Sweat equity, time, money considerations shopping for primary home?

[jeromedawg]

Hey all,

We are in the process of looking for a primary residence (coming from renting currently and having sold our condo last year). I was wondering what your guys' takes are on purchasing a fixer versus just going turnkey. This is in a pretty HCOL area (Orange County SoCal) - inventory is highly limited and pricing is just insane (people overbidding on market by margins of $50k+ depending on the specific area).

While the idea of buying into a fixer is somewhat appealing it sounds like a potential nightmare: 1) we would be renting and living at the current place while 2) paying the carrying costs (mortgage) on the fixer and 3) spending money and or time on the capital improvements and major renovations. 3 would be factored into whatever the offer price is but I'm thinking in ranges that are $50k-100k over, and we have no prior experience project managing something of this scale.

Turnkey sounds great, except for that fact that people are more willing than ever to compete and outbid one another for the convenience of it. I could see this going down the road of the temptation to say "it's okay, let's just overextend" 


How many of you, as far as your primary goes, would be willing to buy something needing major renovations and how do you determine what a "fair offer" looks like (in a competitive market) if you were to go this route?

[Dicey]

Lol, our house was "turnkey", yet we've still managed to do plenty of projects on it over the last seven years. Ours was "done", but we bought it on a short sale, so we got a pretty good deal. We have zero interest in buying a "lipstick on a pig" flip. I don't want to pay for someone else's choices and/or taste (or lack thereof).

In your shoes, I'd keep my powder dry for another year. The current CA market is insane bat-shit crazy. Why wade into the fray when you don't have to?

[jeromedawg]

Lol, our house was "turnkey", yet we've still managed to do plenty of projects on it over the last seven years. Ours was "done", but we bought it on a short sale, so we got a pretty good deal. We have zero interest in buying a "lipstick on a pig" flip. I don't want to pay for someone else's choices and/or taste (or lack thereof).

In your shoes, I'd keep my powder dry for another year. The current CA market is insane bat-shit crazy. Why wade into the fray when you don't have to?

Hahaha... I suppose there are different levels of "move-in ready" and "turnkey" :D And with houses, it's just the proverbial to-do list that never ends.

Honestly, it's hard to see that there will be much 'relief' with the market anytime soon. If it were to 'settle down' in another year or two I'd be really surprised. Whatever a "correction" means I just take it to mean that maybe there will be fewer competitors so the price won't be bid up as insanely as $100k but instead the overbidding will occur at a more "reasonable" (according to those still willing to pay more) range, like $25-30k....LOL the outlook doesn't seem very hopeful at this rate.

[SunnyDays]

I suspect that what people call “fixer-upper” in a HCOL area might be what is move in ready anywhere else.  You have to differentiate between perfectly liveable if a bit/lot outdated versus new high end finishes (hardwood floors, granite countertops etc).  It’s easy to get caught up in improvements to the point where every luxury suddenly becomes a necessity and before you know it, you’ve spent 50-100K more than you meant to.  And you know what?  In 5 years it will all be outdated anyway.  It’s better to buy a solid structure that needs reasonable work, like paint, window coverings, new flooring and cabinets for cosmetic reasons but is perfectly functional as is.  Once you’ve lived in the house awhile and all your own stuff is in it, updating will stop seeming so urgent and you can take your time to do the things that really matter to you at a reasonable cost.  That way, when various aspects are different ages, you avoid the look of a whole house stuck in a time warp.

[jeromedawg]

I suspect that what people call “fixer-upper” in a HCOL area might be what is move in ready anywhere else.  You have to differentiate between perfectly liveable if a bit/lot outdated versus new high end finishes (hardwood floors, granite countertops etc).  It’s easy to get caught up in improvements to the point where every luxury suddenly becomes a necessity and before you know it, you’ve spent 50-100K more than you meant to.  And you know what?  In 5 years it will all be outdated anyway.  It’s better to buy a solid structure that needs reasonable work, like paint, window coverings, new flooring and cabinets for cosmetic reasons but is perfectly functional as is.  Once you’ve lived in the house awhile and all your own stuff is in it, updating will stop seeming so urgent and you can take your time to do the things that really matter to you at a reasonable cost.  That way, when various aspects are different ages, you avoid the look of a whole house stuck in a time warp.

This seems reasonable. There's one house that we just looked at today that kind of fits this picture. At face-value it appears like it's "an investor's/fix n flipper's dream" but if you really think about it you could totally get away with just installing new flooring, paint (interior and exterior), removing one or two paneled walls, and maybe scraping off the acoustic ceilings. The more major items would be updating the kitchen space (it's tiny) and perhaps the bathrooms (definite concerns with mold and rust just from peeking in at least one). The most recent thing they did was update the windows. One of the tenants who was in the house at the time also said mentioned a slab leak upstairs that was repaired in the past 4 years. The layout of the house we found a bit odd and I think would be better served if certain walls were taken down or opened up but other than that it seems like it could work. Only other 'concern' would be the immediate area and neighbor next door, whose house looks really dated and partly dilapidated. They have a pool next story that's been drained and the backyard looks like bit of a mess. Most of the other neighbors around there seem OK though.

Actually, when I look back through the list I came up with and started roughly pricing it out, the price of things starts going up very quickly LOL. I'm estimating for just paint/acoustic ceilings alone to probably end up at $15-20k and flooring probably falling between $10k-15k. There are a couple walls that really need to come down where the kitchen is and where the formal dining room meetings the living room. I think the best choice is usually to take down walls before updating any sort of flooring. If either of these walls are load bearing, that would shoot the costs up even more. Not to mention updating the kitchen itself. So maybe this isn't the house to go after LOL

[Dicey]

Have you priced a 2x4 lately? Demand for housing may continue for a while, but cost and availability of materials should start to stabilize eventually. Or maybe not. My crystal ball is in the shop.

[SunnyDays]

Never be in a hurry to buy a house.  There will always be more coming on the market.  Don’t “make it work” if it doesn’t.  List your absolute must haves and would like to haves as a starting point and the absolute maximum you want to spend all told and don’t budge from that.  Assuming you plan to stay in the house a while, there will be time down the road to do the smaller things.  You can budget for them slowly.

ETA:  look at LOTS of houses. Even if you don’t think they fit your exact criteria.  It will give you a better idea of what you want, what you don’t want and what things are major vs minor fixes.  Get as much input from the agents as you can.  They see tons of houses and generally have a lot of knowledge about actual homes and not just the selling/buying process.

[jeromedawg]

Never be in a hurry to buy a house.  There will always be more coming on the market.  Don’t “make it work” if it doesn’t.  List your absolute must haves and would like to haves as a starting point and the absolute maximum you want to spend all told and don’t budge from that.  Assuming you plan to stay in the house a while, there will be time down the road to do the smaller things.  You can budget for them slowly.

ETA:  look at LOTS of houses. Even if you don’t think they fit your exact criteria.  It will give you a better idea of what you want, what you don’t want and what things are major vs minor fixes.  Get as much input from the agents as you can.  They see tons of houses and generally have a lot of knowledge about actual homes and not just the selling/buying process.

