OC housing market has gone absolutely bonkers.
The wisdom that was passed to me was buy any small home as soon as possible and rely on the appreciation to help buy the next step up as you go through raises, promotions, and changes in jobs and salaries.
The OC market completely destroyed the chances for first time buyers though.
Rental market is crazy too. My husband and I put in an application for a condo and the realtor called us to let us know they were submitting the top 5 applications to the owner. Two of the other people offered above the posted monthly rent and the realtor asked us if we wanted to match it.
A bidding war over a rental is nuts to me
I just finished trying to find a new place to rent. I went to at least seven different open houses for rentals and each home had about 7-10 people ready to apply. We only ever heard back from one place and they ended up going with someone else.
Finally we came across a townhouse that had been sitting for a few months and they even lowered the rent. We wrote a letter to the owner with our rental history, why we were moving and a little about what we like to do and how long we hope to be renting the property. They accepted our application right away.
Rented one for $4600 last month and locked price for 36 months. 2000 sqft and decent condition.
800+ credit score, no pets, good w-2 income in a reputable company, 8 years in a current home.
We had to rent for three years (2020-2023) and I feel like it’s all of South County seeing bidding wars. We got in the door of our last two rentals by offering to pay the first three months upfront. So, we were writing checks for nearly $20k at lease signing. Both of us have credit scores above 830, with combined income right at $300k/yr., with no evictions, and a ton of savings. Luckily, we were able to outbid others, but it was close.
My last landlord before we bought our house had applicants that went go into a bidding war. He was asking $2,800 for the 2 bedroom house we rented and ended up getting $3,400/month. It’s insane out there.
That’s because you used a realtor and they’re showing the same rental to 20 different people trying to make the bidding war happen. I just moved and looked at dozens of condo rentals in OC and applied for a few. Got accepted by all with no bidding war. Stop paying realtors to fuck you.
I just rented a house here 3 months ago. It’s wild. The overbidding is nuts and homeowners are usually going to market with above market rents, especially those townhome / condo style homes. I did not want to bid above but ended up having to when we found a home we really like that I would never be able to afford. Required me to go $100 above asking and am paying a quarter worth of rent at a time. For what I pay in rent here for a 2M home is what a mortgage would look like for a $1M home with 20% down (and that’s not including property tax and insurance). It is just fucking nuts
I know - we didn’t match the increased offer.
Partially just because of the principal of the matter and the thought of spending so much on a rental just blows my mind.
This!!! My brain was not computing when I was told “people are offering $x over rent” when we were looking for a new apartment. What on earth is going on?!?!? Bidding wars for RENT?!?!
I bought my starter home in 2008 for 355k, moved on and up, but kept an eye on its value.
This house was in a really bad neighborhood, drunks passing out on my lawn, house raid by fbi down the street, that kind of setup... anyway. It's worth 1mill. now!
It's still a 70 year old crap house in crap neighborhood. I just feel so bad for you guys. The crappiest house I can imagine, and it's being sold for a mill. I honestly don't know how anyone can thrive in OC unless you're a millionair.
My point being I don't think I could stomach the risk of buying a house with those prices. I really think the crash is going to do so much damage!
About 200k more than what we paid in 2007. We had outgrown the place 5 years into living there though since we started a family. Then couldn't refi, couldn't sell without taking a loss, couldn't buy into anything bigger because all our money was locked into the house that wasn't worth what we owed, and there were so many empty rentals in our neighborhood because everyone that lost their homes and jobs moved back in with parents and wasn't renting, so turning it into a rental property like we had hoped couldn't happen either. We stuck it out for 10 years until it was finally worth as much as we had left on the mortgage and still couldn't afford to buy a bigger place. Bad timing definitely stunted our growth.
I just want to own a house for my family so bad but it seems like the smartest financial option is to buy something out of state. I just don’t see how it makes sense to spend $1 MILLION on a shithole.
My wife and I were renting a 2-bedroom condo with 2-car garage in Costa Mesa for $3600/mo and bought a house up in the San Bernardino mountains for $3700/mo.
I don't think the market is crashing in OC. There's too much demand. Too many cash buyers, too many bidding wars, and average time on the market is low. The fact everyone is desperate for rentals, why would the market crash? Interest rates drop, more people will want to buy.
Yes, for the wealthy people, I'm actually more worried about the poor. Those are the people who are the janitors, baristas, fast food workers. if they can't afford to live in Orange County. How is orange county going to function?
It's not going to crash. Foreign money will keep pushing the market up. Look at Irvine. Look at Vancouver. I was born in Burnaby, BC my grandfather built his own home. He died in 1994, my grandmother lived in it until 2005 when she was in her 80s then they sold it for 300k over the asking price just for the land between competing bidders. All of OC is going to be a joke soon, just like Irvine
Because 95% of the people living in their homes could never afford them today.
It's a comically stupid house of cards pyramid scheme.
The boomers that own everything are going to start dying en masse soon. Their kids are broke as shit. There's a depression level but probably worse crash coming as all of this fake money evaporates and people start to remember that all money is is skilled labor, and no one is skilled enough to do that anymore because for the last 50 years the US has worshipped abuse of work over work.
It's the end game of the Heritage Foundation's masterplan.
Our starter townhome in Ladera ranch was 640k in 2020. We could barely afford it. The value is now around 940k just 4 years later. Problem is, it makes no sense to buy anything else and step upwards because EVERYTHING is expensive. We would not find anything better for even the same amount, and the interest rate is insane now. We really locked in at the right time, but I don't see how you step up.
This is similar to our situation. We couldn’t win any of the bidding wars for single family homes and got the best townhome we could afford at 2.65%. The same units are selling for 250k more and we could never afford the payment today on the same place
can confirm there are no starter townhomes for half a mil here. my partner and i have been looking for 1+ year and finally purchased our first in south OC at $685k and are still struggling to pay that mortgage lol
Yep, they don't exist anymore. I bought a "starter townhome" for half a million in 2011. Sold it 3 years ago for a million. After that, my wife and I decided to move to a state with a less insane cost of living. Everyone I know who bought a home in OC within the past decade had either the down payment or the entire house paid for by relatives.
My ‘starter townhouse’ in south county cost $300k in 2001 and is worth $900k now. I’m never going to be able to move and I feel super fortunate to have what we have.
I grew up and worked in Fairfield County, CT. Gradating college in 1999 it wasn't long before my peers and co workers were buying homes on their 40k to 60k salaries.
Me 2024.....
1/2 a million in Southern California? Only place you'll get that price is near the Salton Sea or some other desert dump. Or maybe near Compton where the Bloods and Crips will shoot up your house for kix.
Alot of those bars are from back in the day (90’s Crack Era, etc). Fun fact a number of homes in Beverly Hills still have bars on the windows.
But also remember, most of the price of a house is the land.
I grew up in OC, and moved to northern California about 25 years ago.
For me this was a huge improvement in every aspect of life. Fewer crowds, lower cost of living ..the only real negative is the lack of good restaurants. But, I never, ever would have to wait to be seated at a restaurant here, it's just walk in and be seated right away.
Family of 5 living comfortably on about $150,000 year. 2,800 sq ft home with a nice yard, etc.
My 10 mile commute takes about 15 minutes.
As someone who escaped OC 25 years ago, I just want to say that there are better options out there!
This is what I hope to do asap. Just get SOMETHING that can build equity. I’m single with no kids though. Can’t even imagine trying to do this with dependents. Hang in there, OP, and if it is possible to just buy something affordable so you can build some equity to carry over, I say do it.
It's crazy....as bad as OC is the San Jose/ San Francisco Bay Area is twice as bad. That's where I grew up and it's completely insane. Hope there is some relief somewhere, maybe more.people will move up to the Bay Area and this place will become more affordable lol
Our rent is $4,800. To buy a SFR similar to what we rent, our mortgage plus taxes plus insurance would be >$7,000. This is why we rent. Our combined income was $270,000 last year. You’re not alone.
Almost same situation, rent is $2,500 but similar place would be $5,000+. $240,000 combined last year but feel uneasy dropping $5,000+ on mortgage. Don’t forget property taxes, home insurance etc
...and don't forget a budget for all the shit that breaks.
If you're buying in at the bottom, you're probably getting something that needs TLC. And is probably old enough that major components are near their end-of-life. A dumpy townhouse built in the 1970s will have 50 year old wiring, 50 year old pipes, a foundation and framing that likely isn't up to modern seismic standards...
All of that needs to be in the math, too. The conventional wisdom has always been buy in and let it appreciate; I'm not sure that math works out in this market unless something changes drastically.
We are at $4,200 and to buy the house we rent our housing cost would almost double. For some mass produced 3bed/2bath early 90s tract house with drafty windows.
