 2008 that was more comparable to an interest-free loan that must be repaid through tax returns over a 15-year period.

So if you’re currently renting, don’t just throw your money away on rent. You owe it to yourself to at least take a look at the possibility of owning your own home.

Best of luck!

Regards,
Total Mortgage Services
0 votes Thank Flag Link Tue Jul 28, 2009
Jeanne,

If you have debt, this will be lowering your credit score as your credit to debt ratio is one factor in determining the interest rate you could qualify for.

If you qualify you can get the $8,000 tax credit for buying something but at the end of the day if you are not happy with the location then why pull the trigger and buy a home?

It seems like it would be best for you to rent for a little bit more until you can save up some more and clear up some debt.

-Sean Dawes
0 votes Thank Flag Link Tue Jul 28, 2009
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