Is there anything decent I can get with my income and savings in Irvine?

[quote author="Geotpf" date=1239067083]Why does everybody care about how old a house is? The costs for any additional repairs are far overweighed by higher HOA fees, higher Mello Roos, and the "newness premium".</blockquote>


Old house built after 1970's house repair is 1% of house value.

Old house built between 1955-1970 house repair is 2.0% of house value.

Old house built between 1945-1955 house repair is 1.5% of house value.

Old house built between 1920-1945 house repair is 3.0% of house value.
 
You're getting some great advice here. And its good you're looking at the big picture in terms of what the real costs of owning RE is, e.g. Mello Roos, taxes, HOA fees, etc. Many people are blind to it. I don't see the huge appeal to living in Irvine, as I don't have kids, but it will be a while before you need to look into schools, etc. If you like the newness of the area (now that's what I can find appealing) why not look into Tustin or AV, or staying in LR? Or continue to rent, somewhere close to what you wanna buy so you can see if you like it or not. There are tons of people in your situation in Irvine keeping up with the Jones' who are now over their heads in mortgage payments, that's not fun to go through as a new couple, and adding kids to that equation doesn't always help things.
 
Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



As what Norcaljeff mentioned, renting a place in the area where you would eventually like to settle lets you "try it out" before you buy. You may end up not liking it, and hence would be doing yourself a favor by not buying there. In addition, you spend much less money on housing when you rent because you don't feel like you need to upgrade stuff since it ain't your own place.



Obviously,when prices get more realistic, then the equation changes. However, at least you'll be able to make those decisions with a more level head than acting impulsively.
 
[quote author="recovering_homeowner" date=1239074800]Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



As what Norcaljeff mentioned, renting a place in the area where you would eventually like to settle lets you "try it out" before you buy. You may end up not liking it, and hence would be doing yourself a favor by not buying there. In addition, you spend much less money on housing when you rent because you don't feel like you need to upgrade stuff since it ain't your own place.



Obviously,when prices get more realistic, then the equation changes. However, at least you'll be able to make those decisions with a more level head than acting impulsively.</blockquote>
You hit the nail on the head. Irvine is still overpriced in my opinion so this provides opportunities for many folks to rent before they buy because your rental dollar goes a lot further today than your purchase dollar goes. You don't know how nice it is not to have to worry about making a $4,000 semi-annual property tax payment or $300 HOA monthly payment.
 
[quote author="recovering_homeowner" date=1239074800]Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



As what Norcaljeff mentioned, renting a place in the area where you would eventually like to settle lets you "try it out" before you buy. You may end up not liking it, and hence would be doing yourself a favor by not buying there. In addition, you spend much less money on housing when you rent because you don't feel like you need to upgrade stuff since it ain't your own place.



Obviously,when prices get more realistic, then the equation changes. However, at least you'll be able to make those decisions with a more level head than acting impulsively.</blockquote>


how much is your rent in 3/3? where in Irvine? how many sq. ft?



Thinking of buying in the same place if prices come to where you want them?



Great advice, I have tried passing that on to some friends and family and many times it just falls to deaf ears......even when I show them some rentals on Craiglist!
 
[quote author="recovering_homeowner" date=1239074800]Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



</blockquote>


This is a great comment. Taking it a step further, it makes no difference to your future children whether their home is owned or leased --- as long as that home is safe and happy. Your children will notice if their parents are stressed out paying 40%+ of their income to maintain a depreciating asset much more than they would notice if their house is leased.
 
[quote author="recovering_homeowner" date=1239077080]Exactly...we pay about 2400/month for the 3/3 in westpark, and we're not very stressed. We can easily handle the rent on this even on one income.</blockquote>
That's awesome. Just to give you an idea...I was paying about $3,500 per month (mortgage, prop tax, HOA, Mello Roos) on a 3/3 attached 1,800/sf condo in Quail Hill. The new owner would be lucky if she could rent it out for $2,800 per month today.
 
Have you considered Lake Forest?