In terms of budgeting for max amount to spend, isn't that going to change (in accordance with appreciation and inflation) if you wait too long? We're just trying to figure out the whole timing aspect of this. Looking back at prior years we've "shopped" for homes, everything seemed to expensive back then and now when we look back we regret not having just plunked down and bought something. *This* has been the struggle for us. When the market was down in 2010-2013~ we looked at a bunch of homes but were too picky about them - we were also indecisive and naïve. This same trend continued for a while. I think part of it was that we were in our condo and were more or less 'satisfied' with that at the time. It wasn't until we had kids that we gave it more serious thought, and especially now that we've sold that condo and are now renting, we sort of feel like we have to scramble in a sense.

[jeromedawg]

Have you priced a 2x4 lately? Demand for housing may continue for a while, but cost and availability of materials should start to stabilize eventually. Or maybe not. My crystal ball is in the shop.

Haven't been tracking lumber costs. Are they significantly higher now? Don't you think the increase on minimum wage is going to trickle down through inflation all the more?

[SunnyDays]

Yes, well prices will rise over years, or maybe less, depending on where you live, but unless your income is keeping up, you will still be able to afford only so much.  That means you can buy less house over time, so if you are certain you actually want a house now, then you might have to jump on something less than ideal for you if you don’t want to be priced out entirely.  If that’s the case, I would go for something that is towards the top end of your budget and stay in it as long as possible.  But definitely still focus on the must haves, because there’s nothing worse than dumping all that money on pretty bells and whistles only to find it doesn’t meet your core needs.

[Another Reader]

Patience, grasshopper.  Interest rates are going up.  That's going to remove buyers from the pool.  Prices will stabilize and inventory will increase.  As long as you can qualify, this is a good thing.  Besides, what's your job situation - still looking?

[jeromedawg]

Patience, grasshopper.  Interest rates are going up.  That's going to remove buyers from the pool.  Prices will stabilize and inventory will increase.  As long as you can qualify, this is a good thing.  Besides, what's your job situation - still looking?

Still looking but feeling less hopeful over time. At this point I'm looking at a likely pay cut if I do make a move, but 'warranted' in the sense that I'd be looking for a state or county job which presumably *should* provide a lot more stability in exchange for that pay cut. I think it's a slow process with the state or county but I've already gotten rejected once for a position with a local water district. I've already told my wife to prepare herself for the very real possibility of having to move out of state - this is becoming more a reality, I think, as days pass on and things don't pan out where we're at now. We would likely have to convince her parents to move with us as we're their only lifeline down here (that but they also really need to exit their current situation with the balloon shared appreciation loan on their current trap of a home before the mortgage ends within in the next 15 years.)

Yes, well prices will rise over years, or maybe less, depending on where you live, but unless your income is keeping up, you will still be able to afford only so much.  That means you can buy less house over time, so if you are certain you actually want a house now, then you might have to jump on something less than ideal for you if you don’t want to be priced out entirely.  If that’s the case, I would go for something that is towards the top end of your budget and stay in it as long as possible.  But definitely still focus on the must haves, because there’s nothing worse than dumping all that money on pretty bells and whistles only to find it doesn’t meet your core needs.

Yea, the inventory that *should* be at the top of our budget is close to non-existent. The ones out there that are around the top-end of our budget are getting pushed over by margins of $50-100k easily (unless it's a fixer upper). So pretty much it goes like this: right now if you want to buy a "turnkey" home listed for $850, expect to pay at least $900-950k depending on how "turnkey" it is: average to below average turnkey is in that +$50k range.  And above average to excellent is anywhere between $50k and $100k. The problem is that when one home comes on the market, you have so much activity on it that you almost don't even want to try...

[SunnyDays]

If prices are so high that you would never be able to pay off the house, it would make more sense to either move somewhere else or just continue to rent.

[jeromedawg]

If prices are so high that you would never be able to pay off the house, it would make more sense to either move somewhere else or just continue to rent.

I might be off on my math but I'm looking to put anywhere from $300-400k down and prefer not to go over $900k for a place on the high-end. I qualify for a much larger loan but I'm not going to do that. Places in this area, on average, have appreciated 2% YOY. I think prior to the madness, you'd be able to find a decent 4/2 in the $750k-850k range and with that type of appreciation I think it would still have been reasonable to buy IF that were still the case. The way things are now, people are overbidding and to the tune of 10%+... artificial appreciation!!!

[Paper Chaser]

You have three basic choices:
1) Pay more than you want to now, in order to get what you want now.
2) Sacrifice some things that you want in order to prioritize the budget. Either give them up completely, or buy the place that will allow you to add the things you want over time as you can afford it.
3) Don't participate in this market and continue renting, or expand your search to places with a cheaper COL

Considering the theme of the site you're posting this on, and the fact that your job future is uncertain, I'd probably avoid option number 1. That leaves you with a choice between 2 options. General questions you should be asking yourself: How handy are you? How willing are you to live in a potential construction site while work is being done on your home to make it more like what you want? How willing are you to just keep renting? How willing are you to expand your search to other locations where you might get more of what you want? You just have to have a very clear list of "needs" vs "wants" and then follow that.

[theoverlook]

I'm always happy to buy something that needs some repairs, but my previous house was ready to move into and that ended up being a great choice at the time. However, stuff like "removing walls" isn't a minor thing - at that point you're pretty much into a gut rehab. I would avoid that unless the location was absolutely perfect.

I would never buy a house when job shopping. Get the job situation figured out first. That is when you need the most flexibility. Even just the job being on a different side of town can make what seemed like a perfect place turn into a nightmare of hour long commutes.

[jeromedawg]

I'm always happy to buy something that needs some repairs, but my previous house was ready to move into and that ended up being a great choice at the time. However, stuff like "removing walls" isn't a minor thing - at that point you're pretty much into a gut rehab. I would avoid that unless the location was absolutely perfect.

I would never buy a house when job shopping. Get the job situation figured out first. That is when you need the most flexibility. Even just the job being on a different side of town can make what seemed like a perfect place turn into a nightmare of hour long commutes.

You have three basic choices:
1) Pay more than you want to now, in order to get what you want now.
2) Sacrifice some things that you want in order to prioritize the budget. Either give them up completely, or buy the place that will allow you to add the things you want over time as you can afford it.
3) Don't participate in this market and continue renting, or expand your search to places with a cheaper COL

Considering the theme of the site you're posting this on, and the fact that your job future is uncertain, I'd probably avoid option number 1. That leaves you with a choice between 2 options. General questions you should be asking yourself: How handy are you? How willing are you to live in a potential construction site while work is being done on your home to make it more like what you want? How willing are you to just keep renting? How willing are you to expand your search to other locations where you might get more of what you want? You just have to have a very clear list of "needs" vs "wants" and then follow that.

