The issues with trying to buy a starter condo/townhome now, then upgrading in the near future (say3-5 years) are high HOA fees ($300-$500), lack of living space (Mission Valley you are looking at $600/sq ft or more), and Mello Roos tax on newer condos such as Eastlake Chula Vista (about 1% extra property taxes per year) in addition to real estate agent commissions costs. If you only live in a condo for 3 years, but had to pay $30,000 in real estate agent fees, that’s like an additional $10k per year in costs, not to mention the hassle of moving. Probably makes more sense to keep renting and build up savings for a home with enough square footage to live at least 10+years.
Thanks for the thoughts! You are absolutely correct that there's plenty to consider when it comes to this. I will say, some of your concerns are not an issue everywhere you look. Yes, HOA fees need to be considered, but they can also save you a lot of time and energy by not having to maintain or repair anything outside the home. That can get quite costly in a single family home. You do need to consider Mello Roos, but let's be honest if you are buying an attached property for more affordability, then you probably won't be buying a newer home with Mello Roos. Although that's not always true because there's fairly affordable attached properties in the outskirts of the county. And lastly, the way home sales work in San Diego currently, the real estate commissions are generally included in the sale price. I've helped over 100 buyers in San Diego, and I've never had to ask my clients to pay me directly, it's always been included in the purchase price. Granted, it's possible that may eventually become a thing of the past, and you will need to consider an additional fee towards a real estate agent. You also have closing costs that need to be considered, which may be what you are thinking of? Oh and as a bonus, you are also right when you mentioned 3 years. Generally speaking, you don't want to purchase a home planning to sell it in 2-3 years, as that is usually the breakeven point. Plan for 5 years, and if home values appreciate faster and you make more money, then 3 years could totally be possible. I just met with clients yesterday that will be selling their 800 sq ft home exactly 2 years after purchasing it, and we expect them to profit over $100k in that sale (after commissions and closing costs are taken out)
So true, we started with a condo about a year ago, the value has already increased even in the high rate environment. Our goal is to upgrade to a house after living in the condo for about 5 years.
If you want a median priced single family home or better, you generally need dual income and a lot of times you need to bring equity from a previous property. Which is why it's impactful to get your foot in the door with something more modest. And sure the average salary is less than $100k, but there are a LOT of people that make significantly more than that. Because the quantity of homes available is so dang low, those people are having a massive affect on housing prices.
Competitive SD buyers are baby boomers with lots of cash thanks to the 2018 tax cuts. They don’t need a huge mortgage and prices will go up bc inventory is always low.
WAY less thank $100k! More like $60k. Median HOUSEHOLD income is $118k. In this town, your household income needs to be at least $150k just to get by with a somewhat middle class lifestyle. Like the video says, you need to be more like $250k if you plan on buying a home.
Did the same thing too. Bought a house, and rented some of the rooms for extra cash. Thing is, you should consider the rented room extra cash and not forever. You should be able to cover the payments without them
@@DanPBestLifeSD gotta do what we gotta do to make it in SD. i'd probably be renting for a while if i didnt pull the trigger when i did. no way i'd be able to afford the house i have right now. probably wouldve just started out with a small condo or something
My issue is property tax. I got my house, actually half of a house, through inheritance, so my prop tax rate is low. So as much as I'd like to downsize, the idea of having to pay a current tax rate is terrifying. It's moot, as neither of us owners can afford to buy the other one out, so we make do. But I really don't know how new owners can manage.
I appreciate the response and perspective. I'd say the opposite is true, and it's not a property tax problem, but a huge benefit you've received through inheritance. Getting your foot in the door is the hardest part, and the fact that you are able to inherit such a low property tax is so impactful it's hard to give that up.
@@DanPBestLifeSD Oh I absolutely know I got a huge benefit. But it really shouldn't have been. One women I spoke with a few years ago had just bought a smaller house in an older neighborhood, and was paying $500 a month in property taxes. I'm sure it would be much higher now. I just can't understand how anyone can afford that. And I know it's actually a smaller percentage of the property value than most states, but still.
What percentage of their household income do you think the majority of people who are spending on homes they've purchased since 2022? More specifically people who are buying homes at about 1mill.? Thanks
City planning can make changes to zoning and other ordinances that can affect housing in the long-term. But we are talking 20-30 year changes a lot of times. The city of SD and California are putting new policy into effect to try and increase inventory, but nothing so far seems to have a significant impact on the short term.
People living paycheck to paycheck can never afford a house in San Diego. Only those who live beyond paycheck to paycheck can buy in Sandiego... I.e mortgage is (beyond paycheck) and income is paycheck!!😮 Only the truly desperate like me buy, and pay mortgage from savings than income 😢
It's easy to buy a house in So Cal. Move to Texas LOL. That market is blown. So sad. Texas sucks bad, but I can't have a 2 hr commute to Escondido to live in a 700k starter home while my kid goes to a gang infested school.
The issues with trying to buy a starter condo/townhome now, then upgrading in the near future (say3-5 years) are high HOA fees ($300-$500), lack of living space (Mission Valley you are looking at $600/sq ft or more), and Mello Roos tax on newer condos such as Eastlake Chula Vista (about 1% extra property taxes per year) in addition to real estate agent commissions costs. If you only live in a condo for 3 years, but had to pay $30,000 in real estate agent fees, that’s like an additional $10k per year in costs, not to mention the hassle of moving. Probably makes more sense to keep renting and build up savings for a home with enough square footage to live at least 10+years.