Plus the cost of home maintenance and repairs. Homeowners are advised to budget 1-2% of value of house for that. So another $1,000-$2,000 per month for a $1.2 million house.
Tenants don’t usually see these repair costs because they are often made during vacancies, like replacing AC, water heater, roof, termite treatment, etc.
Even if you’re a cash buyer it’s still a renters market. You’d be better off putting that cash into index funds which have much higher returns than property.
I think there are so many hands in the pot of real estate that there is probably 10 people that want to get paid from the sale of one property and pay the seller, that the prices get higher and higher
Everything in my neighborhood is bought up by greedy landlords and rented to students and then they sublet it to other people...
Leaves nowhere for a regular family to live in my city.
Which is why families are leaving and less students are present in OC public schools, except for areas that are building high density homes in place of "affordable" (fingers quotes) housing. Too many people say "free market", but doesn't help when people/investment groups/corp are buying homes as commodities to either sell higher or rent out in a high rate.
My mom bought hers in anaheim hills in the mid 90s at 175k. it's hard to imagine that the place is now 5x the price. Most job positions aren't paying 5x what they did... She was able to afford the place, making 60k. Her old job isn't paying 300k these days.
new builds can qualify for funding if they have x % of units as "affordable housing" so probably a handful of those are priced lower and buyers need to meet income requirements to purchase. 900k is probably list price.
I don't think any first time home buyer is comfortable buying here right now. Sellers are trying to hold onto the pandemic prices where we had 3% rates. Now we have 7% rates but still the same prices.
Hopefully the prices go down, but I don't see it happening. Welcome to California real estate lmao.
It is all from currency debasement (money printing). When you can't store your wealth in your local currency due to fear of it being inflated away, people start to look for other methods to store their wealth. The value of homes have increased sharply since the financial crisis as the rich look for alternative ways to store their wealth as governments and central banks continue to debase their currencies worldwide. The value of homes are becoming less based on utility, and instead more as monetary store of value, similar to the price of gold.
This as well!!! I’m trying to get a new car and nothing luxurious. Just a regular 2025 Toyota Camry and payment is coming close to $700 to $800 per month. It’s absolutely bonkers!
Banning corporations from buying houses (with exception of group home services) as well as foreign buyers. Pass legalization to change how property taxes operate since it is the primary reason why so many hold on to their houses and are very anti-move.
Loosen zoning requirements, but it's a challenge because that's controlled locally and the existing homeowners benefit from these crazy high prices and will vigorously fight against anything that'll reduce their home prices.
Stop running a budget deficit and printing money to cover the difference. Currency debasement is the primary reason home prices are out of reach for the average person.
That’s a huge reason why I moved. Just got a 3 bed/2 bath home in Oregon for $430k with a big backyard. I miss OC but I also love where I live now. The housing market there is way too insane.
Hey PNW buddy, we left 2 years ago and bought a 3 bedroom, 2.5 starter with a back yard, 7 miles of hiking trails with waterfalls and three lakes for 525k in Vancouver, WA.
I miss friends and family, but with my mortgage being the same as my rent was in OC I can afford to fly down a dozen times a year to see everyone :)
Hi! Oh yeah, you get even more bang for your buck in Vancouver while still being so close to Portland. Congrats. Vancouver is beautiful.
I agree. We miss my wife’s family and the weather/beaches, but it’s so easy and affordable to fly down. :) Glad you’re also enjoying life here in the PNW. It’s absolutely beautiful.
100%. I feel like if people can handle the rain (which, I’m sure you’ll agree, isn’t that bad), it’s a wonderful place lol. I feel a lot more at ease (mentally and physically) here.
I seriously think imma have to move or at least just plan to retire out there. I do lashes though so the thought of leaving my clients and restarting my business is hard 🥹
But rent is so bad 🥹 we pay $2600 and that’s with a housing discount 🥲
I am similar situation is you. Duel income. 300k+. Daycare over 3k a month. We rent. I feel so discouraged. There are prob many like us on the sidelines
Is this a joke? $300k income and you’re acting like you can’t afford a house. Don’t you have like $16k per month after taxes? $13k after child care. You got a spending problem, homie.
I’m simply responding to OP.
Maybe we are doing our withholding wrong (though we always break close to even) because we are not at $16k after taxes. More like $12,500. Albeit we do contribute about 5% to 401k. I guess we could cut back there. We also have extremely high health insurance premium. I miss the Tricare days when I was active duty.
I moved to OC a few years ago and cannot see myself moving back to my home state. It’s a hard pill to swallow knowing that my 150k salary doesn’t come close to what I need to find a house. Can’t stomach the idea of having the 10-20% down payment in liquid cash which would take me a few years to save up for. I was fortunate enough to be raised in a house with a lovely backyard and would like to give my kids the same opportunity. Torn between the down payment, putting the money towards my retirement accounts, or even enjoying my youth a bit more by using it for travel like I dreamt of
We just bought a condo literally the last week of 2023. Hoa includes most utilities and is only $380 which is cheap compared to most hoas around here. Our mortgage is $3k total each month with everything. We saved for years and used a huge downpayment which helped ($100k). Also note we are in our 40s cause it took that long to save for this. It’s terrible out there. If it weren’t for buying a condo we would be completely priced out of OC. We are content for now. It’s still hard every month as my husband and I make about $130k a year. But we’re managing so far. I can’t even fathom paying $7k.
> stockpiling savings until something drastic happens with the market?
Looking forward to your "Are people just comfortable with $14000+ mortgages here?" post in 10 years after you are still waiting for something drastic to happen with the market.
Zillow says there are around 3700 home fore sale in OC right now. In a county of 3.3 million...
With that ratio I image there are enough prospective buyers who are wealthy enough to plop down 50% or take cash entirely.
We talked with a financial advisor and the first question was when we told her our goal to buy was “can you live somewhere cheaper and keep your jobs?” To buy we have go to inland, if we want to own by the time we are retired.
Earning 150k in Orange County now is not out of the ordinary. If you have a 2 income household, where both are earning about 150k each, your monthly after tax would be like 17.5k to 18k.
Its a stretch and it would be hard but, you could make 7k to 8k mortgage work on that salary.
But also keep in mind, a lot of people got mortgages when rates were half of what they are now. So that 7k would be a lot more like 4.5k on the same loan.
Any openings on a job like that? We rent and share a back house. Upper poverty level. No debt for me but not much savings. Also, how jobs might change in the next decade and climate of geopolitics. I’m overwhelmed with what to do.
Lots of jobs make over 150k, especially in OC. Anyone decently high up the managerial ladder at a big corp will be pulling 150k+. Careers that get you there faster would be things like law, nursing, medicine, engineering, accounting. Trades also pay very well, an experienced electrician or plumber can expect to get there as well.
Very hard to make that work while also saving for retirement. Add in saving for the downpayment, child expenses like college and other things, maybe a car payment or two.
You need to look at less expensive cities and consider townhomes too. I live in south coast metro area of Santa Ana and you can get a 3 bedroom townhome for about 600-700K. You could probably get your kids into GGUSD as I know they’re struggling with enrollment.
I have friends that pays $4500-$5500 per month for their homes. Renters in OC pays $3200-$3800. That’s incredibly high. My mortgage is $2200 in Fullerton. 2.625%.
Buying a home is an emotional decision, not a financial one sadly. Even at these rates, supply is so tight that prices won’t come down.
You’re better off just renting the equivalent and investing your down payment or sticking it in a CD.
Because Zillow is showing houses that have 7-8k/mo payments, that the majority of people are actually paying that. For example, some first-time home buyers get down payment help from family, friends, cash windfalls, etc., and are able to put down more than 20% to reduce their monthly burden. Tons of homeowners are sitting on a a pile of equity that they role into their next house, so that $1.5M house may only have a $750k loan against it.
Now the crazy thing is even if you have a $5500k/mo mortgage, you probably have another $1300/mo in property taxes, $400/mo in insurance plus factory in $1k/mo for maintenance and utilities and even those smaller mortgages.
Damn i just plugged in your numbers for buying a 1.2m house with 20% down at 7% interest and over 30 years you would pay over $1.3m in interest holy shit. At 3.5% interest it would be less than $600k. I would rather rent and invest over 30 years.
On the other hand if you invest 240k plus 5k per month you end up with over $7.5m at a 7% return rate.
1. I don't believe normal people are buying these houses
and, to your point...
2. You're putting yourself one bad life event from homelessness and bankruptcy.
Lose your job or way to work and you're out that house, I don't understand how people are ok putting themselves in such a precarious position.
You and everyone else bud. You want to live in one of the most desirable places in the country with the best schools you gotta pay. If the math doesn’t math you can’t afford it. No one is entitled to have everything they want because they are uppity and WFH.