Agreed - I don't think we can afford to do #1. But #2 we might be able to pull off - what I'm currently struggling with understanding is how much is "too much" when it comes to overpaying? More than $5k-10k? More than $10k-15k? Over $20k? Even if it's highly desirable turnkey? lol
I'm currently looking at a home that just popped up at $775k and it looks to be average or maybe slightly below average turnkey (from the pics) - it could use some work but we could probably just move in and start living there if we wanted to (again, need to verify in person). Barring any major issues, it seems most of the immediate work would be centered around improving the curb appeal and cleaning up the front (and backyard) as well as probably getting new paint and removing wallpaper. Flooring and other stuff is OK and could probably just be updated later. They have it listed for what the Redfin estimate is, and it's considerably lower than other units in the area.
The most recent comp sold last month for $880 and has a 3 car garage and looked above average-to-excellent turnkey based on the pictures. Whoever got that one seemed to have gotten a pretty good deal for this area... unless it was a closed/private/family sale or something. What's weird about that is that they listed it for above $900k beginning of 2020 and seemed desperate to get rid of it and kept lowering the price month after month until it got down to $890k. It says it was sold in June or $890k but then after that shows it was sold for $880k - https://www.redfin.com/CA/Laguna-Hills/24672-Kim-Cir-92653/home/4848380 (this isn't the property we're looking at - just the most recent comp in the area) - Not quite sure what to make of it.

[Paper Chaser]

I guess it depends how you define "over paying". Since list prices are really just a start to negotiations, and not the actual value of a property. To me, you're only overpaying if a bank won't lend you the agreed upon amount. So if you agree to buy a property for $800k, and the appraisal comes back at $775k, but you keep the original agreement and pay another $25k out of pocket, then I'd say you overpaid. But if you agree to buy a place for $800k, even though you feel like it's not worth that much, that's not really overpaying IMO, it's just your gut telling you the place is expensive.

We just passed 5 years of ownership for our place. I thought we'd gotten an ok deal when we bought it, but as first time home buyers, it still felt very expensive, and was more than I really wanted to spend when we began our house search. It was purchased with some renovations in mind, which only made it feel more expensive because we knew we'd have to spend more to get it where we wanted. We took about 6 weeks and worked on it ourselves before moving in. Took out a wall, chiseled out a small section of really ugly tile and laid new flooring in many places, all new paint, some drywall work that we farmed out, a couple of new kitchen appliances that needed to be replaced, added lighting, etc.

Now, the tax assessed value of our property is 1.75 times what it was when we bought it, and the real estate web sites all estimate it's value to be about 1.65 times what we paid just 5 years ago, and this is in a LCOL area. During that time, our household income is up about 50% too, so what felt "expensive" to me 5 years ago is looking pretty good in hindsight. Of course that's almost entirely luck, being patient when choosing a location/neighborhood, coupled with some sweat equity during a few brutal weeks of paying to live in two places.

[robartsd]

I think it takes a lot of looking and a lot of patience to find a reasonable deal; but it also takes quick acting to secure the deal. I was casually looking at the market on Zillow for quite a while before we purchased. Early in that period I did see one place that I think would have been a good deal to jump on, but I didn't have enough knowledge of the market to make a move. At some point I mentioned following the market on Zillow and a real estate agent from my church recommended I follow on Redfin instead (she had no association with Redfin, but knew that it was much better at staying up to date). When I saw a property that I thought was worth looking at again, I contacted her and she recommended looking at it right away and we set up an appointment to see it with her. We did put in an offer, but it didn't get any traction.

That started our active looking period. We visited a number of houses with her or her assistant (mostly ones she picked) and did get into the process of buying one that we ended up backing out of. We certainly seemed to be in less hurry to buy a property that she was to sell one, so our active looking visiting properties slowed down quite a bit; but we found a listing on Redfin we were interested a month or so later and ended up buying it using that agent. I'm pretty confident that I'm much happier with the place we ended up buying than I would have been with the one we backed out of. Our agent added value by 1) pointing us to a source of up-to-date listing information, 2) advising us on things to do to check out a property (visit at different times of day, talk to neighbors), 3) negotiating, 4) suggesting going to open houses (even for properties that we wouldn't seriously be interested in) as a way to get to know the market better). I did not find any value from our agent trying to select properties that we might want to look at. I'm indifferent on the value the agent provided as far as recommending other professionals (we did go with the agent's recommendation for mortgage broker and inspector and they were reasonable).

Our house was basically livable, but needed work (most of the work still is needed 5 years later). I'm feeling pretty confident about eventually getting the landscaping taken care of as DIY projects. We probably will need to hire out some projects that will be major disruptions at some point.

I'm currently looking at a home that just popped up at $775k and it looks to be average or maybe slightly below average turnkey (from the pics) - it could use some work but we could probably just move in and start living there if we wanted to (again, need to verify in person). Barring any major issues, it seems most of the immediate work would be centered around improving the curb appeal and cleaning up the front (and backyard) as well as probably getting new paint and removing wallpaper. Flooring and other stuff is OK and could probably just be updated later. They have it listed for what the Redfin estimate is, and it's considerably lower than other units in the area.

This sounds like the kind of place I'd be eager to get a closer look at.

[jeromedawg]

I think it takes a lot of looking and a lot of patience to find a reasonable deal; but it also takes quick acting to secure the deal. I was casually looking at the market on Zillow for quite a while before we purchased. Early in that period I did see one place that I think would have been a good deal to jump on, but I didn't have enough knowledge of the market to make a move. At some point I mentioned following the market on Zillow and a real estate agent from my church recommended I follow on Redfin instead (she had no association with Redfin, but knew that it was much better at staying up to date). When I saw a property that I thought was worth looking at again, I contacted her and she recommended looking at it right away and we set up an appointment to see it with her. We did put in an offer, but it didn't get any traction.

That started our active looking period. We visited a number of houses with her or her assistant (mostly ones she picked) and did get into the process of buying one that we ended up backing out of. We certainly seemed to be in less hurry to buy a property that she was to sell one, so our active looking visiting properties slowed down quite a bit; but we found a listing on Redfin we were interested a month or so later and ended up buying it using that agent. I'm pretty confident that I'm much happier with the place we ended up buying than I would have been with the one we backed out of. Our agent added value by 1) pointing us to a source of up-to-date listing information, 2) advising us on things to do to check out a property (visit at different times of day, talk to neighbors), 3) negotiating, 4) suggesting going to open houses (even for properties that we wouldn't seriously be interested in) as a way to get to know the market better). I did not find any value from our agent trying to select properties that we might want to look at. I'm indifferent on the value the agent provided as far as recommending other professionals (we did go with the agent's recommendation for mortgage broker and inspector and they were reasonable).

Our house was basically livable, but needed work (most of the work still is needed 5 years later). I'm feeling pretty confident about eventually getting the landscaping taken care of as DIY projects. We probably will need to hire out some projects that will be major disruptions at some point.

I'm currently looking at a home that just popped up at $775k and it looks to be average or maybe slightly below average turnkey (from the pics) - it could use some work but we could probably just move in and start living there if we wanted to (again, need to verify in person). Barring any major issues, it seems most of the immediate work would be centered around improving the curb appeal and cleaning up the front (and backyard) as well as probably getting new paint and removing wallpaper. Flooring and other stuff is OK and could probably just be updated later. They have it listed for what the Redfin estimate is, and it's considerably lower than other units in the area.

This sounds like the kind of place I'd be eager to get a closer look at.

