Buying a condo vs house in Orange County CA? Or keep renting?

[jeromedawg]

Hey all,

Just looking for some input on if you think a condo would make more sense in the current situation/climate, or if we should just hold off and keep renting... Here's some background:

- We sold our 3/2 condo (bottom floor unit) last year in August 2020 and moved further to south OC for the purpose of getting our kids into a school. As a side: The owners/tenants who rented above us progressively got worse as time went on  as far as noise is concerned, so this also helped with my sanity.
- We are currently renting a small 2/1 apartment within the school boundary (this was to guarantee our son's entrance as well as to give us time to feel the area out to make sure we wanted to live down here) with the rest of our stuff in storage. We're paying around $2227 for all this (rent + storage costs).
- We received confirmation in March that our son was accepted into the program (no longer have to live within the school boundaries for him to attend now that he's in)
- We start looking for SFHs in the general area (including outside the school boundaries) starting in Feb and put some offers in beginning in March but we were outbid every time (and by wide margins). These are homes that are in the $800-900k range.
- I started looked at condos in the area just in the past couple days, out of curiosity, and noticed that they don't seem to be garnering the same amount of attention or activity (I haven't seen many of these getting bid up in price the way SFHs are, if at all, which makes sense since I think detached SFHs are in way higher demand).
-  One of the condos that popped up is in a neighborhood right across the street from the school. It's a 3/2 (partial upper floor unit with a neighbor underneath and with shared walls on one side) with a loft and the HOA is high at $320 but includes water/trash/pool/playground/landscaping. We actually checked out some units in this neighborhood to rent last year and applied to rent a unit (for around $3000~) with the same floorplan as the one that just came on the market but someone else beat us to it. This one is going for $645k and comps in the same neighborhood went for asking or below in the $620k range between Dec-Feb. The upside to this, despite it being a condo, is the proximity to school (I'm much less inclined to be interested in condos that are any further away even if they cost slightly less - and for that to be the case you have to go pretty far)
- My job situation is questionable at the moment - not sure how much more time I have but I've been trying just to keep my head down and work; in the meantime getting my resume out and applying where I can (particularly for state jobs). My wife is SAHM but is doing some part-time contracting for a friend and can increase her hours, and she has also been talking about her interest in becoming an Instacart shopper. I'm researching alternate ways to build out some income streams in the meantime. If I do get laid off and find I'm having a hard time breaking back into the field, I've been thinking about what I could do as a career change (maybe home inspections, maybe a trade... who knows).

Obviously the condo is going to cost a lot less than a SFH and with certain trade-offs. If I put a sizeable downpayment down (say $450k or so), the PITI + HOA + estimated maint/repairs/capX + cost of utilities should end up costing less than what we currently pay in rent based on a quick calculation using a spreadsheet that factors in PITI and estimated overhead (utilities, maint/repairs, etc).
Coming from the condo we were in, I was so stuck on never buying a condo again or *at least* being in a bottom floor unit condo, but since the SFH market is a complete frenzy it doesn't leave many options.

In another thread I was giving some more specific numbers but basically, after all current spending month to month (averaged), we end up with around $3200~ most of which goes towards housing currently ($2227) and the rest just towards savings.

Or should we just keep renting and wait for the next "dip" (could be years before that point)? Being in a 2/1 is tight and moving up to a 3/2 would move us up at least to the $2800/mo range or close as far as rent is concerned and we would probably be further away from the school as well. We've also been talking about trying for a third kid.

EDIT: oh one other consideration: there's no yard whatsoever; just a couple of small balconies (one accessible from the living room and one from the master bedroom). So whatever grilling/smoking (food) I might have considered will not be an option. Not a deal-breaker for me (although I do like firing up the grill) but it would be nice for the kids to have a yard.  There are greenbelts and playgrounds in the community for them to run around and play on...

[six-car-habit]

  Will the hoped for state job pay the same, or close to what you are making in 'private industry' ?     I'd be leery of taking on a mortgage with a questionable job situation.

  What does an Instacart shopper do ??    I picture someone who works at a grocery store or department store or Target/Walmart - and when an order comes in - they go thru the aisles + find and pack up the items wanted and bring them to a 'staging' area. Then  the customer can drive in and pick up, or it gets sent to the purchaser's home by delivery driver.   Would this pay more than what she would get , if she just increased her billable contracting hours with her friends business ?

  If my heart was set on finding a single family home, i'd find it hard to buy another condo.  It's like trading an Accord for a Camry, with all the attendant shopping, selling, and transaction cost hassles - when the family really wanted an SUV / minivan.

[mozar]

So much is in the air for you. How about waiting until the third kid is here before making a decision?

[jeromedawg]

  Will the hoped for state job pay the same, or close to what you are making in 'private industry' ?     I'd be leery of taking on a mortgage with a questionable job situation.

  What does an Instacart shopper do ??    I picture someone who works at a grocery store or department store or Target/Walmart - and when an order comes in - they go thru the aisles + find and pack up the items wanted and bring them to a 'staging' area. Then  the customer can drive in and pick up, or it gets sent to the purchaser's home by delivery driver.   Would this pay more than what she would get , if she just increased her billable contracting hours with her friends business ?

  If my heart was set on finding a single family home, i'd find it hard to buy another condo.  It's like trading an Accord for a Camry, with all the attendant shopping, selling, and transaction cost hassles - when the family really wanted an SUV / minivan.

If I were to get a job with the state, it would *likely* be a pay-cut but the YOY promotions/raises they give seem to keep slightly ahead of inflation from what I've seen. And I believe benefits are very good too.

