Will Never Afford a CA Home - Will Never Leave CA? (San Francisco: real estate, 2015)

[Kalika]

I lived in California for 10 years, have been on the east coast for 3, and am about to move back to CA next year, even though I will likely never be able to afford a home there (a condo at best). I have talked to many Californians who feel the same way...they live there despite the fact that they will likely never afford a home: short of a cash windfall or winning lottery ticket.

My question is...is this you? Are you one of the ones who are stuck with apartment living in CA but remain for the overall lifestyle or some other reason? What keeps you in CA despite the fact that you will never own CA real estate?

Do tell...we are all ears!

[Boompa]

Originally Posted by Kalika

I lived in California for 10 years, have been on the east coast for 3, and am about to move back to CA next year, even though I will likely never be able to afford a home there (a condo at best). I have talked to many Californians who feel the same way...they live there despite the fact that they will likely never afford a home: short of a cash windfall or winning lottery ticket.

My question is...is this you? Are you one of the ones who are stuck with apartment living in CA but remain for the overall lifestyle or some other reason? What keeps you in CA despite the fact that you will never own CA real estate?

Do tell...we are all ears!

I have moved back and forth from California (San Francisco) to Arizona for the past 20 years. I'm originally from Philly having grown up in the inner city in the 1950s. Living in the Outer Richmond District of San Francisco was the same as being back in the 1950s. No Super Markets, no WALMARTs, public transit etc. I love it there but have a need to own my house.

[Cupcake77]

I know someone in N california who feels this way. Cant afford their house, willing to risk losing it vs moving somewhere they can afford.

[jbunniii]

I stay here because I do think I'll be able to afford a house once the market is done correcting, i.e., I think prices will continue to drop significantly from their current levels.

One nice aspect of the downturn is that I was recently able to "graduate" from an apartment to a rental house for the same monthly rent, so that makes the living conditions much better.

I also like my job and employer, so I'm not itching to make a move at the moment, especially in the current job market.

My current plan is to evaluate the housing situation in 2012, and if a house is not easily within reach where I currently live (Silicon Valley), then plan B would be to move back to SoCal and buy there, if affordable.

By "affordable" I mean, take the pre-bubble mid-1990s price and adjust for inflation - I do NOT mean "mortgage just barely within my theoretical ability to pay" like many buyers resigned themselves to over the past few years. My goal is to own a house outright AND have ample cash when it comes to retire. That's not possible if you overspend on housing.

Plan C would be to move out of state to achieve the above-stated goal if I can't do it in coastal California.

[SOON2BNSURPRISE]

Maybe instead of looking at the cost of homes, maybe a need to increase the income is in order.

[Charles]

Originally Posted by jbunniii

My current plan is to evaluate the housing situation in 2012, and if a house is not easily within reach where I currently live (Silicon Valley), then plan B would be to move back to SoCal and buy there, if affordable.

By "affordable" I mean, take the pre-bubble mid-1990s price and adjust for inflation -

That means your talking close to double. What's inflation? 4%? 72/4 = 18, 18+1997 = 2015

[Ceece]

Owning a house isn't the goal for some people. It shouldn't be the goal of everyone anyway.

[MtnSurfer]

Originally Posted by Kalika

I lived in California for 10 years, have been on the east coast for 3, and am about to move back to CA next year, even though I will likely never be able to afford a home there (a condo at best). I have talked to many Californians who feel the same way...they live there despite the fact that they will likely never afford a home: short of a cash windfall or winning lottery ticket.

My question is...is this you? Are you one of the ones who are stuck with apartment living in CA but remain for the overall lifestyle or some other reason? What keeps you in CA despite the fact that you will never own CA real estate?

Do tell...we are all ears!

Yeah, its just a different perspective out here. For many Californians home ownership is a luxury. And not everyone can afford that luxury. It can also be a burden or even curse depending on one's situation - over extended. So while it is a nice to have its not necessarily a gotta have thing like other states with cheaper prices.

There is a sense amoung many that they can never be truly happy unless they own a home. But I don't see things this way. We sold our home in CO and are now leasing in CA. We will watch the market and possibly buy if a good opportunity arrises. But that is not a gotta have thing for us if prices remain too high. Happiness is not contigent on home ownership. We would much rather prefer to rent/lease in one of the nicest parts of the country than own somewhere else.

This same entitlement mentality is partly to blame for our current economic mortgage meltdown. Everyone likes to blame the banks for offering loans when they really shoudn't have. But these same ppl made a decisions to spend above and beyond their means just to buy a home. Thats just poor judgement IMO. Whats wrong with living frugally and buying only when it makes financial sense?

Derek

[Charles]

Originally Posted by MtnSurfer

But that is not a gotta have thing for us if prices remain too high.

Hypothetically, if housing in your desired location(s) doesn't fall any more than 10% in the next two years and after then begins linear appreciation at traditional rates (again hypothetically), would you rent forever?

Under what conditions would you buy? What happens if those conditions don't occur in the next five years?

What, in your mind, is the probability that you will rent forever?

[MtnSurfer]

Originally Posted by Charles

Hypothetically, if housing in your desired location(s) doesn't fall any more than 10% in the next two years and after then begins linear appreciation at traditional rates (again hypothetically), would you rent forever?

Under what conditions would you buy? What happens if those conditions don't occur in the next five years?

What, in your mind, is the probability that you will rent forever?

Hard to say really. Even though it is a possibility for us its not really something I stay up late at night thinking about thats for sure. We are leasing in an excellent area and enjoying it to the fullest. If prices drop enough in some of these areas we like then we might buy. But there are a lot of variables in the equation so I don't want to speculate too much. The main thing is that it makes good financial sense for us while still living within our means. The bottom line for us is that we focus on enjoying our lives here with our family and keep the place where we live in perspective. I don't want to live for a mortgage in some overextened way just to say I own this home. Its just not that important.

The whole idea of living frugally and less being more is a foreign concept for many Californians who prefer instant gratification <at any cost>. But I think after this latest meltdown some folks are starting to take stock and reevaluate their priorities. Sometimes unfortunately its takes a crisis to shake ppl up and out of the old way of thinking.

The bottom line really is that life can be fully enjoyed in CA or anywhere for that matter without owning a home. Its all a matter of perspective. Would it be nice? Sure. But is it necessary? Not really.

My 2c,

Derek