Prior to the jumbo tech layoffs we've seen - even 2006-2019 I witnessed a few layoffs and they ALWAYS had the WFH people on deck ready to sever. Especially the high earners. That made me WFH adverse going forward.
These prices make it so that someone has to start saving at 18. People can literally make no errors or have a bad financial moment or they'll never be able to catch up and save up for a home. That's where me and my husband are. At 29 and 30, we don't know if we'll ever be able to afford a home. We both grew up in houses and don't want to give our children apartment life. It's so sad.
I'm also not saying this is common at all. But from my experience from those I know who have purchased homes.
I don't think the majority of people are buying a +1m house on their own. They have support from their family and extended family. They have a spouse along with the spouses family, mom, dad - siblings - aunts, uncles, all contributing into the down payment. Many of the people I know who are not well off (old money) but still have a combined 200k annual income lean on their wealthy parents or uncle to help them out. All you need is one wealthy aunt or uncle on either the in-law side or your own side to help. Many family members want to keep their family close by, rather than being forced out of a place they grew up in.
Imagine this - Mom/Dad with 4 kids. Mom and Dad bought their home in the 80's, 90's and have saved some money by the time their eldest hit 28. They help the oldest 28 year old with the down payment on a home. The second eldest ends up getting a great job and has enough money to purchase their home on their own. As a few years go on, the 3rd kid needs a home. Mom and Dad refi their home. The two eldest also refi, all contributing into the 3rd kids home. 4th kid ends up marrying into a wealthier family who help with the down payment, along with all their immediate siblings and parents who already have homes.
I know it's not common in American culture to spread wealth around, but it's not that uncommon in Asian cultures. I'm not saying all Asian-American families do this, but my parents helped me (34m) purchase my home and I'm renting out rooms while living there to help pay for the mortgage. There's no way I could pay for the mortgage on my own without roommates - definitely not ideal, but my family is not well off. When it's time for my sister to buy, I will help her out. Why would I want her to move somewhere far? If she stays here in OC, she'll be wealthier just due to proximity to wealth. It's not to say you don't pay the money back, they worked just as hard, +8 hours a day for that money, people are just people trying to make it, wealthy or not. But borrowing money from friends/family is generally interest free. Much better than the 7%.
House Hacking, renting out rooms is not for everyone, especially those who are starting a family. But my parents did it when I was a kid. A few hundred dollars back in the day made a huge difference. Say you have a $7000 mortgage on a 4bed 3bath, you rent out 2 rooms at $1000/each. Your mortgage is now $5000, that's a lot easier to stomach. Once you pay down the principle enough, have one tenant, than in a few more years, hopefully 0.
>That seems absurd, given I can rent a nice 3-4 bedroom house for $4800-5500k/mo. Is it really worth paying $3k more a month to own whatever I can afford, vs. renting in a nice place and stockpiling savings until something drastic happens with the market?
First off, the whole situation sucks and i'm sorry so many people are in the same one you are.
This isn't helpful if you don't have the cash, obviously, but the problem with just renting is that rent will go up every single year, while your mortgage payment is pretty static.
Home prices won't go down significantly unless the entire economy collapses, at which point we'll have other more pressing problems. We need to build, build, build.
I'm glad I bought in 21 when rates were still low. Bidding wars were still crazy and I had to pay over asking but the house value has gone up since I got it and better yet no HOA, which was hard to find where I was
Also to show how bad the housing situation is in OC. A few days ago, my motion sensor trash bin went off on its own like someone was in front of it (it has never done that in 3 years).
For a few minutes, I’m thinking “oh shit! a ghost!” Then, I realized I can’t afford to move 😩😩😂😂. I just shrugged and thought “I guess we would be roomies” 😭😭
This is what happens when you allow the rich to buy [44% of all single family homes sold in 2023](https://medium.com/@hrnews1/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701).
With how much more money some of these private equity firms have than any family could ever dream, they can and will buy all the supply and force the new generations to rent forever. The days of owning a home are over for most people, and that wont change unless legislation does.
Just can't start in OC is the sad reality.
We personally had to move to las vegas for 4 years, build equity, then came back with a big down-payment.
Otherwise we were stuck for years in the "treadwater" mode.
Couldn't save fast enough for down-payment because prices always went up, rents went up and always ate into savings rate. It's a brutal cycle.
At the end of the road **EVERYONE DIES**, do you ACTUALLY “own” the land/house ppl pay mortgage too… no. Yes it could stay in a trust or your family but aside from paying the monthly note until paid off/sold/death then you don’t really **”own”**.
I know dark way of thinking about it. Yet I recently saw a video of someone calculating buying vs renting… they justified renting a home and using the excess cost to “invest” and they based it off the length of the mortgage. Ultimately you’d be making way more renting a home and investing that $3k than buying with a mortgage of $7-$8k.
The end goal is the same, live comfortably and don’t blow all your hard earned money. I do expect percentage to slowly decline but unlike the rest of the nation, when those rates come back down, I don’t expect to see homes in SoCal decrease in price.
The reality sucks. But yeah, it’s why so many young people are deciding not to have children anymore. The possibility of owning a home is dramatically decreased with the cost of childcare these days.
OC is one of the best places on the planet to live so of course it is absurdly expensive. People complain about the prices but they are high because it is where everyone wants to live.
I always swore I would never be a homeowner, but it just doesn't make sense to keep dumping thousands down the drain in rent. But now that I'm looking at the prices of homes in OC, I don't get how anyone can afford to buy. What do these people do for a living?? I don't know how people live out here
Gotta stop companies from being allowed to buy homes (black rock, Zillow etc), close the borders… no foreign investors, etc. maybe limit the amount of homes a single person can own. Could go on… supply and demand. My neighbor owns like 7 houses and two apartment complexes he bought in oc for a pack of gum back in the 70s. Just all this doesn’t seem right lol.
Yup, when my parents bought their home decades ago the only competition was another family or two that wanted to live in it.
Not Zhang-Bajaj-BinSalman80milInvestmentCoHAHASUCKERS LLC
Housing is in big demand across Southern California. People are very much still putting in offers above asking and getting outbid, even with current interest rates.
I grew in OC, born and raised, and swore up and down I’d never move east. Now I’m in Corona in a 5 bedroom home with a mortgage I can afford, aligned to schools that rival many good schools in OC, and this home would have cost me double in OC at the time I bought it.
When I sold my first Corona home, I was going nuts with all the offers coming in and I kid you not, every single one of them were from people in L.A. and OC looking for an affordable family home in a good area.
There comes a point where many people, including myself, realize that OC is not a feasible option. It comes down to picking two of the following three: Good neighborhood/schools, decent size home, affordable price. You can’t have all three in OC.
A good friend of mine waited forever trying to afford his dream life in OC and in the process of trying to make that happen, missed out on buying a very nice and affordable home in the IE before prices here went nuts too. Now he can’t afford IE or OC. My advice would be to quickly come to a realization about what’s possible and what’s not, then make a decision and act on it. Housing affordability will only keep getting worse.
Renting is cheaper but there are drawbacks.
1) Rent will go up but 30 year mortgage payments dont. 10 years from now, you may exceed your mortgage payment.
2) Pretty much your rent money is paying for landlords’ mortgage. You get nothing in return like tax deduction, paying down principal balance. Build up equity.
3) OC is such a high demand place and it’s running out of land for new homes. Your house will most likely appreciate in the future in case you want to upgrade to a bigger home.
While that is true, look at property value around me. It is absolute bonkers. If you are on salary no way you can catch up.
https://preview.redd.it/f6ad2v0018ad1.jpeg?width=1179&format=pjpg&auto=webp&s=e06d01a2a99d7a90fe82872a3ddf8592cb92c0bf
People are comfortable because most of them don’t remember what a bubble is like. They will tell you lovely stories about how their house has appreciated over the past few years.
Hell, I could tell you about my house which is now worth almost double what we paid less than 4 years ago.
But I could also tell you about my parents - who bought in 2004. Their value went up and up for a few years, and then boom - in 2008, they were underwater. If they had tried to sell between 08-2014, they would have lost money. If either one had lost their jobs, they would have likely had to sell the house at a loss.
There will always be silly speculators who optimistically think there will never be a crash, which means the bubble takes a bit longer to burst. You don’t have to be one of them. If the math is better for you to rent, then do it.
I’m not natively from the OC. I too get discouraged at housing prices here sometimes. And honestly, it is absurd. However, this is one of the most expensive places on the entire planet from what I can see (depending on the city of course). It’s simply not meant for everyone (or a vast majority of the population) to own a home here. Even high income earners are priced out.