Instacart shoppers are similar to Grubhub/UberEats/DoorDash except in addition to delivering groceries they shop for them as well. But Instacart has partnered with some stores where someone in the store with gather all the groceries and you can drive up and pick the groceries up (a few stores are actually offering this service as well). In terms of pay, I think it varies but may range from $15-20 per batch of groceries delivered. This doesn't include tips. I think the pay widely varies and is probably based on your locale. So if you're delivering to more affluent neighborhoods, you likely will get tipped more. She probably would get paid as much as what she gets paid contracting. I think she's paid $25 for admin/office assistant type work. She did let her friend know that she's open to more work so I think, slowly, she's going to give more. She also asked her friend to check with her clients as far as if any of them need the same type of help but we haven't heard back. My wife has also posted availability for tutoring on Nextdoor but nothing has come of it - one person asked for help then flaked out after she gave us the wrong phone number (off by a digit) and stopped responding to private messages. Another person asked for help but was strictly demanding in-person help (not gonna happen with COVID right now) because she was sharing how her daughter is struggling in math via virtual class.

I know what you're saying about "settling" - I was thinking about this situation more as a 'transitionary' phase (where at a later time we could either sell or rent out and get into a SFH when things aren't so crazy in *that* market) but we could also be stuck in the condo for a long time if things don't work out. 

So much is in the air for you. How about waiting until the third kid is here before making a decision?

Yea, we may do that. Of course, our parents are all pressuring us into buying a home first THEN trying for the kid. But that could get us into some trouble... the biggest proponent of this is my in-laws (and particularly MIL) and they haven't *never* been great with finances (they took a mortgage they couldn't afford in 2004 with a shady mortgage company and then were forced into refi'ing into an ARM/shared appreciation loan just so they could afford the monthly payments... but there's going to be a big payout that goes to the loan company - 25% of the appreciation). So nearly every suggestion they give us, we basically just roll our eyes and ignore. My mom has the same thought process though: "Get settled into a home FIRST then worry about having your kid" - it kind of makes sense, if you're in a position where you can just go buy a home without a worry in the world.

[Laserjet3051]

The choice of condo vs SFH is a lifestyle choice that only you can make. In many cases the impact of having neighbors on the other side of your walls, or worse, on the other side of your floor or ceiling cannot be understated. It may be that all 4 of the adjoining properties are inhabited by senior citizens that sleep all day and night. But I wouldnt bank on it. Peace and quiet especially during my sleep is an uncompromising feature of where I choose to live. The SFH I purchased last year affords me 100% complete peace and quiet 24/7 and is priceless...for me. The other major lifestyle choice is the yard, especially with kids. Sure, the parks are near, and if close enough and large enough could replace the condos nonexistent yard, but only in part. There are things I do in my yard that would be impossible to do in a park. YMMV.

edited to add that townhomes in S. OC can reduce the # of adjoining walls/noise and lack of yard. Have you considered these vs condos?

[jeromedawg]

The choice of condo vs SFH is a lifestyle choice that only you can make. In many cases the impact of having neighbors on the other side of your walls, or worse, on the other side of your floor or ceiling cannot be understated. It may be that all 4 of the adjoining properties are inhabited by senior citizens that sleep all day and night. But I wouldnt bank on it. Peace and quiet especially during my sleep is an uncompromising feature of where I choose to live. The SFH I purchased last year affords me 100% complete peace and quiet 24/7 and is priceless...for me. The other major lifestyle choice is the yard, especially with kids. Sure, the parks are near, and if close enough and large enough could replace the condos nonexistent yard, but only in part. There are things I do in my yard that would be impossible to do in a park. YMMV.

Agreed -this is part of the dilemma. It's a very "pay to play" mentality around here with prices the way they are. I understand that people who live on a bottom floor unit are the ones who decided to live there and shouldn't be complaining about it... however, coming from that place, I know how frustrating it *can* be - maybe when first moving in you didn't realize how bad the sound could be in a bottom floor condo unit since this is the first place you bought? Call them naïve, but it doesn't change anything regarding noise and tolerance.  I guess you could tell them "if you don't like it maybe you should move" but I'd rather them come to that conclusion themselves lol. The place we sold, the last tenants were the ones waking me up rather than my alarm clock... and the husband had a short fuse and you could hear him cussing through the walls. It was a massive downgrade in quality of life - they moved in like April of 2020 and it wasn't even a couple months and I was going crazy. We were out by end of July/August.

[Fish Sweet]

I'm not sure where exactly in OC you're moving to (and of course you don't have to specify) but do you think a town home would work for your family needs?  It would probably solve the potential problems of inconsiderate above/below neighbors, and you may very well get a lil patio space for grilling or a bit of outdoors play space too.  There is the problem of stairs, if that might post a tripping hazard for your kids.

Another thing to note is that SFH may not prove to be a solution for noise issues.  My stepmom's neighbors on two sides are families with young children, and the childish screaming goes on until midnight every day.

[jeromedawg]

I'm not sure where exactly in OC you're moving to (and of course you don't have to specify) but do you think a town home would work for your family needs?  It would probably solve the potential problems of inconsiderate above/below neighbors, and you may very well get a lil patio space for grilling or a bit of outdoors play space too.  There is the problem of stairs, if that might post a tripping hazard for your kids.

Another thing to note is that SFH may not prove to be a solution for noise issues.  My stepmom's neighbors on two sides are families with young children, and the childish screaming goes on until midnight every day.

We're in the Laguna Niguel area.

LOL true on the SFH thing - I've heard the horror stories of neighbors whose kids have garage bands or the kid who is learning drums :O

A townhome might work out for us and might be what we end up having to 'settle' with if anything. They are considerably more expensive than condos but not as much as SFHs. I think the market is a little too heated right now for SFHs and townhomes for us to really want to try. There are actually some detached townhomes in the same neighborhood that this condo is in but none for sale currently. But yea, sharing a wall is preferred to being below or above a neighbor.