Thanks! We are planning to look at the property tomorrow hopefully. A few other odd things I noticed about it that are probably really not deal breakers:
1) the home is pretty close to a major freeway (there are high walls to shield some noise but I still anticipate some noise otherwise). I've read articles about studies they've done correlating Autism in kids with the vicinity in which they live to freeways (basically implying that living near a freeway isn't good). I'm wondering if this has an impact on the home price. https://www.sciencedaily.com/releases/2019/04/190409164002.htm

2) it looks like the upstairs master bath only has a large round bath tub/jacuzzi but no shower (from the looks of it). Not sure what it would cost to add a shower head and doors or convert it to a regular shower/tub but

3) upstairs master bath also has a weird bay window that just feels awkward there - it looks weird from the outside to. this is probably the most minimal of issues

Besides that, multiple rooms are painted different colors so I'd prob want to repaint a single color throughout. At least one room has popcorn ceiling that I'd want to consider getting scraped off too.

I have a feeling this is one of those properties that has a lot of potential but it's "preferred turnkey" that many buyers are looking for, and thus (hopefully) it would get less looks and interest. Functionally, I think it would fit our needs. But the freeway thing does concern me a bit. I've never lived that close to a freeway.

[jeromedawg]

I guess it depends how you define "over paying". Since list prices are really just a start to negotiations, and not the actual value of a property. To me, you're only overpaying if a bank won't lend you the agreed upon amount. So if you agree to buy a property for $800k, and the appraisal comes back at $775k, but you keep the original agreement and pay another $25k out of pocket, then I'd say you overpaid. But if you agree to buy a place for $800k, even though you feel like it's not worth that much, that's not really overpaying IMO, it's just your gut telling you the place is expensive.

We just passed 5 years of ownership for our place. I thought we'd gotten an ok deal when we bought it, but as first time home buyers, it still felt very expensive, and was more than I really wanted to spend when we began our house search. It was purchased with some renovations in mind, which only made it feel more expensive because we knew we'd have to spend more to get it where we wanted. We took about 6 weeks and worked on it ourselves before moving in. Took out a wall, chiseled out a small section of really ugly tile and laid new flooring in many places, all new paint, some drywall work that we farmed out, a couple of new kitchen appliances that needed to be replaced, added lighting, etc.

Now, the tax assessed value of our property is 1.75 times what it was when we bought it, and the real estate web sites all estimate it's value to be about 1.65 times what we paid just 5 years ago, and this is in a LCOL area. During that time, our household income is up about 50% too, so what felt "expensive" to me 5 years ago is looking pretty good in hindsight. Of course that's almost entirely luck, being patient when choosing a location/neighborhood, coupled with some sweat equity during a few brutal weeks of paying to live in two places.

Are you saying that paying more than the appraised value is "overpaying" then? In this market it seems commonplace for offers to be made over whatever the likely appraisal is.

Or do you mean to say that if you agree to keep the original agreement of paying the $800k over the $775k list and appraisal value AND pay an additional $25k out of pocket (like for additional renovations, repairs, etc)  that *this* would be overpaying?

[SunnyDays]

I looked at the comp house you linked and I have to ask, do you really need that much house?  There’s a lot of wasted space, with basically an extra living room where the furniture looks lost in it, empty stairwell space and 3 bathrooms.  It could easily fit a family of 6 at least.  There are many extra costs associated with that big of a house.  I know American houses have grown over the last 20 years or so, so maybe people’s perception of what is normal is skewed, but most of the people I know live in houses about 1200 sq ft with 4 family members.

[jeromedawg]

I looked at the comp house you linked and I have to ask, do you really need that much house?  There’s a lot of wasted space, with basically an extra living room where the furniture looks lost in it, empty stairwell space and 3 bathrooms.  It could easily fit a family of 6 at least.  There are many extra costs associated with that big of a house.  I know American houses have grown over the last 20 years or so, so maybe people’s perception of what is normal is skewed, but most of the people I know live in houses about 1200 sq ft with 4 family members.

That's not the house - that was just a comp in the same area that I was looking at to compare with. The house I'm looking at is this one: https://www.redfin.com/CA/Laguna-Hills/24945-Sara-Ln-92653/home/4847881

[SunnyDays]

Yes, I understood that.  This one is nice, but in my opinion, still seems unnecessarily large.  Is it worth the trade off in terms of FIRE to you?  What can you get for say 450 - 500K?

[jeromedawg]

Yes, I understood that.  This one is nice, but in my opinion, still seems unnecessarily large.  Is it worth the trade off in terms of FIRE to you?  What can you get for say 450 - 500K?

I think FIRE is not *as* an important a factor at this time as I think about things more... at least not immediately.
This given that our current priorities are for the kids' schooling, stability in a place to call our own, and still not being far from our extended families (in-laws are 1.5 hours away). I think we are willing to make the trade-off that we may have to work a little longer to pay things down. We still have a significant stache saved up outside of this as well. $450-500k might be able to get you anywhere from a 1/1-2/2 condo in this area. For background/reference: we moved out of a 3/2 condo that had become unbearable to live after so long being on the bottom floor (combination of poor design/remodel of the upstairs flooring and inconsiderate neighbors) and we currently are in a 2/1 apartment which is *workable* for the current circumstances but not long term especially if I want to continue remote work/WFH (whether W2 or self-employed). There are many times where I just need space behind a closed door and quiet to work. We are considering trying for one more kid too which means 2 bedrooms will no longer be viable as we prefer to not have 3 kids of different sexes sharing the same room over the long haul). Also, in light of the experience of having shared/common walls/ceilings we absolutely do not want to go through that experience again whether we're in an upper unit or bottom unit. I don't want to be subject to noisy neighbors above or to the side (blasting music etc) and I also don't want to have people knocking on my door complaining that we're too loud (I went through nearly a decade of this and enough is enough).

Another thing to note is that places that are in the $400-500k price range are few and far between but if they exist they are either A) in a 55+ community, so not even a consideration or B) have higher HOAs (to the tune of *at least* $200-300/mo minimum and upwards).

[cchrissyy]

I think you should back off the home search until you have decided about changing jobs and about the idea of a big move somewhere LCOL.  It doesn't make sense to look at specific local houses when you have those huge question marks.

[jeromedawg]

I think you should back off the home search until you have decided about changing jobs and about the idea of a big move somewhere LCOL.  It doesn't make sense to look at specific local houses when you have those huge question marks.

The #1 preference right now is to stay put and try to stretch things out as long as I can with the work situation until I find something more favorable (whether in more pay or much more stability [at the expense of a bit of a pay cut]).
Right now I'm mostly being picky about other jobs - I'm not in a position of desperation where I've lost my job... at the same time, it *feels* like there's some writing on the wall but nothing is certain (I could be 'safer' than I think for all I know).

Moving out of state would probably come off the back burner and to the front in the case that A) the housing market continues like it is now and gets worse in terms of cost of entry AND OR B) if I lose my job and severance runs or or I don't get any and can't find any work for an extended period of time (say more than 2-3 months).

[robartsd]

I agree that you sound like you have more important decisions to make before deciding on a house; you still might benefit from learning about the market though paying attention to this one though.