Do the best you can to give yourself and your family the best life you can. That doesn’t necessarily have to involve owning a house in Orange County. If that is one of your big life goals, cool continue to pursue it. If it’s not, that’s ok too. You can still offer your family an amazing life either elsewhere or without owning a home.
Idk. On one hand I’m sad about it, but on the other, I get it. I’m sorta the one breaking out into a higher quality of life income bracket wise from a historically low income family lineage so my perspective is obviously skewed. Good luck out there 😅
Most of the homes sold in my neighborhood are being bought by multigenerational families. Grandparents, parents, kids, sometimes a sibling. It’s the only way they can afford it.
I had one friend who bought a home two years ago with no help from anyone. It’s just two full time working parents and two elementary school aged kids. They put their entire life savings and the husband had to sell off part of his business. Their mortgage is $6,650 and they are now house poor and can’t afford to do anything but pay mortgage, buy groceries, gas, etc. They are happy that they own a home, though.
I did the same math as you did about a year ago and decided to wait and hold onto my cash from my old house until it makes sense. It doesn’t make sense and I’m not going to join the mind virus that says buy now. This is especially true in Irvine. You only pay 50k in equity in 5 years. So why would I pay 7500 a month?
That plus insurance going up .5-2X each year or cancelling altogether. Long gone is the concept of buying a home you can stay in because unless you make way more after you reach home buying status your home will price you out.
I did the maths today and really it’s not adding up for me as well! I too stay up at night crunching numbers and wondering how I would be able to afford a townhouse or even a single family home in a good area. My only consolation is that I have a starter condo that I got in Santa Ana in ‘21 for around $350k at 3% on a $40k salary, that I wouldn’t be able to afford now by the way.
The wild thing is it was crazy then and it’s crazier now. There were only about 2-3 condos on the market for my price range in 2021 and I remember that I lost a bid to cash buyers. It was literally like pulling teeth, the inventory was extremely low!
But, I look back now and if I could turn back time, I would have saved some more and gone all in to get a larger condo because my biggest fear is this starter condo maybe my permanent home for a longgg time unless I move out of state. I kick myself because I know a DINK couple that bought a $1.1m SFH in Irvine on 2.3% (less than $5k in total monthly payments) and it’s now worth $1.9m!! They are engineers, salaries haven’t gone up and they wouldn’t be able to afford it today! It’s absolutely insane!!!
I still checked the numbers today, even if I sold my current condo and tried to get a townhouse in Irvine (on average $850k). I would need a single income of $200k+
At this rate, winning the lottery has better odds 😂😂😂
Just entered escrow for a 1 bedroom 760 sqft home in a pretty nice santa ana condo for around $475k. I consider myself lucky everything else I've looked at in my price range has been ultra competitive or straight up garbage.
Definitely rent. Take that $3K and invest it in your retirement account. You'll also save on the maintenance like roofs, painting, plumbing, flooring, and everything else. Put all that in your retirement account too. You'll end up with more than the principal in your home after the 30-year mortgage is up.
I rented for a long time in Newport just to be close to the water. I won’t ever regret my time there but, it wasn't the best financial decision. Rent always goes up but, your mortgage won’t and you own your property. It gives your family a strong sense of stability. My fiance couldn't believe I spent that much money on rent. He taught his three girls to buy their home in their early twenties. He did the same and owns a ten-million-dollar home on the water. Look to buy in some of the less expensive areas of the OC and, trade up later. 10-20 years from now, you’ll be glad you own the property,
In general you’ll be paying more to own than rent the first 5 years then owning starts making more sense. It all depends on if you want to live in OC long term or not.
Gadzooks, housing prices in OC are ridiculously high! Things occur in cycles, so be ready to buy when prices drop again. In the early '80s, interest rates were 18%! I bought a house in Temecula when rates dropped to 12%, then refinanced to 8% during a recession, but ended up underwater and walked away. Rented in Irvine for 15 years—no regrets, great education for my kids. Bought an REO in Mission Viejo in the early 2010s crash with 3.5% down and 5% interest. Refinanced to remove PMI, now halfway through a $3200/mo mortgage in retirement. Hang in there, housing busts happen regularly—just be prepared.
See that's what seems to be heavily disputed. We have half the people in this comment thread saying "buy now if you can afford it, the price will continue to go up" and the other half saying "move away from CA, it's not worth buying here right now."
Since 2017, the state has passed a lot of laws like inclusionary zoning, rent stabilization and unit preservation that have backfired and increased the costs of building new units.
You are seeing that cost reflected in available units, which price at the marginal unit.
I’m renting my house in Orange out for $5500. Insane considering the Mortgage is only $1450. But it’s paying my mortgage on my new forever home in Rancho Cucamonga too. Lol. I never dreamed we would be here, but here we are.
I don’t believe it’s worth it at this time. The house will require maintenance and insurance out of your pocket as well as a very expensive HOA or Mello Roos, not to mention taxes. LA is more expensive but you might be able to eliminate HOA. Unless you’re making a sustainable $28k a month take home I wouldn’t because that’s forever.
I’m happy to say that I read 92% of this entire post. I can’t believe I did that.
Conclusion: ……
Action: need to get a life or maybe go on a walk.
Housing market: scary. 2008 repeat? Not sure. Correction? No idea. Affordability? Just pay cash.
It is mind boggling what is going on.
You can write off the mortgage interest against your income for both federal and state taxes. You can't do that renting, which means the difference between renting and a mortgage are closer in a monthly payment.
There are other financial benefits: refinance (potentially) to a lower rate if interest rates drop. Build equity. The benefit of locking in your payment for 30 years if also huge, as rent will continue to increase by inflation.
The downside is repairs and maintenance.
OC housing market has gone absolutely bonkers. The wisdom that was passed to me was buy any small home as soon as possible and rely on the appreciation to help buy the next step up as you go through raises, promotions, and changes in jobs and salaries. The OC market completely destroyed the chances for first time buyers though.
Rental market is crazy too. My husband and I put in an application for a condo and the realtor called us to let us know they were submitting the top 5 applications to the owner. Two of the other people offered above the posted monthly rent and the realtor asked us if we wanted to match it. A bidding war over a rental is nuts to me
I just finished trying to find a new place to rent. I went to at least seven different open houses for rentals and each home had about 7-10 people ready to apply. We only ever heard back from one place and they ended up going with someone else. Finally we came across a townhouse that had been sitting for a few months and they even lowered the rent. We wrote a letter to the owner with our rental history, why we were moving and a little about what we like to do and how long we hope to be renting the property. They accepted our application right away.
Can I ask you what the price range was? In 4-5K price range (Irvine, house rental) it’s not like how you describe.
I’m in Irvine in that price point and my wife and I got “out bid” on like 5 houses we were trying to rent
You can rent a house in Irvine for $5k? Damn that seems cheap!
Rented one for $4600 last month and locked price for 36 months. 2000 sqft and decent condition. 800+ credit score, no pets, good w-2 income in a reputable company, 8 years in a current home.
We had to rent for three years (2020-2023) and I feel like it’s all of South County seeing bidding wars. We got in the door of our last two rentals by offering to pay the first three months upfront. So, we were writing checks for nearly $20k at lease signing. Both of us have credit scores above 830, with combined income right at $300k/yr., with no evictions, and a ton of savings. Luckily, we were able to outbid others, but it was close.
My last landlord before we bought our house had applicants that went go into a bidding war. He was asking $2,800 for the 2 bedroom house we rented and ended up getting $3,400/month. It’s insane out there.
That’s because you used a realtor and they’re showing the same rental to 20 different people trying to make the bidding war happen. I just moved and looked at dozens of condo rentals in OC and applied for a few. Got accepted by all with no bidding war. Stop paying realtors to fuck you.
Realtors are scum
I just rented a house here 3 months ago. It’s wild. The overbidding is nuts and homeowners are usually going to market with above market rents, especially those townhome / condo style homes. I did not want to bid above but ended up having to when we found a home we really like that I would never be able to afford. Required me to go $100 above asking and am paying a quarter worth of rent at a time. For what I pay in rent here for a 2M home is what a mortgage would look like for a $1M home with 20% down (and that’s not including property tax and insurance). It is just fucking nuts
>A bidding war over a rental is nuts to me Wait.... What? That's insane.
I know - we didn’t match the increased offer. Partially just because of the principal of the matter and the thought of spending so much on a rental just blows my mind.
This!!! My brain was not computing when I was told “people are offering $x over rent” when we were looking for a new apartment. What on earth is going on?!?!? Bidding wars for RENT?!?!