My advice: Make a down payment that you feel comfortable with. Forget what anyone else other than your parents tell you. How in the world could a bunch of folks who do not know you know what is best for you? I have noticed that whenever someone walks into a Jeana Keough open house, she asks the people a question, "Where do you live now?", and then immediately starts telling them what they should buy. I have no idea what to say to such a suggestion and just look at her dumbfounded. How can anyone be so arrogant as to think they know what someone else should do with their money and their life when they know next to nothing about them? In Jeana's case, she has not even been asked for her opinion. Anyways, we put down 59% on our last home. And we plan to put down 100% on our next. But, we do what works for us and that is usually 180 degrees opposite of what 95% of the home buying public does. My guess is that if we ever run into a situation in which we temporarily can not afford a owned home, we can borrow against the equity.
 
[quote author="CK" date=1239076686][quote author="recovering_homeowner" date=1239074800]Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



</blockquote>


This is a great comment. Taking it a step further, it makes no difference to your future children whether their home is owned or leased --- as long as that home is safe and happy. Your children will notice if their parents are stressed out paying 40%+ of their income to maintain a depreciating asset much more than they would notice if their house is leased.</blockquote>


Interestingly, my children who are still at home are 11 and 7 and the 11 year old definitely knows and feels the difference between owning and renting. She is embarrassed that we rent when most if not all of her friends live in owned homes. The more status conscious I see her become, the more I am glad we are renting so that she can learn some humility. Two of her friend's families have lost their home or are about to, and a few of her acquaintances are losing their homes or in a tough financial spot. My wife and I constantly impress upon our children how unimportant and temporary all this "stuff" is, but I am not sure they are getting it.
 
Scuba, it would probably make a lot of sense for you to work with a financial advisor/planner. Don't take everything he says for granted, but most likely you can get good advice from someone who will look in your situation more carefully than we can. You should certainly meet with a few of them before settling with one.
 
[quote author="awgee" date=1239078220][quote author="CK" date=1239076686][quote author="recovering_homeowner" date=1239074800]Take it from me as personal experience. Don't buy a place just because you just got married, plan to have kids and thinks it's the responsible thing to do. My wife and I bought a condo at the peak in 2005, and our entire 10% down payment when we sold it in 2007 (after accounting for upgrades, closing costs, etc.).



We rent a very nice bigger 3bed/3bath detached home now in Irvine for about what we were paying on that 2/2 upstairs condo unit, and we don't have to pay no stinkin' HOA fees, property tax and gardener since that's the landlord's problem. I wouldn't go out and rent an apartment sharing walls with neighbors. Yuck.



</blockquote>


This is a great comment. Taking it a step further, it makes no difference to your future children whether their home is owned or leased --- as long as that home is safe and happy. Your children will notice if their parents are stressed out paying 40%+ of their income to maintain a depreciating asset much more than they would notice if their house is leased.</blockquote>


Interestingly, my children who are still at home are 11 and 7 and the 11 year old definitely knows and feels the difference between owning and renting. She is embarrassed that we rent when most if not all of her friends live in owned homes. The more status conscious I see her become, the more I am glad we are renting so that she can learn some humility. Two of her friend's families have lost their home or are about to, and a few of her acquaintances are losing their homes or in a tough financial spot. My wife and I constantly impress upon our children how unimportant and temporary all this "stuff" is, but I am not sure they are getting it.</blockquote>
I think that is the by-product of their surroundings and environment. It's unfortunate that other kids can have a big influence on how other kids look having material things in their life. I'm just fortunate that I was raised by old school european parents that always remind me of who I am and where I came from because being humble and grounded in today's society is a true virtue. Your kids will learn, it just takes time and reinforcement.
 
Is everyone saying that someone making 140k (which is over the Irvine median) will never be able to afford a house in Irvine?
 
I think they are saying he can now if he wants (just a quick search on redfin brings up 17 SFR's under 500k) but right now it is a better deal to rent and he will be able to get a much better place and a much more comfortable payment if he waits longer.



He also stated he wanted to buy a home built 2000 or later which does change things a bit.
 
[quote author="24inIrvine" date=1239163640]I think they are saying he can now if he wants (just a quick search on redfin brings up 17 SFR's under 500k) but right now it is a better deal to rent and he will be able to get a much better place and a much more comfortable payment if he waits longer.



He also stated he wanted to buy a home built 2000 or later which does change things a bit.</blockquote>


Yea i was depressed at first because I thought 140K would be enough, but it just seems like Irvine is still overpriced according to what I'm reading. I did do a couple searches for houses built in 1995 and up and redfin did show a couple nice ones in Foothill Ranch (area I'm not too familiar with, but I believe is just as inland as Ladera Ranch w/ lower HOA and MR). I think I'm just gonna have to talk to the wifey and tell her to wait it out longer....
 