The freeway noise certainly would be a negative; I'm not sure how much this affects property value. I'd expect houses closer to the park near the center of the neighborhood to be worth somewhat more than similar houses near the edge by the freeway; but I'm not sure by how much. The curb appeal on that listing is relatively poor (which I like - relatively easy to improve and will be a turn off for some buyers). The lack of a shower in the master bath would be a big lifestyle negative for a lot of people (and somewhat expensive to change). That house looks like the prior owner loved private gardening (condition of rear yard is looks much more cared for than front yard, the master bath window looks like it was designed for lots of potted plants).

[jeromedawg]

I agree that you sound like you have more important decisions to make before deciding on a house; you still might benefit from learning about the market though paying attention to this one though.

The freeway noise certainly would be a negative; I'm not sure how much this affects property value. I'd expect houses closer to the park near the center of the neighborhood to be worth somewhat more than similar houses near the edge by the freeway; but I'm not sure by how much. The curb appeal on that listing is relatively poor (which I like - relatively easy to improve and will be a turn off for some buyers). The lack of a shower in the master bath would be a big lifestyle negative for a lot of people (and somewhat expensive to change). That house looks like the prior owner loved private gardening (condition of rear yard is looks much more cared for than front yard, the master bath window looks like it was designed for lots of potted plants).

The main reason we moved to this area was to get our son into the immersion program. He was recently accepted and my wife just went into the school to complete his registration. So we're committed in that sense. As far as other decisions - I could lose my job within the year or I could lose it within 2 years. Or 3 years or more... or I could land a new job and then something crazy happens (who knows what) and I lose that job in the next year or two. The point is, how long do I need to wait for my job to "stabilize" as a factor before making the decision to purchase a home? The original intent after selling our last place was to rent here short term then buy in once we're comfortable with the area. We're at the point where that's the case. I'm trying to not pour all the equity from the last place into a new place just because we are able to - a good chunk of that equity is in index funds along with the rest of our stache and we have enough set aside for a sizeable down-payment.


But yea, I'm definitely going to be keeping an eye on this one. I agree with you on the curb appeal and the ability to improve on it. I think this home would weed out a lot potential buyers who want everything in the upper echelon of turnkey. But the freeway noise is definitely a factor the more I think about it. We are hoping to check it out tomorrow so will probably spend some time outside just to see how bad it is.

[robartsd]

If you're absolutely committed to the area for your son's schooling then I don't see a huge problem with committing to a specific house. You'll want to mitigate job stability concerns with a large enough emergency fund.

[jeromedawg]

If you're absolutely committed to the area for your son's schooling then I don't see a huge problem with committing to a specific house. You'll want to mitigate job stability concerns with a large enough emergency fund.

That's what I was thinking. In the absolute worst case where we are 'forced' to move due to job loss, I have a 'backup' that has what seems to be a pretty comprehensive language immersion program. Of course, we should probably visit one of these days (perhaps once we're vaccinated and feel safe to fly again) but it's up on the border of Oregon/Washington (Vancouver). I'm viewing this as sort of a "Plan B" type of option in case things don't work out where we're at now.

We do have a good amount of emergency funds saved up otherwise.

[SunnyDays]

Try to visit the house during rush hour when the freeway will be busiest.  (Or is it always rush hour?)  The type of noise matters as much as the volume - screeching tires and honking is worse than a steady hum.  Also, if the AC is on a lot, you won’t notice noise as much.

It sounds like you can well afford a house at that price and I can see your point about potentially waiting forever for the ideal time to buy.  It would just be a shame to go through all that, then have to move in a year or two.

[cchrissyy]

The problem with buying before deciding about your job isn't just that extreme scenario where you are laid off and don't find any work and are forced to sell.  I wasn't thinking if that at all. What I meant was more like, if you currently work on one side of town, and so you buy a house considering what it means for your present commute, but then your next job is on the opposite side of town, or the next city over, and now your everyday life has an awful commute and you wish you'd bought a house closer to that new target. It's even possible the new job is in a nicer town or better schools or some other reasons you would be kicking yourself. It's just too soon to say. That's why I think the purchase decision is premature.

Good luck tho!

[jeromedawg]

The problem with buying before deciding about your job isn't just that extreme scenario where you are laid off and don't find any work and are forced to sell.  I wasn't thinking if that at all. What I meant was more like, if you currently work on one side of town, and so you buy a house considering what it means for your present commute, but then your next job is on the opposite side of town, or the next city over, and now your everyday life has an awful commute and you wish you'd bought a house closer to that new target. It's even possible the new job is in a nicer town or better schools or some other reasons you would be kicking yourself. It's just too soon to say. That's why I think the purchase decision is premature.

Good luck tho!

Ahh ok - I see what you mean. Yes that could be a factor. Right now I'm really focused on maintaining remote/work from home but even that's not guaranteed. In that case, the home (and general neighborhood I'm looking at) are still close to a major freeway, so if I have to commute it would still be a more convenient location to be. And it's located within 10-15 minutes of the schools that are part of the immersion program and as well as within good range of the many amenities, parks, grocery stores, dept stores, etc around here. The area I'm in isn't known to be a major HQ for tech or businesses but there are some tech companies in neighboring cities (Irvine and Aliso Viejo aren't far). We have friends that decided to live up in the foothills of Lake Forest while the husband worked at UCI, thinking it would be a reasonable commute. They were there for probably not even a year before moving back to Irvine...LOL. I've heard of plenty of people living in Riverside and commuting into Orange County for work. I don't think I could ever do anything like that...

I dunno but I feel like the job before house thing is similar to "chicken and egg" - I could get a job in the area that works out for now but then find another job that's much better (whether in apy or whateveR) but is now 20-30 minutes away and a suckier commute, so are we then supposed to pick up and move again?

Try to visit the house during rush hour when the freeway will be busiest.  (Or is it always rush hour?)  The type of noise matters as much as the volume - screeching tires and honking is worse than a steady hum.  Also, if the AC is on a lot, you won’t notice noise as much.

It sounds like you can well afford a house at that price and I can see your point about potentially waiting forever for the ideal time to buy.  It would just be a shame to go through all that, then have to move in a year or two.

We stopped by earlier this evening and you can definitely hear the freeway and constant lull of traffic but it's more a constant flow/steady hum...reminded me of a white noise machine. I don't think it would be that bothersome. The other factor is just air pollution/quality in the surrounding neighborhood. The neighborhood itself is really nice - we looked at a couple other homes in different areas of the same neighborhood on Saturday and overall we like it. No HOAs as well in any of these homes.

I've been down in Southern CA for a good part of my adult life (basically since college some 20 odd years ago...), so it's safe to say that it would be pretty tough leaving for somewhere else. But I do want to have some backup options just in case. At the same time, now with kids in the picture, I want them to grow up with a sense of stability. I recall growing up and living in a house my whole life and it's something I probably very much took for granted. My wife, in contrast, really struggled growing up as her parents went through many ups and downs with their restaurant and suffered loss of residential properties (esp through the Northridge earthquake). Hardship after hardship for them and she recalls the times that the water and power would go out because her parents didn't pay the bills. She recalls the times her parents had to sell their homes at losses because of the damage sustained from the earthquake and not being able to cover the adequate repairs. She recalls having to live in a small apartment rental (or possibly more) for a number of years after that and it just wasn't something she has the fondest of memories of. Granted, her parents were also not that financial responsible either. But I think given all this, we want a stable environment for our kids to be in as far as housing is concerned. Sure, we'll probably have to make some sacrifices (like deferring FIRE a bit) but I think that's a sacrifice we're willing to make. And it's tough having extended family within range too - if they weren't in the picture I think we'd feel a bit more inclined to get out there and road trip all over the place with the intention of looking at different areas where we could potentially end up (although, being Asian American, I feel like demographics plays a partial role in some of this too as far as viable options of cities to settle in where we won't feel some level of antagonism).