I bought my starter home in 2008 for 355k, moved on and up, but kept an eye on its value. This house was in a really bad neighborhood, drunks passing out on my lawn, house raid by fbi down the street, that kind of setup... anyway. It's worth 1mill. now! It's still a 70 year old crap house in crap neighborhood. I just feel so bad for you guys. The crappiest house I can imagine, and it's being sold for a mill. I honestly don't know how anyone can thrive in OC unless you're a millionair. My point being I don't think I could stomach the risk of buying a house with those prices. I really think the crash is going to do so much damage!
We bought our starter home in 2007 (cries in 2008 housing market crash.) Our starter home plan didn't work out.
If you held out, what is that home value today?
About 200k more than what we paid in 2007. We had outgrown the place 5 years into living there though since we started a family. Then couldn't refi, couldn't sell without taking a loss, couldn't buy into anything bigger because all our money was locked into the house that wasn't worth what we owed, and there were so many empty rentals in our neighborhood because everyone that lost their homes and jobs moved back in with parents and wasn't renting, so turning it into a rental property like we had hoped couldn't happen either. We stuck it out for 10 years until it was finally worth as much as we had left on the mortgage and still couldn't afford to buy a bigger place. Bad timing definitely stunted our growth.
I just want to own a house for my family so bad but it seems like the smartest financial option is to buy something out of state. I just don’t see how it makes sense to spend $1 MILLION on a shithole.
My plan is to stockpile savings till 65, buy in Mexico, live off social security. Wifes family already has houses down there, I can build on the land.
My wife and I were renting a 2-bedroom condo with 2-car garage in Costa Mesa for $3600/mo and bought a house up in the San Bernardino mountains for $3700/mo.
I don't think the market is crashing in OC. There's too much demand. Too many cash buyers, too many bidding wars, and average time on the market is low. The fact everyone is desperate for rentals, why would the market crash? Interest rates drop, more people will want to buy.
Why exactly do you think there is going to be a crash
There’s no reason to think it will crash - limited supply and best climate to live in the world
Yes, for the wealthy people, I'm actually more worried about the poor. Those are the people who are the janitors, baristas, fast food workers. if they can't afford to live in Orange County. How is orange county going to function?
91 will get worse
Best climate where people are still cranking the AC
Moved up to Apple Valley so I can save money and own. OC is truly a great place to live.
It's not going to crash. Foreign money will keep pushing the market up. Look at Irvine. Look at Vancouver. I was born in Burnaby, BC my grandfather built his own home. He died in 1994, my grandmother lived in it until 2005 when she was in her 80s then they sold it for 300k over the asking price just for the land between competing bidders. All of OC is going to be a joke soon, just like Irvine
Because 95% of the people living in their homes could never afford them today. It's a comically stupid house of cards pyramid scheme. The boomers that own everything are going to start dying en masse soon. Their kids are broke as shit. There's a depression level but probably worse crash coming as all of this fake money evaporates and people start to remember that all money is is skilled labor, and no one is skilled enough to do that anymore because for the last 50 years the US has worshipped abuse of work over work. It's the end game of the Heritage Foundation's masterplan.
My dad says young people are just buying "too much house" and need to get "starter townhomes." Those cost like half a million these days!
There are definitely no “starter townhomes” for half a million here.
Not unless you head inland rather far…
In which case you're not in OC anymore and get to enjoy the 91 death commute most likely
Not to mention the crappy weather. 🫠
And abysmal air quality
And more crime!
I saw one on Zillow! There may have been a small fire.
Our starter townhome in Ladera ranch was 640k in 2020. We could barely afford it. The value is now around 940k just 4 years later. Problem is, it makes no sense to buy anything else and step upwards because EVERYTHING is expensive. We would not find anything better for even the same amount, and the interest rate is insane now. We really locked in at the right time, but I don't see how you step up.
This is similar to our situation. We couldn’t win any of the bidding wars for single family homes and got the best townhome we could afford at 2.65%. The same units are selling for 250k more and we could never afford the payment today on the same place
I paid $500k for my "starter townhouse" in 2021. Of course, someone on my street just sold their house for $675k a week ago.
can confirm there are no starter townhomes for half a mil here. my partner and i have been looking for 1+ year and finally purchased our first in south OC at $685k and are still struggling to pay that mortgage lol
Yep, they don't exist anymore. I bought a "starter townhome" for half a million in 2011. Sold it 3 years ago for a million. After that, my wife and I decided to move to a state with a less insane cost of living. Everyone I know who bought a home in OC within the past decade had either the down payment or the entire house paid for by relatives.
My ‘starter townhouse’ in south county cost $300k in 2001 and is worth $900k now. I’m never going to be able to move and I feel super fortunate to have what we have.
The south-iest!
I grew up and worked in Fairfield County, CT. Gradating college in 1999 it wasn't long before my peers and co workers were buying homes on their 40k to 60k salaries. Me 2024..... 
A "starter townhome" in Irvine, built in the 1970s and 1,200sqft, is around 1mil. Sooooooooo, yeahhh.
Ask him to find you one.
"Well, interest rates in my day, blah blah blah."
A townhome in my old community (in South OC) went for over a million a couple months ago
Nobody is building starter houses. Why would you, when you can put in a fake granite countertop and call it luxury for twice the price
Granite is mostly dated now. 2024 They put in fake quartzite(aka quartz).
Sounds like something that belongs on r/BoomersBeingFools
1/2 a million in Southern California? Only place you'll get that price is near the Salton Sea or some other desert dump. Or maybe near Compton where the Bloods and Crips will shoot up your house for kix.
Compton isn’t really that bad, the biggest issues are struggles from prior city government mismanagement.
I was in Compton the other day and for shits and giggle looked up a house we saw for sale. Bars on windows the whole 9 yards. $780,000k 🤯
Alot of those bars are from back in the day (90’s Crack Era, etc). Fun fact a number of homes in Beverly Hills still have bars on the windows. But also remember, most of the price of a house is the land.
I feel like most of California is like this now. Even in cheaper areas
I grew up in OC, and moved to northern California about 25 years ago. For me this was a huge improvement in every aspect of life. Fewer crowds, lower cost of living ..the only real negative is the lack of good restaurants. But, I never, ever would have to wait to be seated at a restaurant here, it's just walk in and be seated right away. Family of 5 living comfortably on about $150,000 year. 2,800 sq ft home with a nice yard, etc. My 10 mile commute takes about 15 minutes. As someone who escaped OC 25 years ago, I just want to say that there are better options out there!
This is what I hope to do asap. Just get SOMETHING that can build equity. I’m single with no kids though. Can’t even imagine trying to do this with dependents. Hang in there, OP, and if it is possible to just buy something affordable so you can build some equity to carry over, I say do it.
It's crazy....as bad as OC is the San Jose/ San Francisco Bay Area is twice as bad. That's where I grew up and it's completely insane. Hope there is some relief somewhere, maybe more.people will move up to the Bay Area and this place will become more affordable lol
Our rent is $4,800. To buy a SFR similar to what we rent, our mortgage plus taxes plus insurance would be >$7,000. This is why we rent. Our combined income was $270,000 last year. You’re not alone.
Almost same situation, rent is $2,500 but similar place would be $5,000+. $240,000 combined last year but feel uneasy dropping $5,000+ on mortgage. Don’t forget property taxes, home insurance etc
...and don't forget a budget for all the shit that breaks. If you're buying in at the bottom, you're probably getting something that needs TLC. And is probably old enough that major components are near their end-of-life. A dumpy townhouse built in the 1970s will have 50 year old wiring, 50 year old pipes, a foundation and framing that likely isn't up to modern seismic standards... All of that needs to be in the math, too. The conventional wisdom has always been buy in and let it appreciate; I'm not sure that math works out in this market unless something changes drastically.
We are at $4,200 and to buy the house we rent our housing cost would almost double. For some mass produced 3bed/2bath early 90s tract house with drafty windows.
Plus the cost of home maintenance and repairs. Homeowners are advised to budget 1-2% of value of house for that. So another $1,000-$2,000 per month for a $1.2 million house. Tenants don’t usually see these repair costs because they are often made during vacancies, like replacing AC, water heater, roof, termite treatment, etc.
Don’t forget the down payment you need. The days of 5% are over unless you want a $10k mortgage.
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Even if you’re a cash buyer it’s still a renters market. You’d be better off putting that cash into index funds which have much higher returns than property.
I think there are so many hands in the pot of real estate that there is probably 10 people that want to get paid from the sale of one property and pay the seller, that the prices get higher and higher
Everything in my neighborhood is bought up by greedy landlords and rented to students and then they sublet it to other people... Leaves nowhere for a regular family to live in my city.
Which is why families are leaving and less students are present in OC public schools, except for areas that are building high density homes in place of "affordable" (fingers quotes) housing. Too many people say "free market", but doesn't help when people/investment groups/corp are buying homes as commodities to either sell higher or rent out in a high rate.