Thanks for the thoughts! You are absolutely correct that there's plenty to consider when it comes to this. I will say, some of your concerns are not an issue everywhere you look. Yes, HOA fees need to be considered, but they can also save you a lot of time and energy by not having to maintain or repair anything outside the home. That can get quite costly in a single family home. You do need to consider Mello Roos, but let's be honest if you are buying an attached property for more affordability, then you probably won't be buying a newer home with Mello Roos. Although that's not always true because there's fairly affordable attached properties in the outskirts of the county. And lastly, the way home sales work in San Diego currently, the real estate commissions are generally included in the sale price. I've helped over 100 buyers in San Diego, and I've never had to ask my clients to pay me directly, it's always been included in the purchase price. Granted, it's possible that may eventually become a thing of the past, and you will need to consider an additional fee towards a real estate agent. You also have closing costs that need to be considered, which may be what you are thinking of?
Oh and as a bonus, you are also right when you mentioned 3 years. Generally speaking, you don't want to purchase a home planning to sell it in 2-3 years, as that is usually the breakeven point. Plan for 5 years, and if home values appreciate faster and you make more money, then 3 years could totally be possible. I just met with clients yesterday that will be selling their 800 sq ft home exactly 2 years after purchasing it, and we expect them to profit over $100k in that sale (after commissions and closing costs are taken out)
I agree with the advice. I started off with a condo in Carmel Valley in 2002. Got me on the property ladder and was a great decision.
There you go! And congrats on the move!
So true, we started with a condo about a year ago, the value has already increased even in the high rate environment. Our goal is to upgrade to a house after living in the condo for about 5 years.
Great way to ratchet up to a bigger and better home!
Great Video Dan!
Appreciate you sir
The average salary here in San Diego is less than 100k
That’s what I don’t get. average salary and average home price are so misaligned.
If you want a median priced single family home or better, you generally need dual income and a lot of times you need to bring equity from a previous property. Which is why it's impactful to get your foot in the door with something more modest.
And sure the average salary is less than $100k, but there are a LOT of people that make significantly more than that. Because the quantity of homes available is so dang low, those people are having a massive affect on housing prices.
Competitive SD buyers are baby boomers with lots of cash thanks to the 2018 tax cuts. They don’t need a huge mortgage and prices will go up bc inventory is always low.
WAY less thank $100k! More like $60k. Median HOUSEHOLD income is $118k. In this town, your household income needs to be at least $150k just to get by with a somewhat middle class lifestyle. Like the video says, you need to be more like $250k if you plan on buying a home.
Did the same thing too. Bought a house, and rented some of the rooms for extra cash. Thing is, you should consider the rented room extra cash and not forever. You should be able to cover the payments without them
Great points! And I'm glad to see I wasn't the only one
@@DanPBestLifeSD gotta do what we gotta do to make it in SD. i'd probably be renting for a while if i didnt pull the trigger when i did. no way i'd be able to afford the house i have right now. probably wouldve just started out with a small condo or something
My issue is property tax. I got my house, actually half of a house, through inheritance, so my prop tax rate is low. So as much as I'd like to downsize, the idea of having to pay a current tax rate is terrifying. It's moot, as neither of us owners can afford to buy the other one out, so we make do. But I really don't know how new owners can manage.
I appreciate the response and perspective. I'd say the opposite is true, and it's not a property tax problem, but a huge benefit you've received through inheritance. Getting your foot in the door is the hardest part, and the fact that you are able to inherit such a low property tax is so impactful it's hard to give that up.
@@DanPBestLifeSD Oh I absolutely know I got a huge benefit. But it really shouldn't have been. One women I spoke with a few years ago had just bought a smaller house in an older neighborhood, and was paying $500 a month in property taxes. I'm sure it would be much higher now. I just can't understand how anyone can afford that. And I know it's actually a smaller percentage of the property value than most states, but still.
What percentage of their household income do you think the majority of people who are spending on homes they've purchased since 2022? More specifically people who are buying homes at about 1mill.? Thanks
Is the city planning to do anything to increase inventory? I don’t see how anything can get better without an increase in inventory
City planning can make changes to zoning and other ordinances that can affect housing in the long-term. But we are talking 20-30 year changes a lot of times. The city of SD and California are putting new policy into effect to try and increase inventory, but nothing so far seems to have a significant impact on the short term.
Right I have live within my budget
Looking fo a home now
It's not just the interest rate. Immigration has a big effect as well.
People living paycheck to paycheck can never afford a house in San Diego. Only those who live beyond paycheck to paycheck can buy in Sandiego... I.e mortgage is (beyond paycheck) and income is paycheck!!😮 Only the truly desperate like me buy, and pay mortgage from savings than income 😢
Easy. Just sell you Orange County home and buy cheaper in SD
Easy peasy
It's easy to buy a house in So Cal. Move to Texas LOL. That market is blown. So sad. Texas sucks bad, but I can't have a 2 hr commute to Escondido to live in a 700k starter home while my kid goes to a gang infested school.
it translates into " the main man" mane is slang for main
now that i think about it i think its from scarface
No substantial information, sorry
It’s ok