[Paper Chaser]

I guess it depends how you define "over paying". Since list prices are really just a start to negotiations, and not the actual value of a property. To me, you're only overpaying if a bank won't lend you the agreed upon amount. So if you agree to buy a property for $800k, and the appraisal comes back at $775k, but you keep the original agreement and pay another $25k out of pocket, then I'd say you overpaid. But if you agree to buy a place for $800k, even though you feel like it's not worth that much, that's not really overpaying IMO, it's just your gut telling you the place is expensive.

We just passed 5 years of ownership for our place. I thought we'd gotten an ok deal when we bought it, but as first time home buyers, it still felt very expensive, and was more than I really wanted to spend when we began our house search. It was purchased with some renovations in mind, which only made it feel more expensive because we knew we'd have to spend more to get it where we wanted. We took about 6 weeks and worked on it ourselves before moving in. Took out a wall, chiseled out a small section of really ugly tile and laid new flooring in many places, all new paint, some drywall work that we farmed out, a couple of new kitchen appliances that needed to be replaced, added lighting, etc.

Now, the tax assessed value of our property is 1.75 times what it was when we bought it, and the real estate web sites all estimate it's value to be about 1.65 times what we paid just 5 years ago, and this is in a LCOL area. During that time, our household income is up about 50% too, so what felt "expensive" to me 5 years ago is looking pretty good in hindsight. Of course that's almost entirely luck, being patient when choosing a location/neighborhood, coupled with some sweat equity during a few brutal weeks of paying to live in two places.

Are you saying that paying more than the appraised value is "overpaying" then? In this market it seems commonplace for offers to be made over whatever the likely appraisal is.

Or do you mean to say that if you agree to keep the original agreement of paying the $800k over the $775k list and appraisal value AND pay an additional $25k out of pocket (like for additional renovations, repairs, etc)  that *this* would be overpaying?

Yes, for me paying more than the appraised value would be overpaying. Mortgage appraisers make their living determining the value of homes. If they say it's only worth XXX, or it's too risky to lend more than XXX, why would I then pay more?

If you want stability for your family, the most important thing is making sure your housing is not going to put you into a financial bind, and paying more than a bank says a house is worth seems very risky to me, just as housing taking up too large a percentage of your take home pay would be.

[jeromedawg]

I guess it depends how you define "over paying". Since list prices are really just a start to negotiations, and not the actual value of a property. To me, you're only overpaying if a bank won't lend you the agreed upon amount. So if you agree to buy a property for $800k, and the appraisal comes back at $775k, but you keep the original agreement and pay another $25k out of pocket, then I'd say you overpaid. But if you agree to buy a place for $800k, even though you feel like it's not worth that much, that's not really overpaying IMO, it's just your gut telling you the place is expensive.

We just passed 5 years of ownership for our place. I thought we'd gotten an ok deal when we bought it, but as first time home buyers, it still felt very expensive, and was more than I really wanted to spend when we began our house search. It was purchased with some renovations in mind, which only made it feel more expensive because we knew we'd have to spend more to get it where we wanted. We took about 6 weeks and worked on it ourselves before moving in. Took out a wall, chiseled out a small section of really ugly tile and laid new flooring in many places, all new paint, some drywall work that we farmed out, a couple of new kitchen appliances that needed to be replaced, added lighting, etc.

Now, the tax assessed value of our property is 1.75 times what it was when we bought it, and the real estate web sites all estimate it's value to be about 1.65 times what we paid just 5 years ago, and this is in a LCOL area. During that time, our household income is up about 50% too, so what felt "expensive" to me 5 years ago is looking pretty good in hindsight. Of course that's almost entirely luck, being patient when choosing a location/neighborhood, coupled with some sweat equity during a few brutal weeks of paying to live in two places.

Are you saying that paying more than the appraised value is "overpaying" then? In this market it seems commonplace for offers to be made over whatever the likely appraisal is.

Or do you mean to say that if you agree to keep the original agreement of paying the $800k over the $775k list and appraisal value AND pay an additional $25k out of pocket (like for additional renovations, repairs, etc)  that *this* would be overpaying?

Yes, for me paying more than the appraised value would be overpaying. Mortgage appraisers make their living determining the value of homes. If they say it's only worth XXX, or it's too risky to lend more than XXX, why would I then pay more?

If you want stability for your family, the most important thing is making sure your housing is not going to put you into a financial bind, and paying more than a bank says a house is worth seems very risky to me, just as housing taking up too large a percentage of your take home pay would be.

In terms of appraisers, I've heard stories of some appraisers not really knowing how to correctly appraise homes and may end up appraising something for more? Also, what are you supposed to do if a homeowner has listed a home and you put in an offer at their asking price (or any price really) but then the appraisal comes back for less and they're not willing to negotiate? Especially in today's market? Pretty much just walk away? So if a home in this area is listed for $850k, and you've placed a bid on it at $855k and get into escrow, then it ends up getting appraised at $830k, and then the seller says "take it or leave it - no negotiations... we'll just go to the next person" you just pass on it? EDIT: oh wait, this is all part of the appraisal contingency (lol, we didn't deal with one when selling so it's somewhat new territory). The common trend currently (and even last year) was that buyers were removing both the inspection AND appraisal contingencies. I think the only contingency they might be leaving on the table is the loan contingency, which my realtor says can still be leveraged as an out even without the other contingencies (e.g. if the inspection or appraisal come back with issues or lesser values, you can argue that the loan is impacted because you have to make up for the difference in cash and now need to back-out in light of that, etc)

One realtor I recently connected with advised to just make a bunch of offers on the low side (not sure if he meant under asking or barely over asking) until one sticks. In the current market around here, I think we'd just get laughed at for doing that (well, the former in particular).

[robartsd]

In terms of appraisers, I've heard stories of some appraisers not really knowing how to correctly appraise homes and may end up appraising something for more? Also, what are you supposed to do if a homeowner has listed a home and you put in an offer at their asking price (or any price really) but then the appraisal comes back for less and they're not willing to negotiate? Especially in today's market? Pretty much just walk away? So if a home in this area is listed for $850k, and you've placed a bid on it at $855k and get into escrow, then it ends up getting appraised at $830k, and then the seller says "take it or leave it - no negotiations... we'll just go to the next person" you just pass on it? EDIT: oh wait, this is all part of the appraisal contingency (lol, we didn't deal with one when selling so it's somewhat new territory). The common trend currently (and even last year) was that buyers were removing both the inspection AND appraisal contingencies. I think the only contingency they might be leaving on the table is the loan contingency, which my realtor says can still be leveraged as an out even without the other contingencies (e.g. if the inspection or appraisal come back with issues or lesser values, you can argue that the loan is impacted because you have to make up for the difference in cash and now need to back-out in light of that, etc)

Since appraisals seek the actual value of what a home can sell for, they make use comps. Appraisers also know that comps are lagging indicators, so they likely make some adjustment for their perception of market sentiment. If they come up with a value that is reasonably close to the accepted offer, they might simply match the appraisal to the accepted offer (at least one of our appraisals did this).