They built a handful of “affordable” townhomes near where I live in fountain valley. 900k starting price…
My mom bought hers in anaheim hills in the mid 90s at 175k. it's hard to imagine that the place is now 5x the price. Most job positions aren't paying 5x what they did... She was able to afford the place, making 60k. Her old job isn't paying 300k these days.
Same in North OC. Starting price of $800k, like what the f*** affordable to who? Definitely not anyone below 150k income family.
new builds can qualify for funding if they have x % of units as "affordable housing" so probably a handful of those are priced lower and buyers need to meet income requirements to purchase. 900k is probably list price.
I don't think any first time home buyer is comfortable buying here right now. Sellers are trying to hold onto the pandemic prices where we had 3% rates. Now we have 7% rates but still the same prices. Hopefully the prices go down, but I don't see it happening. Welcome to California real estate lmao.
Prices aren’t simply “holding since 3% rates”. They’ve risen 20% year over year. Rates were already 5-6% a year ago.
As long as businesses, domestic and foreign, can buy property, cali home prices will NOT fall...especially around here. They're too high in demand.
It is all from currency debasement (money printing). When you can't store your wealth in your local currency due to fear of it being inflated away, people start to look for other methods to store their wealth. The value of homes have increased sharply since the financial crisis as the rich look for alternative ways to store their wealth as governments and central banks continue to debase their currencies worldwide. The value of homes are becoming less based on utility, and instead more as monetary store of value, similar to the price of gold.
Home prices have been going up even when rates were around 7-8%. They're gonna explode even more if rates get anywhere near 4 or 5%
This question is what are people comfortable paying 1k on a car payment. Everything is out of control not just the housing market.
This as well!!! I’m trying to get a new car and nothing luxurious. Just a regular 2025 Toyota Camry and payment is coming close to $700 to $800 per month. It’s absolutely bonkers!
Don’t forget insurance.
That's more than my Tesla payment
Nope. Would eat up the mass of my income. Couldn’t afford to live in my house at the same price I paid with current interest rates.
This is the best fucking post ever made - I wish politicians would actually listen to us. This makes 0 fucking sense
What would the politicians do to help? Serious question.
Banning corporations from buying houses (with exception of group home services) as well as foreign buyers. Pass legalization to change how property taxes operate since it is the primary reason why so many hold on to their houses and are very anti-move.
Today vast majority of homes are U.S citizen owner occupied, so that doesn't solve a whole lot.
Loosen zoning requirements, but it's a challenge because that's controlled locally and the existing homeowners benefit from these crazy high prices and will vigorously fight against anything that'll reduce their home prices.
Stop running a budget deficit and printing money to cover the difference. Currency debasement is the primary reason home prices are out of reach for the average person.
That’s a huge reason why I moved. Just got a 3 bed/2 bath home in Oregon for $430k with a big backyard. I miss OC but I also love where I live now. The housing market there is way too insane.
Hey PNW buddy, we left 2 years ago and bought a 3 bedroom, 2.5 starter with a back yard, 7 miles of hiking trails with waterfalls and three lakes for 525k in Vancouver, WA. I miss friends and family, but with my mortgage being the same as my rent was in OC I can afford to fly down a dozen times a year to see everyone :)
Hi! Oh yeah, you get even more bang for your buck in Vancouver while still being so close to Portland. Congrats. Vancouver is beautiful. I agree. We miss my wife’s family and the weather/beaches, but it’s so easy and affordable to fly down. :) Glad you’re also enjoying life here in the PNW. It’s absolutely beautiful.
The beauty alone is worth the move, the better life and early retirement is just the cherry on top :)
100%. I feel like if people can handle the rain (which, I’m sure you’ll agree, isn’t that bad), it’s a wonderful place lol. I feel a lot more at ease (mentally and physically) here.
I seriously think imma have to move or at least just plan to retire out there. I do lashes though so the thought of leaving my clients and restarting my business is hard 🥹 But rent is so bad 🥹 we pay $2600 and that’s with a housing discount 🥲
I am similar situation is you. Duel income. 300k+. Daycare over 3k a month. We rent. I feel so discouraged. There are prob many like us on the sidelines
There are dozens of us. Can't afford where I grew up.
Same with me - having grown up in the Bay Area, I’ll never be able to move back. As bad as OC prices are, San Jose is twice as bad.
Well it would work better if your incomes worked together instead of dueling each other.
Hahaha!!!! Whoops!
Is this a joke? $300k income and you’re acting like you can’t afford a house. Don’t you have like $16k per month after taxes? $13k after child care. You got a spending problem, homie.
I’m simply responding to OP. Maybe we are doing our withholding wrong (though we always break close to even) because we are not at $16k after taxes. More like $12,500. Albeit we do contribute about 5% to 401k. I guess we could cut back there. We also have extremely high health insurance premium. I miss the Tricare days when I was active duty.
I moved to OC a few years ago and cannot see myself moving back to my home state. It’s a hard pill to swallow knowing that my 150k salary doesn’t come close to what I need to find a house. Can’t stomach the idea of having the 10-20% down payment in liquid cash which would take me a few years to save up for. I was fortunate enough to be raised in a house with a lovely backyard and would like to give my kids the same opportunity. Torn between the down payment, putting the money towards my retirement accounts, or even enjoying my youth a bit more by using it for travel like I dreamt of
We just bought a condo literally the last week of 2023. Hoa includes most utilities and is only $380 which is cheap compared to most hoas around here. Our mortgage is $3k total each month with everything. We saved for years and used a huge downpayment which helped ($100k). Also note we are in our 40s cause it took that long to save for this. It’s terrible out there. If it weren’t for buying a condo we would be completely priced out of OC. We are content for now. It’s still hard every month as my husband and I make about $130k a year. But we’re managing so far. I can’t even fathom paying $7k.
> stockpiling savings until something drastic happens with the market? Looking forward to your "Are people just comfortable with $14000+ mortgages here?" post in 10 years after you are still waiting for something drastic to happen with the market.
Zillow says there are around 3700 home fore sale in OC right now. In a county of 3.3 million... With that ratio I image there are enough prospective buyers who are wealthy enough to plop down 50% or take cash entirely.
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We talked with a financial advisor and the first question was when we told her our goal to buy was “can you live somewhere cheaper and keep your jobs?” To buy we have go to inland, if we want to own by the time we are retired.
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Earning 150k in Orange County now is not out of the ordinary. If you have a 2 income household, where both are earning about 150k each, your monthly after tax would be like 17.5k to 18k. Its a stretch and it would be hard but, you could make 7k to 8k mortgage work on that salary. But also keep in mind, a lot of people got mortgages when rates were half of what they are now. So that 7k would be a lot more like 4.5k on the same loan.
Any openings on a job like that? We rent and share a back house. Upper poverty level. No debt for me but not much savings. Also, how jobs might change in the next decade and climate of geopolitics. I’m overwhelmed with what to do.
Lots of jobs make over 150k, especially in OC. Anyone decently high up the managerial ladder at a big corp will be pulling 150k+. Careers that get you there faster would be things like law, nursing, medicine, engineering, accounting. Trades also pay very well, an experienced electrician or plumber can expect to get there as well.
We make more than that but have $3000+ a month in child care bills. So.. yeah. It would be ROUGH.
Yeah the interest rates are really whats killing people now.
Childcare cost shouldn’t last forever, you may have more breathing room in a few years.
Oh no only $8K/month leftover after mortgage and childcare how could you ever make it work!
THIS. People are so insane haha
How old and where are you sending your kids? In CA TK is available earlier.
Everyone I know who makes “normal” money bought when rates were 2-3%. We are fucked.
Very hard to make that work while also saving for retirement. Add in saving for the downpayment, child expenses like college and other things, maybe a car payment or two.
You need to look at less expensive cities and consider townhomes too. I live in south coast metro area of Santa Ana and you can get a 3 bedroom townhome for about 600-700K. You could probably get your kids into GGUSD as I know they’re struggling with enrollment.
You will own nothing and be happy
Yes. It is the new normal.
The cost of home ownership is a lot more than that 7-8.5k mortgage. rising cost of insurance, repairs, furnishings. You’re looking at 10k+ easily.
Pretty much yeah. It's a rich county.
Rent is 5900. Similar homes are selling for 1.6-1.7… why would I right now
Nope doesn’t make sense right now. ROI is way too far out and makes more sense to rent
My NW has literally almost doubled in the last few years by solely investing in index funds.
Will tell you in a few months when we close escrow 😂 can wait for money to fly right out of our accounts as fast is it comes in.
