I know that there's no crystal ball, but collectively this group is above average in real estate knowledge, so I thought I'd throw this scenario out there:
Our timeline to move back to California is 5-7 years, depending on whether I keep working in a much lower salary position upon return (5 year plan), or working part-time for a few years after returning (7 year plan). Basically the question is will we have around $2.5m or $3m saved, plus some money from pensions.
Assumption 1: Both plans' budgets are based on a 4% withdrawal rate and $75k in housing costs (roughly $6k per month)
- 5 year plan: annual budget is $100k from savings, plus $60-80k working full-time.
- 7 year plan: budget is $130k per year from savings & pension and $40-60k working part-time
Right now our non-housing expenses are about $70k per year. I'm going to assume it will be about the same, just to be conservative.
If we were going to move somewhere cheap, I'd of course not be worried as this would be a silly amount of money. Unfortunately none of the places we like are cheap.
Some specific questions:
1) what do you all think would be a realistic budget for a 2 bed, 2 bath house somewhere within an hour of the coast (i.e. not super hot / red)?
2) Is there any reason to consider buying a place now and renting it out to hedge against property inflation? I'd assume my lack of experience in the CA market and being out-of-state would make this a logistic non-starter, but appreciate any thoughts on this.
Thanks for your advice!