I was pretty happy to waive appraisal contingency when I was home shopping. As my agent told me, you can back out of the deal before closing for just about any reason; contingencies are used to provide the basis for adjusting the accepted offer as you learn more about the property.

[jeromedawg]

In terms of appraisers, I've heard stories of some appraisers not really knowing how to correctly appraise homes and may end up appraising something for more? Also, what are you supposed to do if a homeowner has listed a home and you put in an offer at their asking price (or any price really) but then the appraisal comes back for less and they're not willing to negotiate? Especially in today's market? Pretty much just walk away? So if a home in this area is listed for $850k, and you've placed a bid on it at $855k and get into escrow, then it ends up getting appraised at $830k, and then the seller says "take it or leave it - no negotiations... we'll just go to the next person" you just pass on it? EDIT: oh wait, this is all part of the appraisal contingency (lol, we didn't deal with one when selling so it's somewhat new territory). The common trend currently (and even last year) was that buyers were removing both the inspection AND appraisal contingencies. I think the only contingency they might be leaving on the table is the loan contingency, which my realtor says can still be leveraged as an out even without the other contingencies (e.g. if the inspection or appraisal come back with issues or lesser values, you can argue that the loan is impacted because you have to make up for the difference in cash and now need to back-out in light of that, etc)

Since appraisals seek the actual value of what a home can sell for, they make use comps. Appraisers also know that comps are lagging indicators, so they likely make some adjustment for their perception of market sentiment. If they come up with a value that is reasonably close to the accepted offer, they might simply match the appraisal to the accepted offer (at least one of our appraisals did this).

I was pretty happy to waive appraisal contingency when I was home shopping. As my agent told me, you can back out of the deal before closing for just about any reason; contingencies are used to provide the basis for adjusting the accepted offer as you learn more about the property.

Our realtor was saying that at least in the market we're in (also alluding to the fact that appraisals are an art more than they are a science), appraisals are highly subjective as each appraiser is likely acting in the interest of the bank. Even the county appraisers are doing so in the best interest of the county to increase the amount of taxes they're getting out of it. So it seems that you have to look more at what other places have sold for and at what square foot (according to condition) to get a better idea... presumably this is what appraisers *should* be doing.

[mozar]

although, being Asian American, I feel like demographics plays a partial role in some of this too as far as viable options of cities to settle in where we won't feel some level of antagonism

I hear that. I am a black woman and I don't feel welcome in most of the USA. When it was time for me to buy I decided to think about a place where I could live for the rest of my life. I bought a house in the DC area (hcol) and it's my "ride or die" house. I've lived here through several job changes. I moved to this location in part to my closer to my mother, but now we're estranged. Oh well!

My strategy was to look for a house that was outdated but didn't need anything major. Old carpets, old wood paneling, etc. One of the houses you linked the staging was atrocious, lol, that might be easier to buy.
If I were you I would wait until your wife actually gets pregnant/ the third is actually here. But I understand if the space seems unbearable right now. The problem is though, everyone else feels the same way.

[jeromedawg]

although, being Asian American, I feel like demographics plays a partial role in some of this too as far as viable options of cities to settle in where we won't feel some level of antagonism

I hear that. I am a black woman and I don't feel welcome in most of the USA. When it was time for me to buy I decided to think about a place where I could live for the rest of my life. I bought a house in the DC area (hcol) and it's my "ride or die" house. I've lived here through several job changes. I moved to this location in part to my closer to my mother, but now we're estranged. Oh well!

My strategy was to look for a house that was outdated but didn't need anything major. Old carpets, old wood paneling, etc. One of the houses you linked the staging was atrocious, lol, that might be easier to buy.
If I were you I would wait until your wife actually gets pregnant/ the third is actually here. But I understand if the space seems unbearable right now. The problem is though, everyone else feels the same way.

Thanks for the input - it's probably the Sara Lane house I linked. The house shows better in person than it does in the pics - we just checked it out today. Our realtor says they've priced it to start a bidding war per comps in the area (based on price per sq ft). He thinks most similarly sized homes in the area would sell in at least the mid-$800s if they were fully turnkey. This one is definitely going to need new flooring and baseboards throughout as well as fresh paint. But structurally and layout wise it's fine. There are other things that we would want to change (like adding an exhaust fan in the kitchen, replacing a fan in a bathroom, and doing away with an ugly and dated upstairs bay window eventually) but those are things that aren't necessary to do right now. Putting in $15-20k (and better, even less if we want to undertake DIYing any of it) towards paint and flooring would go a long way.

I think the biggest concern outside of all this is the proximity to the freeway. Checking on Google Maps the house is less than 500ft away from the freeway - there are sound barrier walls but you can hear the lull of traffic - it's not a *bad* sound and is definitely more like white noise so the noise isn't the main issue. It's the air quality/pollution and long-term effects or what not of being that close. I suppose the good thing about this part of the freeway is that there usually aren't many backups or jams and traffic typically flows better along this segment. I would think being close to a segment of the freeway where things are ALWAYS backed up is even worse since you have a constant haze of emissions from cars slowly moving through.
 That said, I could see us potentially renting this out later down the road (if it makes sense to). Or we might consider living here for a good number of years while slowly remodeling and updating it to keep it current and or have good value-adds, then selling and moving to a different area of OC at that point in time.

[MaybeBabyMustache]

One thing to think about as it relates to freeway proximity... we bought a house in Seattle, in a very quiet neighborhood, but on the street closest to the freeway. Over time, the neighborhood/city/planners decided to change the freeway pretty fundamentally to bury it under the road, to improve the residential neighborhood. Sounds great, right? Five years after we bought our house, there were YEARS worth of construction, to the point that they repeatedly had to put us in a hotel. We went for several years with construction lights at night in our rooms (because, it was a busy freeway, and construction was only authorized at night). I became very sick from sleep deprivation, we had infants & toddlers at home, it was an absolutely horrific experience.

If you are that close to the freeway, plan that there will be maintenance, construction, noise from construction, lights, etc. Being that close to the freeway (which is now underground) still made it harder to sell in the long run.

[jeromedawg]

One thing to think about as it relates to freeway proximity... we bought a house in Seattle, in a very quiet neighborhood, but on the street closest to the freeway. Over time, the neighborhood/city/planners decided to change the freeway pretty fundamentally to bury it under the road, to improve the residential neighborhood. Sounds great, right? Five years after we bought our house, there were YEARS worth of construction, to the point that they repeatedly had to put us in a hotel. We went for several years with construction lights at night in our rooms (because, it was a busy freeway, and construction was only authorized at night). I became very sick from sleep deprivation, we had infants & toddlers at home, it was an absolutely horrific experience.

If you are that close to the freeway, plan that there will be maintenance, construction, noise from construction, lights, etc. Being that close to the freeway (which is now underground) still made it harder to sell in the long run.

