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Re: House vs Retirement
Old 07-12-2006, 11:46 AM   #41
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Re: House vs Retirement

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Originally Posted by justin
If you really love the Socal area and have a ton of family and friends that you can't part with, then stay. You'll probably be happier in the long run. Acknowledge that you will pay a financial price however.

People in general are usually very willing to relocate to less desirable places for a 10-20% pay bump at a new job. Why not relocate for a 20%+ reduction in housing expenses?
Agreed on both points.

Despite my post about working in Socal and retiring in Brentwood, I think it makes good sense to try to work where you would like to retire. I suspect Justin that what you like most about Brentwood is the community - the friends you have developed over the years - and that you are either already retired or plan to stay put when you do retire.

It is easier for many of us to become part of a community over time. That is why retirement gurus caution people about moving after retirement. What good does it do you to move to a nice, affordable place if you have a difficult time fitting in. If I ever consider moving I will rent for a while first to discover whether this is my dream place or someone else's.
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Re: House vs Retirement
Old 07-12-2006, 11:51 AM   #42
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Re: House vs Retirement

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Originally Posted by lazygood4nothinbum
oh well, at least we got a nice playground and a ballfield for our gay softball league out of it.
Aha! So there was a nefarious plan all along...

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Re: House vs Retirement
Old 07-12-2006, 11:54 AM   #43
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Re: House vs Retirement

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Originally Posted by donheff
Agreed on both points.

Despite my post about working in Socal and retiring in Brentwood, I think it makes good sense to try to work where you would like to retire. I suspect Justin that what you like most about Brentwood is the community - the friends you have developed over the years - and that you are either already retired or plan to stay put when you do retire.
Well, I'm actually just 26, so I've got a few years till retirement. There are an however a number of retired folks in my neighborhood who are original residents from when they first bought in the neighborhood in the 60's. Some are starting to move away to retirement homes and/or die.
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Re: House vs Retirement
Old 07-12-2006, 11:56 AM   #44
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Re: House vs Retirement

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Aha! So there was a nefarious plan all along...

I was going to ask if straight folks had to switch teams to switch to this league. I decided not to ask, since I thought it might be insensitive.
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Re: House vs Retirement
Old 07-12-2006, 12:02 PM   #45
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Re: House vs Retirement

"...gay softball league..."? How do you know if a softball is gay or straight?

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Re: House vs Retirement
Old 07-12-2006, 12:07 PM   #46
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Re: House vs Retirement

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"...gay softball league..."? How do you know if a softball is gay or straight?
By the pitch. The straight one's a little lower pitch than the gay one.
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Re: House vs Retirement
Old 07-12-2006, 12:13 PM   #47
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Re: House vs Retirement

Quote:
Originally Posted by donheff
It is easier for many of us to become part of a community over time. That is why retirement gurus caution people about moving after retirement. What good does it do you to move to a nice, affordable place if you have a difficult time fitting in. If I ever consider moving I will rent for a while first to discover whether this is my dream place or someone else's.
DW and I feel the same way, that it is an advantage at retirement to already have a built-in network of friends, and a deep knowledge of your locale's finer points. But that's also in part because we intend our retirement life as more or less a continuation of our pre-retirement life, just with less work and more travel .

Maybe the fact that the career brought us to 3 different regions in 6 years makes the prospect of total makeover less appealing at this point.
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Re: House vs Retirement
Old 07-12-2006, 12:38 PM   #48
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Re: House vs Retirement

To go over some of the points that's been raised here…

Some of you mentioned that So Cal people shouldn't get the 2000+ sq house but live in a smaller house.* My in-laws have a 4 bed / 2 bath 1600sqft house in a good school district desirable area.* House is built in the 50s I think.* House is going for $750k.* My parents have a 3 bed / 2 bath 1900 sqft house in a lesser desirable area than inlaws.* Built in early 90s.* It's going for $725k.* In other parts of desirable area, 3 bed / 2 bed condo will be at least $500k and these are not newly constructed condos and probably 1,200 to 1,500 sqft.* So I think living in a modest house doesn't really work either.* Either get a house or rent and put the difference in retirement.

Salary adjustment for living in So Cal doesn't make up for housing price difference from other parts of the country.* In most professional jobs, unless you're a top candidate in a given field, I doubt an employer will pay you 50% or more for living in So Cal.

Yes, a lot of people I know basically are banking on their future house appreciation as a retirement.* They think that my house will be worth how ever much money and they would have paid off their mortgage by then.* My concern is that they still need a place to live and unless they're willing to sell it and go to another, you can't live off the equity on your house.* By the way, most of these people don't want to leave So Cal.* I guess when they become desperate, they can sell it and go somewhere but you've pretty much built up your life in So Cal and your kids are probably living around So Cal so it'll be difficult to just pick up and go.

For most of the non property owners in So Cal, I think it's either put in money for retirement or buy a house.* Oh and, if you're going to buy a house, both spouses have to work.
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Re: House vs Retirement
Old 07-12-2006, 12:54 PM   #49
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Re: House vs Retirement

Quote:
Originally Posted by HatePayingTaxes
To go over some of the points that's been raised here…
...
Yes, a lot of people I know basically are banking on their future house appreciation as a retirement.* They think that my house will be worth how ever much money and they would have paid off their mortgage by then.* My concern is that they still need a place to live and unless they're willing to sell it and go to another, you can't live off the equity on your house.* By the way, most of these people don't want to leave So Cal.* I guess when they become desperate, they can sell it and go somewhere but you've pretty much built up your life in So Cal and your kids are probably living around So Cal so it'll be difficult to just pick up and go...
The challenge with this approach is the cyclic nature of the housing market. Nationally, it has been a 14 year cycle, 7up and 7down. The recent unprecedented low interest rates have created a set of conditions unknown before in our working lifetimes. So I expect the cycle may be longer and the downward correction more severe.

