Over the weekend I went house-hunting with my parents (one of our favorite family outings – fun, free, and educational)!
We saw two places, and I realized here’s what $500K can buy in my little slice of Southern California:
- A townhouse ($495,000): The 3-bedroom, 2-bath, 3-car garage townhouse was new (built in 2007) and on a nice street, but we can already tell construction wasn’t up to par. The stone floor in the kitchen has already show several cracks, and the floor isn’t level.
- Single-family home ($500,000): The house had an irregular layout, with a couple of room extensions/additions. It was old. (So old, in fact, that the real estate flyer didn’t say what year it was built). It would take a lot of money to make the house comfortable. It was also a neighborhood eyesore.
I felt somewhat discouraged after looking at those places. Half-a-million apparently gets you… the above examples.
Good thing I won’t be planning to buy for several years – that will give me a chance to, ah, recalibrate my real estate expectations.
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And likewise in my little slice of SoCal!
The 3-bed, 2.5-bath, 1900 sq ft townhouse we rent in the very nice area that I live in sells for OVER $600K, according to Zillow. And that’s with the recent drop in real estate, with barely some renovations to the units (ie partial hardwood floor, new carpet but not new appliances or horrible bathroom counter replaced) from when the complex was built in 1988. And that’s one of the BEST units – ours is a dump compared to it!
Gah…
In my slice of SoCal, 500k gets you a 2 bedroom condo…
I’d prefer to live in a nice house in Orange County!
After this housing crisis, I’m very wary of home ownership. Just like the stock market, there are no guarantees. I used to believe the hype of the stock market, not anymore. I used to believe the hype of homeownership, not anymore. Sometimes the simplicity is thunderous, n’est pas?
Not surprised. I’m glad I don’t live in Cali!
It’s pretty much ridiculous everywhere, it seems. I’m in Alberta and the prices are just stupid up here too!
have you started saving for a down payment, even though buying a home is a few years away?
Don’t be offended, but I’m going to play devil’s advocate for a moment. At the very least it might make you feel less disgruntled:
Why do you want to buy? You are young and single! Are you *definitely* going to be where you are geographically for at least the next five years? Are you ready to own property forever and ever (if you can’t sell it)? Are you ready to fix everything yourself, and/or argue with the snotty board of your HOA to get something repaired or changed, and/or pay a lot of money to repair people over the next five decades?
Yes, you CAN do all of those things, of course, because you are an independent and confident young woman and you are careful with your money. But do you WANT to do all those things? Do you YEARN to spend so much time and money and be tied to something for the next 30 years?
Have you actually sat down and calculated what your monthly budget would look like with a mortgage and at least $200 of repairs and misc house purchases? Or an HOA fee, for a condo? How would your budget change if your property taxes go up (they always do)?
Think about alternatives. How much would you have after one year if you saved all of that money instead of spending it on a mortgage and repairs/fees every month? After two years? Five years? What ELSE could you do with that chunk of change? (Travel? Invest? Start your own business?)
I am not knocking homeownership or trying to crush your dream. I just wish someone had said these things to me (and I had listened and thought them through) before I bought my house. It’s like the difference between wanting to have a dog and actually adopting a puppy. I love my dog and I like my house, but the actual experience is very different from what i thought it would be!
Cheers,
KAD
(And yes, California real estate is ridiculous. In 2004, I bought a four-bedroom, 1900 square foot house, built about 100 years ago, with beautiful woodwork, central air, hardwood floors and a nice yard, in perfect move-in condition, on a nice street in my upstate New York town for $109K. Yes, you read that right.)
Over here in Los Angeles, $500K gets you a piece of crap in Inglewood. Inglewood peeps. Not exactly where anybody wants to live.
Move 2 Austin!!
Yikes. BF and I want to move to SoCal so bad, but it makes you think when you hear things like that. We live in the Midwest right now and in our city, you can get a really nice house in a good neighborhood for 200K or sometimes even much less. 500K will buy you a mansion. Seriously.
On the other hand, SoCal is paradise on earth, so…there’s the tradeoff.
I’m with Carolyn, this is one of the reasons I was motivated to come to UT Law/McCombs and consider living in Texas (even though SoCal is close to my heart, as it is to yours).
Sounds a lot like the D.C. metro area. Sigh.
Not sure where you are looking, but the eastside isn’t that bad. $500k will get you into Silverlake again, that wasn’t possible a year ago. In Alhambra prices are now in the $300 and $400k range, lots of dim sum! Or you could move to my area and pay $200k to $300k, but you gotta put up with some funk. The house next door closed at only $117k, so you can’t say all of LA is unreachable. I make that much in a year.
Hah! I hear that….I’ve come across some places in the city that have condo FEES of up to $1300/mo. – that’s not even including the mortgage. It’s all about what makes you happy though – it very well may for people
This sounds just like Silicon Valley. Sigh.
…and here’s to hoping i find a nice, cheap bank owned property in the next year or two. haha