Good point. I didn't even think of all that. I'll have to try to research if there are any 'improvement' or maintenance plans in store for this section of the 5 fwy. In between the freeway and neighborhood/sound barrier wall, there is a walking/biking path that winds along in parallel.
That sounds like an awful thing to have to go through with all the construction and maintenance!
If construction and maintenance weren't as crazy as they were and things were more 'manageable' in that sense would you have felt differently about choosing that home? Or would other factors (such as air quality/pollution) been a factor that would have caused you to want to move sooner than later?

[cchrissyy]

IMO that's too close. It would bother you from day 1 and be harder to sell.

The quiet background noise is our bets case scenario but sometimes there will be sirens, or horns honking, or noise from a crash. The poster above bringing up lights has an excellent point.

I'm not even a worrier but at that distance I'd think of air pollution 24/7.

It's wise to consider rental potential too but this is not the time or place for buying a rental. That's a move for a different kind of market.

[jeromedawg]

IMO that's too close. It would bother you from day 1 and be harder to sell.

The quiet background noise is our bets case scenario but sometimes there will be sirens, or horns honking, or noise from a crash. The poster above bringing up lights has an excellent point.

I'm not even a worrier but at that distance I'd think of air pollution 24/7.

It's wise to consider rental potential too but this is not the time or place for buying a rental. That's a move for a different kind of market.

Yea I thought it wasn't as close until I measured the distance on Google Maps. Under 500ft away just feels a bit off-putting.


Street view:


Freeway view (circled is one of the glass wall barriers):

[MaybeBabyMustache]

One thing to think about as it relates to freeway proximity... we bought a house in Seattle, in a very quiet neighborhood, but on the street closest to the freeway. Over time, the neighborhood/city/planners decided to change the freeway pretty fundamentally to bury it under the road, to improve the residential neighborhood. Sounds great, right? Five years after we bought our house, there were YEARS worth of construction, to the point that they repeatedly had to put us in a hotel. We went for several years with construction lights at night in our rooms (because, it was a busy freeway, and construction was only authorized at night). I became very sick from sleep deprivation, we had infants & toddlers at home, it was an absolutely horrific experience.

If you are that close to the freeway, plan that there will be maintenance, construction, noise from construction, lights, etc. Being that close to the freeway (which is now underground) still made it harder to sell in the long run.

Good point. I didn't even think of all that. I'll have to try to research if there are any 'improvement' or maintenance plans in store for this section of the 5 fwy. In between the freeway and neighborhood/sound barrier wall, there is a walking/biking path that winds along in parallel.
That sounds like an awful thing to have to go through with all the construction and maintenance!
If construction and maintenance weren't as crazy as they were and things were more 'manageable' in that sense would you have felt differently about choosing that home? Or would other factors (such as air quality/pollution) been a factor that would have caused you to want to move sooner than later?

We loved the actual house & the neighborhood. But, if I could do it again, I wouldn't have bought it. It's water under the bridge, but it was a hassle to sell, the construction issues, and even though the neighborhood we lived in was incredibly safe, our house was closest to the freeway, so was a target of crime 2x - because it's easy to get out of the neighborhood/onto the freeway as a getaway.

[jeromedawg]

One thing to think about as it relates to freeway proximity... we bought a house in Seattle, in a very quiet neighborhood, but on the street closest to the freeway. Over time, the neighborhood/city/planners decided to change the freeway pretty fundamentally to bury it under the road, to improve the residential neighborhood. Sounds great, right? Five years after we bought our house, there were YEARS worth of construction, to the point that they repeatedly had to put us in a hotel. We went for several years with construction lights at night in our rooms (because, it was a busy freeway, and construction was only authorized at night). I became very sick from sleep deprivation, we had infants & toddlers at home, it was an absolutely horrific experience.

If you are that close to the freeway, plan that there will be maintenance, construction, noise from construction, lights, etc. Being that close to the freeway (which is now underground) still made it harder to sell in the long run.

Good point. I didn't even think of all that. I'll have to try to research if there are any 'improvement' or maintenance plans in store for this section of the 5 fwy. In between the freeway and neighborhood/sound barrier wall, there is a walking/biking path that winds along in parallel.
That sounds like an awful thing to have to go through with all the construction and maintenance!
If construction and maintenance weren't as crazy as they were and things were more 'manageable' in that sense would you have felt differently about choosing that home? Or would other factors (such as air quality/pollution) been a factor that would have caused you to want to move sooner than later?

We loved the actual house & the neighborhood. But, if I could do it again, I wouldn't have bought it. It's water under the bridge, but it was a hassle to sell, the construction issues, and even though the neighborhood we lived in was incredibly safe, our house was closest to the freeway, so was a target of crime 2x - because it's easy to get out of the neighborhood/onto the freeway as a getaway.

Ah ok thanks. I think we have been given us enough motivation to pass. If the house were at least a block or two further in and away from the freeway, I think we would have been pretty sold on it. But considering the points about the additional factors outside only the "white noise" we've observed, I think it's a concern that we'd be *facepalming* ourselves over several years into it and having those issues pop-up. I was just researching and found that they've been working on a freeway widening project in the area - https://octa.net/Projects-and-Programs/All-Projects/Freeway-Projects/Santa-Ana-Freeway-(I-5)/I-5-(SR-73-to-El-Toro-Road)/?frm=12924#!Details - it seems like starting this year through 2024 the segment of the freeway nearest to where that home is located will be impacted and there will be ongoing construction, etc.

[jeromedawg]

What's the closest you all would consider living from a major freeway anyway? According to LA Times, 500ft minimum but they also say even a minimum of a mile is best due to long term health concerns. The neighborhood we're considering (same on Sara Ln is in) is all within roughly a 1mi radius of the highway. The place we used to live at was under a mile as well but roughly 1200-1300ft away which felt like plenty. Sometimes we could hear motorcycles and cars zooming/racing but it wasn't really noticeable at all. After researching into this more, now I'm all paranoid about far we should be living from the freeway. There is a toll road that cuts through the area as well, but I'm not as concerned about that as it's not really a main freeway.

[SunnyDays]

Are there any air quality reports from that area you can get your hands on from the city?  If you know exactly what level of particulates you'd be exposed to, that might make your decision easier.

[jeromedawg]

Are there any air quality reports from that area you can get your hands on from the city?  If you know exactly what level of particulates you'd be exposed to, that might make your decision easier.

Unless there are fires, the AQ generally stays in the "Good" range in this area. Even around the freeway, it's pretty good overall:
https://www.breezometer.com/air-quality-map/air-quality/united-states/laguna-niguel

[robartsd]

Some major boulevards can be just about as bad as a freeway for air quality (possibly worse if the freeway segment in question almost always flows smoothly vs heavy stop an go traffic on the boulevard). The more trees between you an the freeway the better as well as they can help to filter the air. Day to day, the impact of distance from the freeway on air quality will depend on wind (stronger wind reduces intensity of the air quality impact, but increases its distance). I've tended not to worry particularly about freeway proximity as they are just one of many sources of air pollution in an urban environment; but I've never seriously considered purchasing a home that close to a freeway either.