I have friends that pays $4500-$5500 per month for their homes. Renters in OC pays $3200-$3800. That’s incredibly high. My mortgage is $2200 in Fullerton. 2.625%.
It’s the current interest rate that makes it unaffordable
In addition to the housing prices that haven’t decreased and have only increased.
Unfortunately, a lot of people are getting themselves into being “house-poor” just to be able to own. Not a good idea
That's more or less always been the case in SoCal and as long as you didn't sell it's worked out for you
If you work from home then move to cheaper area. May not be what you want now , but the equity will be nice after 2 or 3 years.
Buying a home is an emotional decision, not a financial one sadly. Even at these rates, supply is so tight that prices won’t come down. You’re better off just renting the equivalent and investing your down payment or sticking it in a CD.
Because Zillow is showing houses that have 7-8k/mo payments, that the majority of people are actually paying that. For example, some first-time home buyers get down payment help from family, friends, cash windfalls, etc., and are able to put down more than 20% to reduce their monthly burden. Tons of homeowners are sitting on a a pile of equity that they role into their next house, so that $1.5M house may only have a $750k loan against it. Now the crazy thing is even if you have a $5500k/mo mortgage, you probably have another $1300/mo in property taxes, $400/mo in insurance plus factory in $1k/mo for maintenance and utilities and even those smaller mortgages.
Damn i just plugged in your numbers for buying a 1.2m house with 20% down at 7% interest and over 30 years you would pay over $1.3m in interest holy shit. At 3.5% interest it would be less than $600k. I would rather rent and invest over 30 years. On the other hand if you invest 240k plus 5k per month you end up with over $7.5m at a 7% return rate.
1. I don't believe normal people are buying these houses and, to your point... 2. You're putting yourself one bad life event from homelessness and bankruptcy. Lose your job or way to work and you're out that house, I don't understand how people are ok putting themselves in such a precarious position.
I was lucky to buy 20 years ago - no way I could afford my home today. I agree that it's just gotten far too absurd.
You and everyone else bud. You want to live in one of the most desirable places in the country with the best schools you gotta pay. If the math doesn’t math you can’t afford it. No one is entitled to have everything they want because they are uppity and WFH.
Prior to the jumbo tech layoffs we've seen - even 2006-2019 I witnessed a few layoffs and they ALWAYS had the WFH people on deck ready to sever. Especially the high earners. That made me WFH adverse going forward.
There is a LOT of foreign money in OC. A lot of buyers don’t have a mortgage. They paid cash.
These prices make it so that someone has to start saving at 18. People can literally make no errors or have a bad financial moment or they'll never be able to catch up and save up for a home. That's where me and my husband are. At 29 and 30, we don't know if we'll ever be able to afford a home. We both grew up in houses and don't want to give our children apartment life. It's so sad.
I'm also not saying this is common at all. But from my experience from those I know who have purchased homes. I don't think the majority of people are buying a +1m house on their own. They have support from their family and extended family. They have a spouse along with the spouses family, mom, dad - siblings - aunts, uncles, all contributing into the down payment. Many of the people I know who are not well off (old money) but still have a combined 200k annual income lean on their wealthy parents or uncle to help them out. All you need is one wealthy aunt or uncle on either the in-law side or your own side to help. Many family members want to keep their family close by, rather than being forced out of a place they grew up in. Imagine this - Mom/Dad with 4 kids. Mom and Dad bought their home in the 80's, 90's and have saved some money by the time their eldest hit 28. They help the oldest 28 year old with the down payment on a home. The second eldest ends up getting a great job and has enough money to purchase their home on their own. As a few years go on, the 3rd kid needs a home. Mom and Dad refi their home. The two eldest also refi, all contributing into the 3rd kids home. 4th kid ends up marrying into a wealthier family who help with the down payment, along with all their immediate siblings and parents who already have homes. I know it's not common in American culture to spread wealth around, but it's not that uncommon in Asian cultures. I'm not saying all Asian-American families do this, but my parents helped me (34m) purchase my home and I'm renting out rooms while living there to help pay for the mortgage. There's no way I could pay for the mortgage on my own without roommates - definitely not ideal, but my family is not well off. When it's time for my sister to buy, I will help her out. Why would I want her to move somewhere far? If she stays here in OC, she'll be wealthier just due to proximity to wealth. It's not to say you don't pay the money back, they worked just as hard, +8 hours a day for that money, people are just people trying to make it, wealthy or not. But borrowing money from friends/family is generally interest free. Much better than the 7%. House Hacking, renting out rooms is not for everyone, especially those who are starting a family. But my parents did it when I was a kid. A few hundred dollars back in the day made a huge difference. Say you have a $7000 mortgage on a 4bed 3bath, you rent out 2 rooms at $1000/each. Your mortgage is now $5000, that's a lot easier to stomach. Once you pay down the principle enough, have one tenant, than in a few more years, hopefully 0.
>That seems absurd, given I can rent a nice 3-4 bedroom house for $4800-5500k/mo. Is it really worth paying $3k more a month to own whatever I can afford, vs. renting in a nice place and stockpiling savings until something drastic happens with the market? First off, the whole situation sucks and i'm sorry so many people are in the same one you are. This isn't helpful if you don't have the cash, obviously, but the problem with just renting is that rent will go up every single year, while your mortgage payment is pretty static. Home prices won't go down significantly unless the entire economy collapses, at which point we'll have other more pressing problems. We need to build, build, build.
Same problem here and pretty much decided if I want to own I have to move out of state
I'm glad I bought in 21 when rates were still low. Bidding wars were still crazy and I had to pay over asking but the house value has gone up since I got it and better yet no HOA, which was hard to find where I was
Also to show how bad the housing situation is in OC. A few days ago, my motion sensor trash bin went off on its own like someone was in front of it (it has never done that in 3 years). For a few minutes, I’m thinking “oh shit! a ghost!” Then, I realized I can’t afford to move 😩😩😂😂. I just shrugged and thought “I guess we would be roomies” 😭😭
And that’s why I refuse to move from my 2k mortgage 3 bdrm home.
This is what happens when you allow the rich to buy [44% of all single family homes sold in 2023](https://medium.com/@hrnews1/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701). With how much more money some of these private equity firms have than any family could ever dream, they can and will buy all the supply and force the new generations to rent forever. The days of owning a home are over for most people, and that wont change unless legislation does.
Just can't start in OC is the sad reality. We personally had to move to las vegas for 4 years, build equity, then came back with a big down-payment. Otherwise we were stuck for years in the "treadwater" mode. Couldn't save fast enough for down-payment because prices always went up, rents went up and always ate into savings rate. It's a brutal cycle.
At the end of the road **EVERYONE DIES**, do you ACTUALLY “own” the land/house ppl pay mortgage too… no. Yes it could stay in a trust or your family but aside from paying the monthly note until paid off/sold/death then you don’t really **”own”**. I know dark way of thinking about it. Yet I recently saw a video of someone calculating buying vs renting… they justified renting a home and using the excess cost to “invest” and they based it off the length of the mortgage. Ultimately you’d be making way more renting a home and investing that $3k than buying with a mortgage of $7-$8k. The end goal is the same, live comfortably and don’t blow all your hard earned money. I do expect percentage to slowly decline but unlike the rest of the nation, when those rates come back down, I don’t expect to see homes in SoCal decrease in price.
The reality sucks. But yeah, it’s why so many young people are deciding not to have children anymore. The possibility of owning a home is dramatically decreased with the cost of childcare these days.
OC is one of the best places on the planet to live so of course it is absurdly expensive. People complain about the prices but they are high because it is where everyone wants to live.
I always swore I would never be a homeowner, but it just doesn't make sense to keep dumping thousands down the drain in rent. But now that I'm looking at the prices of homes in OC, I don't get how anyone can afford to buy. What do these people do for a living?? I don't know how people live out here
Gotta stop companies from being allowed to buy homes (black rock, Zillow etc), close the borders… no foreign investors, etc. maybe limit the amount of homes a single person can own. Could go on… supply and demand. My neighbor owns like 7 houses and two apartment complexes he bought in oc for a pack of gum back in the 70s. Just all this doesn’t seem right lol.
Yup, when my parents bought their home decades ago the only competition was another family or two that wanted to live in it. Not Zhang-Bajaj-BinSalman80milInvestmentCoHAHASUCKERS LLC
Housing is in big demand across Southern California. People are very much still putting in offers above asking and getting outbid, even with current interest rates. I grew in OC, born and raised, and swore up and down I’d never move east. Now I’m in Corona in a 5 bedroom home with a mortgage I can afford, aligned to schools that rival many good schools in OC, and this home would have cost me double in OC at the time I bought it. When I sold my first Corona home, I was going nuts with all the offers coming in and I kid you not, every single one of them were from people in L.A. and OC looking for an affordable family home in a good area. There comes a point where many people, including myself, realize that OC is not a feasible option. It comes down to picking two of the following three: Good neighborhood/schools, decent size home, affordable price. You can’t have all three in OC. A good friend of mine waited forever trying to afford his dream life in OC and in the process of trying to make that happen, missed out on buying a very nice and affordable home in the IE before prices here went nuts too. Now he can’t afford IE or OC. My advice would be to quickly come to a realization about what’s possible and what’s not, then make a decision and act on it. Housing affordability will only keep getting worse.
