Sunday, August 10, 2008

The search of our next "home, sweet home."

Zach spent some time yesterday driving through neighborhoods and getting an idea of where we may want to live when we move back. We're still trying to debate our choices-- apartment or house? Cheap, temporary apartment till we find something nicer, or splurge right off the bat? Pay to live in a cuter neighborhood within walking distance to one of our favorite farmers markets, or save what might be several hundred buckaroos a month and live in a slightly less cute location? Should we live closer to Zach's office for shorter commutes, or try to be close to other friends? Go for cheaper rent in hopes of saving up a down payment so we can buy in a couple years, or pay a bit more now and hold off on buying? Will 1-2 years from now even be a better time to buy or will prices still be declining at that point? Will we ever be able to find something we can afford there?

During the 3 years that we lived in California we had many many people telling us we should buy a house. The state mantra was "BUY BUY BUY even if you can't afford it just BUY already BECAUSE LOOK AT ALL THE MONEY YOU'LL MAKE!!!!" And for a while that was true. In those 3 years the average housing prices in Santa Clara went up something like 20% every year. Buying a house wasn't so much about making yourself a Home to live in with your family, but instead seemed to be more about making a financial investment. We looked into buying a condo that first year, but didn't for a couple of reasons: 1) our plan at the time was to live in California for 3-4 years, which to me seemed like not long enough to justify the headache and potential hassles of buying and then selling a house, and 2) Zach looked at the housing market and the prices, etc, and thought, "Um, this is nuts. There's no way it can keep up like this."

And I know it's a bit childish and petty of me, but I do feel a bit justified in seeing that he was right.

Many of our friends in the area bought houses, and while I;m sure the downturn isn't great for them it also doesn't seem like they're being that negatively affected by it. Which I'm glad-- I would hate to see any of them in trouble. But I'm also glad that we made the decisions we did, and that we didn't cave to all those people who told us we HAD to buy and were practically stupid for not doing so.

I don't see buying a house as an investment. To me, buying a house is about a Home. About deciding that This Is Where I Want to Live. We don't need anything very big, but we do want it to be attractive and inviting. And when we do buy, I'd like it to be a home we can see ourselves living in for years and years.

Buying in California is still more expensive than renting. Our tentative time-line right now is to maybe buy in 2+ years, depending on what's still going on with the market, our finances, our life situation, etc. Ultimately the decision of where we live next won't be made until we're back and actively looking and able to see what our options look like. There's the desire to save up and thus find a cheaper option, battling the desire to live in a cute neighborhood or opting to rent a house instead of an apartment. Part of me is dreading the search-- I'm sure touring rentals will be BREEZE with a 7 month old in tow! But part of me also can't wait to get started, excited to see where this next phase of our lives will take us.

4 comments:

  1. You were smart. I grew up in SoCal and saw the boom and bust cycle of real estate in the 80s/early 90s. I couldn't believe people seemed to have no recollection of that recently. All my siblings had bought property during the decline years of the 90s and so have been quite comfortable, but they looked around them at people paying 3-4x what they paid to buy in their neighborhood, and worried for them, knowing it was going to crash soon. Sure enough....

    You were smart to wait it out. Good luck on the house hunt!

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  2. Jackie7:20 AM

    If you get a chance to find a home near Zach's office then I say choose that. My husband had a long commute for the first 20 years of our marriage while our children were little. Just last year we moved to NC and he has a really short commute and it makes such a difference. He is less tired, he has a lot more time at home, he can be home at a moment's notice if he needs to be.

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  3. Dave Ramsey would be so proud of you two :)

    And I am too. All those BUY BUY BUYers did so in icky subprime mortgages with nothing down and adjustable rates. Better to go conservative in 15 year fixed rates.

    If you haven't yet, I encourage you to listen to the Dave Ramsey book, since house buying is a major financial decision. Even if you don't go for all his principles, it is another source of information

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  4. it was difficult for me at first to separate the idea of a Home versus A Good Investment. i think i've successfully been able to do so in my own mind, and now i'm in my 5th year of homeownership. the great thing about condos is very rarely do they lose value. yes, things in this area are overvalued/inflated, but most condos haven't dropped in the same steep way single family homes have. and the truth of the matter is (and i'm sure zach is seeing this) that rental rates are skyrocketing, which makes it a natural progression to homeownership (typically a condo) for folks looking to stop wasting money on rent.

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