[quote author="halfnote19" date=1239163289]Is everyone saying that someone making 140k (which is over the Irvine median) will never be able to afford a house in Irvine?</blockquote>


There are several 3/2 townhomes in Woodbridge under $400k.



If you make $140k and want to buy a SFR in Irvine, it'd depend on how much down payment $ you have avail.



Life situation changes, rapidly and mercilessly. Last year, I was an analyst making $100k, looking to buy another property in Irvine in 2009 with a hefty down payment. Today, I'm unemployed and my mutual funds have lost more than 50% in value. If Irvine had an Asian style night market, you'd find me operating a push cart there selling spicy beef noodles at night. But alas, um... wait, wrong section.
 
[quote author="Roo" date=1239078961]Scuba, it would probably make a lot of sense for you to work with a financial advisor/planner. Don't take everything he says for granted, but most likely you can get good advice from someone who will look in your situation more carefully than we can. You should certainly meet with a few of them before settling with one.</blockquote>
Honestly, most financial advisors/planners are worthless because they try to milk you for whatever fees they can make off you (that's been my experience with them). There are good ones out though. The few things that I would use one would be for life insurance purposes and estate planning. I think he will be wasting money if he comfortable doing some of the legwork himself.
 
[quote author="bkshopr" date=1239069922][quote author="Geotpf" date=1239067083]Why does everybody care about how old a house is? The costs for any additional repairs are far overweighed by higher HOA fees, higher Mello Roos, and the "newness premium".</blockquote>


Old house built after 1970's house repair is 1% of house value.

Old house built between 1955-1970 house repair is 2.0% of house value.

Old house built between 1945-1955 house repair is 1.5% of house value.

Old house built between 1920-1945 house repair is 3.0% of house value.</blockquote>


Interesting that I'm looking (in Riverside) mostly at houses built between 1940 and 1960. Why are houses built between 1945 and 1955 have lower repair costs than those built afterwards? Is this a yearly average cost?



But back to Irvine, the difference in repairs from a home built when Bush was CIA director and when Bush was Vice President and one when Bush was President and one when the other Bush was President is minimal-1%.
 
[quote author="halfnote19" date=1239163289]Is everyone saying that someone making 140k (which is over the Irvine median) will never be able to afford a house in Irvine?</blockquote>


My wife and I are in a similar financial situation to the OP, with similar SFR preferences, and the reality of the quote above frustrates us to no end.



When we moved out here in 2004, we didn't buy because we weren't sure we would stay, and then watched home prices skyrocket to the point where only "creative" financing became an option...we chose to rent instead.



Prior to the bubble, Irvine was not "affordable", but it was certainly attainable to someone making just over $100k...and I am talking a nice SFR, not a stucco box packed in like sardines. If you take home prices from say 2000 or 2002, assume the bubble never happened, and factor in appreciation of say 8% a year (which is still pretty aggressive): home prices would still be 10% to 15% lower than current listing prices.



We recently started dipping our toe in the market, and the RE propaganda is out in full force. Some things realtors have told us of late:

- November was the bottom.

- Foreign investors will gobble up all of these bargains in "world renowned Irvine".

- Other parts of the OC will continue to drop, but not Irvine.

- Everyone wants Irvine schools.



If you look at the median income in Irvine and the median home price, there is still a huge disconnect. We understand that Irvine is desireable, but the sense of home appreciation entitlement in this city is ridiculous.



I read the Lansner blog daily, and the post that Irvine might now be a seller's market really blew me out of the water. I really hope the current spike is only a seasonal uptick.
 
[quote author="starbuck1975" date=1239233880]

I read the Lansner blog daily, and the post that Irvine might now be a seller's market really blew me out of the water.</blockquote>
If you read IHB daily... it will help even out that effect.



Irvine still has a ways to go it's just much slower than everywhere else.



Rents are dropping which is a good indicator and since people won't be able to fund their exotic mortgages with high rents... you'll see houses hit the market at lower prices.



I'm just not sure how low they can go... some claim we are at 2003 Irvine pricing but I think that's only for a few exceptions.
 
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