This may be moot as I am pretty sure that the up cycle in So Cal is over. Like you say, even modest housing is over $700k. The only choice might be sell out and to rent something comparable for the next 8 years and then buy again. Ideally a purchase and leaseback but I imagine most buyers would not go for that. Keeping exposure to the sector during rental can be accomplished by buying stock in builders or REITs. At least those are liquid.
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Re: House vs Retirement
Old 07-12-2006, 12:56 PM   #50
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Re: House vs Retirement

HatePaying Taxes, your solution is to find a job in an affordable housing market. *There is a salary premium for LA so you may take a small pay cut, but you will have a life. *You can always visit your folks in LA. *
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Re: House vs Retirement
Old 07-12-2006, 01:07 PM   #51
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Re: House vs Retirement

Sometimes it feels like I am overpaying here (Tampa housing is very expensive, though not at SF or Miami or NY or Boston levels). Problem is, I really have nothing to compare it with.

House to house? No doubt I can get the same physical structure elsewhere for much less. But most lack at least some of the amenities I have here.

Location? Yup, I really like it here a lot. Has almost everything I enjoy. Other places may be great too, but ... most are even more expensive and have their own drawbacks.

Geography? Nothing dramatic but I sure love the beaches, the swampy parks, being 10 minutes from a big league airport.

Guess my point is that you can go round and round forever with this type of reasoning, but the residential housing market is very efficient. I'm getting what I'm paying for. We're happy.

And if and when the tradeoff stops working for us, we'll move.
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Re: House vs Retirement
Old 07-12-2006, 01:08 PM   #52
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Re: House vs Retirement

I work for a mini-mega corp nowadays (still same job, just after 9 mergers and aquisitions) and can provide an anecdotal comparison for a salary reference:
Atlanta - 94
Boston - 100
Miami - 91
San Diego - 116
San Jose -127
Chicago - 98
Texas - 87 (I think Dallas suburbs)

Meaning if I my position gets 100k per year in Boston, if I move to Miami I'll only get 91k.
Don't ask me where they took the data from.
As you see at least here the pay increase will not cover a huge housing price difference between let's say Atlanta (where you can get a house for let's say 150k) and San Diego or San Jose
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Re: House vs Retirement
Old 07-12-2006, 01:19 PM   #53
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Re: House vs Retirement

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Originally Posted by sailor

Meaning if I my position gets 100k per year in Boston, if I move to Miami I'll only get 91k.
Don't ask me where they took the data from.
Compensation managers contribute to salary surveys and they use that data to construct the table sailor posted.
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Re: House vs Retirement
Old 07-12-2006, 08:17 PM   #54
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Re: House vs Retirement

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Originally Posted by lazygood4nothinbum
we bring paint and brushes, a seedling or two. and we do the unspeakable act: we move next to a black family (or your local minority) and we landscape. shutter the thought.
Yup, problem is your do TOO GOOD of a job and then the Yuppy, DINKS discover that it is a "cool" neighborhood and it becomes just another expensive, boring place filled with to many BMWs.
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Re: House vs Retirement
Old 07-12-2006, 10:25 PM   #55
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Re: House vs Retirement

This has become an issue with low-income folks for a while.* First Hells Kitchen, then the Lower East Side, now Harlem and Oakland!* Is there no end to this??

I adored the immigrant Italians who lived in Hells Kitchen and looked up at the potential of the Harlem buildings in the 60s.* If the scum had not made the resident's lives so difficult they would have been great neighborhoods to live in.* IMHO at least 90% were good citizens struggling to provide for their families.
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Re: House vs Retirement
Old 07-13-2006, 03:34 AM   #56
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Re: House vs Retirement

There is a way to have a house and save for retirement in California: Rent the house. The ratio of PITI payment to rent is much higher in CA than in less affluent areas. Especially now when there seems to be widespread agreement that we're entering a sideways or downward real estate market, I really don't see why people are buying homes.

As ridiculous as CA real estate prices are, my perception is that they aren't growing as much in percentage terms as other areas. Home prices seem to be skyrocketing even more in places like Chicagoland and other heartland cities than in the Bay Area where I live.

There are actually many financial advantages to living in the Bay Area (coastal CA)... I don't need air conditioning, hardly spend anything on heating, and my property taxes are lower in both absolute and relative terms than most other places. Since most folks living here are wealthy, there isn't much crime so my car insurance rates are lower than most places, and I don't have to spend for security systems. Even healthcare premiums are a bit lower here than in less affluent areas. Home and car maintainence are cheaper because the mild weather doesn't destroy things. Not to mention there's no mosquitoes so no need to buy bugzappers and poison yourself with DEET. Because I can exercise outdoors I don't have to belong to a gym like people with real winters do. Because the roads are great I don't have to spend on a rugged vehicle as many in rural areas feel they do. No snow means no snow removal or snow travel costs. Living in an area with fairly high population density means I don't have to drive much to buy things or get services. And of course there are many great places to visit within driving distance, so I don't have to get on an airplane to do fun stuff.

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