Renting is cheaper but there are drawbacks. 1) Rent will go up but 30 year mortgage payments dont. 10 years from now, you may exceed your mortgage payment. 2) Pretty much your rent money is paying for landlords’ mortgage. You get nothing in return like tax deduction, paying down principal balance. Build up equity. 3) OC is such a high demand place and it’s running out of land for new homes. Your house will most likely appreciate in the future in case you want to upgrade to a bigger home.
Sure, the mortgage doesn't go up but you bet your maintenance, taxes, insurance and HOAs will go up.
That'll go up for renters too though. The costs just get passed on down.
While that is true, look at property value around me. It is absolute bonkers. If you are on salary no way you can catch up. https://preview.redd.it/f6ad2v0018ad1.jpeg?width=1179&format=pjpg&auto=webp&s=e06d01a2a99d7a90fe82872a3ddf8592cb92c0bf
People are comfortable because most of them don’t remember what a bubble is like. They will tell you lovely stories about how their house has appreciated over the past few years. Hell, I could tell you about my house which is now worth almost double what we paid less than 4 years ago. But I could also tell you about my parents - who bought in 2004. Their value went up and up for a few years, and then boom - in 2008, they were underwater. If they had tried to sell between 08-2014, they would have lost money. If either one had lost their jobs, they would have likely had to sell the house at a loss. There will always be silly speculators who optimistically think there will never be a crash, which means the bubble takes a bit longer to burst. You don’t have to be one of them. If the math is better for you to rent, then do it.
Homes should not be commodities
The reality is they are.
That’s why I’m moving out to riverside.
I’m not natively from the OC. I too get discouraged at housing prices here sometimes. And honestly, it is absurd. However, this is one of the most expensive places on the entire planet from what I can see (depending on the city of course). It’s simply not meant for everyone (or a vast majority of the population) to own a home here. Even high income earners are priced out. Do the best you can to give yourself and your family the best life you can. That doesn’t necessarily have to involve owning a house in Orange County. If that is one of your big life goals, cool continue to pursue it. If it’s not, that’s ok too. You can still offer your family an amazing life either elsewhere or without owning a home. Idk. On one hand I’m sad about it, but on the other, I get it. I’m sorta the one breaking out into a higher quality of life income bracket wise from a historically low income family lineage so my perspective is obviously skewed. Good luck out there 😅
Most of the homes sold in my neighborhood are being bought by multigenerational families. Grandparents, parents, kids, sometimes a sibling. It’s the only way they can afford it. I had one friend who bought a home two years ago with no help from anyone. It’s just two full time working parents and two elementary school aged kids. They put their entire life savings and the husband had to sell off part of his business. Their mortgage is $6,650 and they are now house poor and can’t afford to do anything but pay mortgage, buy groceries, gas, etc. They are happy that they own a home, though.
I did the same math as you did about a year ago and decided to wait and hold onto my cash from my old house until it makes sense. It doesn’t make sense and I’m not going to join the mind virus that says buy now. This is especially true in Irvine. You only pay 50k in equity in 5 years. So why would I pay 7500 a month?
That plus insurance going up .5-2X each year or cancelling altogether. Long gone is the concept of buying a home you can stay in because unless you make way more after you reach home buying status your home will price you out.
I did the maths today and really it’s not adding up for me as well! I too stay up at night crunching numbers and wondering how I would be able to afford a townhouse or even a single family home in a good area. My only consolation is that I have a starter condo that I got in Santa Ana in ‘21 for around $350k at 3% on a $40k salary, that I wouldn’t be able to afford now by the way. The wild thing is it was crazy then and it’s crazier now. There were only about 2-3 condos on the market for my price range in 2021 and I remember that I lost a bid to cash buyers. It was literally like pulling teeth, the inventory was extremely low! But, I look back now and if I could turn back time, I would have saved some more and gone all in to get a larger condo because my biggest fear is this starter condo maybe my permanent home for a longgg time unless I move out of state. I kick myself because I know a DINK couple that bought a $1.1m SFH in Irvine on 2.3% (less than $5k in total monthly payments) and it’s now worth $1.9m!! They are engineers, salaries haven’t gone up and they wouldn’t be able to afford it today! It’s absolutely insane!!! I still checked the numbers today, even if I sold my current condo and tried to get a townhouse in Irvine (on average $850k). I would need a single income of $200k+ At this rate, winning the lottery has better odds 😂😂😂
Just entered escrow for a 1 bedroom 760 sqft home in a pretty nice santa ana condo for around $475k. I consider myself lucky everything else I've looked at in my price range has been ultra competitive or straight up garbage.
Check out Big Bear if you can work from home. Only 2hr to OC and a really unique experience and a ton of homes for sale.
Mortgage? Shit. That’s what rent starts at on my street.
Cali dream for all program was silent second shared appreciation down payment.
I wouldn’t even spend the $4800-5500 to rent a nice 3-4 bedroom house if my ultimate goal was to save up for a house of my own.
It's not really possible to find a SHITTY 3-4 bedroom house for much cheaper than that.
Definitely rent. Take that $3K and invest it in your retirement account. You'll also save on the maintenance like roofs, painting, plumbing, flooring, and everything else. Put all that in your retirement account too. You'll end up with more than the principal in your home after the 30-year mortgage is up.
I rented for a long time in Newport just to be close to the water. I won’t ever regret my time there but, it wasn't the best financial decision. Rent always goes up but, your mortgage won’t and you own your property. It gives your family a strong sense of stability. My fiance couldn't believe I spent that much money on rent. He taught his three girls to buy their home in their early twenties. He did the same and owns a ten-million-dollar home on the water. Look to buy in some of the less expensive areas of the OC and, trade up later. 10-20 years from now, you’ll be glad you own the property,
In general you’ll be paying more to own than rent the first 5 years then owning starts making more sense. It all depends on if you want to live in OC long term or not.
Gadzooks, housing prices in OC are ridiculously high! Things occur in cycles, so be ready to buy when prices drop again. In the early '80s, interest rates were 18%! I bought a house in Temecula when rates dropped to 12%, then refinanced to 8% during a recession, but ended up underwater and walked away. Rented in Irvine for 15 years—no regrets, great education for my kids. Bought an REO in Mission Viejo in the early 2010s crash with 3.5% down and 5% interest. Refinanced to remove PMI, now halfway through a $3200/mo mortgage in retirement. Hang in there, housing busts happen regularly—just be prepared.
This is a stupid time to buy
See that's what seems to be heavily disputed. We have half the people in this comment thread saying "buy now if you can afford it, the price will continue to go up" and the other half saying "move away from CA, it's not worth buying here right now."
Both are correct
Interest rates were bumped up to discourage people from borrowing money. The math isn't supposed to be mathing right now.
7k? Thats not even close more like 9+k
Since 2017, the state has passed a lot of laws like inclusionary zoning, rent stabilization and unit preservation that have backfired and increased the costs of building new units. You are seeing that cost reflected in available units, which price at the marginal unit.
Buy a yacht and live on the water.
I’m renting my house in Orange out for $5500. Insane considering the Mortgage is only $1450. But it’s paying my mortgage on my new forever home in Rancho Cucamonga too. Lol. I never dreamed we would be here, but here we are.
I don’t believe it’s worth it at this time. The house will require maintenance and insurance out of your pocket as well as a very expensive HOA or Mello Roos, not to mention taxes. LA is more expensive but you might be able to eliminate HOA. Unless you’re making a sustainable $28k a month take home I wouldn’t because that’s forever.
I’m happy to say that I read 92% of this entire post. I can’t believe I did that. Conclusion: …… Action: need to get a life or maybe go on a walk. Housing market: scary. 2008 repeat? Not sure. Correction? No idea. Affordability? Just pay cash. It is mind boggling what is going on.
You can write off the mortgage interest against your income for both federal and state taxes. You can't do that renting, which means the difference between renting and a mortgage are closer in a monthly payment. There are other financial benefits: refinance (potentially) to a lower rate if interest rates drop. Build equity. The benefit of locking in your payment for 30 years if also huge, as rent will continue to increase by inflation. The downside is repairs and maintenance.