Moving to Orange County from Midwest

[Spanky]

Is it worthwhile to move from Midwest to Orange County, California (San Clemente) for a startup medical device company?

The pros are: potential rewards when the company issues IPO and nice weather.

The cons: expensive housing (a comparable house will be more than 2x value of my current home, possibly longer working hours). A 2,000 ft house is about $750K there.

Some people may consider buying a home in that area as an investment based on the premise that even though housing will be more expensive, you can usually recover the cost when you sell it based on the assumption that price will not decline in the Southern California area as demand should continue to rise at a reasonable pace. The appreciation rate of real estate is about 24% for last 5 years. I do not see this trend continues any longer. My concern is that the real estate price may plumet soon and may take a while to recover. What do you think? Is it a good investment or making a move to sunny California is a good thing?

 

[Nords]

Is it a good investment or making a move to sunny California is a good thing?

Humor me-- have you actually been to this place and driven around during rush hour? Just curious.

 

[Spanky]

"have you actually been to this place and driven around during rush hour? "

Yes, I have. My brother lives in LA and my friend lives in San Juan Capistrano. The traffic on Highway 5 is not bad at all in San Clemente, unlike traffic in Hollywood (Highway 101) or downtown LA.

Spanky

 

[wabmester]

My concern is that the real estate price may plumet soon and may take a while to recover.  What do you think? Is it a good investment or making a move to sunny California is a good thing?

I think that's a valid concern. Affordability for that area is the lowest it has been since 1989. And last time this happened, housing prices declined for 6 years straight.

 

[Spanky]

Wab,

Your point is well taken - real estate price in Southern California can decline significantly.

My main motivations of moving to California are three-fold. First, we like to establish California residence so that our daughters (age 16 & 12) could attend one of the University of California at resident rate. Second, the Bay Area and Southern California "should" provide greater career opportunities for Asians because of their presence at that area. Career opportunities, I think, are quite limited in the Midwest. Third, we like to be closer to our aging parents, two brothers and a sister. We only see them once a year and are getting tired of the frigid cold winters.

Spanky

 

[charlie]

Hey Spanky,

It sounds like you want to move pretty bad. Why
not just rent for awhile until you get a good read
on the housing situation?

Cheers,

Charlie

 

[Spanky]

Hi Charlie,

Thanks for the suggestion. We will see.

Spanky

 

[Brat]

Unless you have a good sense of the neighborhoods in any community I think renting is smart.  The problem you may have is changing schools within the community when you have teenagers.  IMHO you should research the schools in the area you intend to live, talk to the school placement folks in that District, and make your first residence based on that decision.  Then you can shop for a home to purchase.  Frankly I recommend that you rent for at least six months because it may be that long before you know whether or not this job is all that they promise and the company all they hope.

The new employer may help you with re-location costs, may even pay for a rental residence for a while.  You could call a couple relocation firms in Orange County to find out what the practice is in the area.  Ask them where you can find out about schools in the area.. what their test scores are and if there are factors you should consider.  

 

[Spanky]

Brat,

Thanks for advice and the words of wisdom. You are right that it is important to perform more research and get fet a "feel" for the area to which you want to move or settle. It is a good idea also just to rent for a few years until the kids are off to college and them move out since the cost of living in Orange County is too high for ER.

Thanks again.

Spanky

 

[Brat]

Once the kids are in college your housing needs change, although they still need a place to bed down and call home. At best they will join you for holiday and summer breaks, at worst you don't want them to be TOO comfortable for an extended stay.

The other issue is the stability of the new position. Start-ups have a high failure rate. If it makes it for three years the investors may want their $$ back so the business may be sold or go public. You may well find yourself facing another life change just as the tuition bills arrive. Keep your housing options open.

 

[wabmester]

Spanky, I can virtually guarantee that once you make the move, the financial considerations will pale compared to the climate and lifestyle considerations.  I was born in SoCal and lived there most of my life.   Most people who live there are from somewhere else.   I never once heard anybody in that region pining to return to the midwest  

 

[yakers]

I live in Southern California and just returned from some time in Tahiti, I would go live there if jobs were available (I am just throwing that in for the folks who think ythere is no better place in the world to live than Southern California)

The area you are looking at is very nice but I would also recommend renting. It keeps you more flexible for both employment and educational opportunities. I would not buy this area real estate for investment purposes. It may work out over time but I have both benifited and lost from swings in California real estate and I would not add these concerns to that of new employment and school issues.

You could get really lucky and go three for three if you get a job you like, schools you like and you are holding cash when local real estate takes a dive.

 

[Spanky]

date=12/20/04 at 14:04:02] I was born in SoCal and lived there most of my life. Most people who live there are from somewhere else. I never once heard anybody in that region pining to return to the midwest [/quote]

I assume that you are no longer living in SoCal.

You are right - the people who live there now are most likely from cold climate.

Suprisely, some (not many) people do move back because they miss their parents and are fed up with traffic congestion and the high cost of living.

 

[wabmester]

I assume that you are no longer living in SoCal.

Right. I found a place where the grass is greener, literally. But I fully expect for the SoCal magnet to pull me back someday. Ideally, about the time real estate there hits bottom.