5 Year Planning, More or Less

The other night, I strolled into B’s man-cave and asked what mischief he was up to.  He said he was looking at his retirement accounts, so I seized that opportunity to talk about future planning.  We talked all sorts of personal finance goodies, but we also talked about housing and where we’d like to settle.  We both agree that (for now) it’s favored between San Diego or Washington, primarily for family proximity purposes.

B’s pretty up to date with housing markets, and he set the parameters both in San Diego and Washington starting at $500k.  I yelled inquired if he was out of his ever-lovin’ mind, but when we saw the results I was pretty shocked.  I know that there’s a shortage in San Diego and know that it’s about location, location, location, but the houses were just… not very $500k-plus-looking.  So then, we check out Washington houses, and they were a lot nicer, but even then I noticed a lot were 3 bedroom, which would be tight for the gazillion kids he wants (okay, 3-4… I’m on Team Two-Three).  He did lower the parameters to $350k in Washington, and there were a lot of modest looking houses with 4 bedrooms that were decent and less tougher to swallow than a half-mil house.  We did the same thing for San Diego, and there’s some in that range, but in BFE.

We then took schools into consideration, and when comparing the San Diego houses-schools versus Washington houses-schools, the better deal with the better schools tended to lean on the Washington side.  Employment-wise, San Diego is favored with our current conditions (i.e., employed), though we do have to pay state income tax.  Climate and lifestyle is a no brainer, but is it worth the cost?

So what did we decide?  Well, we didn’t… though we did agree that in five years, we will have determined where we are going to settle and stay put.  Since our place now has two bedrooms, I think it would be comfortable enough to stuff a kid or two here.  But, come when they start school, I’d like to have a place established and stay there by all means possible.  Meanwhile, from now until then, we’ll just truck on to save a 20% down payment on the original parameter he set, which he proclaims can be raised “easily” in less than that (it can?!), as well as keep monitoring the housing market, employment prospects, parental/family needs, etc.

While it’s pretty exciting to talk about all this, it’s also terrifying, and at times discouraging.  It’s exciting to finally have a partner in the same mindset as me in terms of future goals and wiser than me in terms of finances, but then I think of all the expenses that come with raising kids (from childcare to college and everything in between) and I wonder how we’re going to make the magic happen.  I know it’s not magic, per se, but hard work, savvy planning/investing, and determination, but the task and expenses themselves are pretty daunting.  But then it all clicked, that what I’m doing now with the self-entitled “Year of the Suck” in paying down my debt, is something I will need to implement for the rest of my life.  It’s just nice that, this time around, it’ll planned and for things that really matter (to me) rather than paying my dues on past frivolous wants.  So, I’m starting to plan annual and long-term metrics/life goals in order to not make past mistakes recur.

I’m curious to know what the housing prices are in your area (say, for a three or four bedroom)?  Or, what things do you take into account when ‘settling’ somewhere?


29 thoughts on “5 Year Planning, More or Less

  1. The housing prices in the midwest all depend on which city. In Chicago they’d be similar to San Diego, but there are plenty if burbs where you can get a nice single family home for $200 -$250k. I don’t ever plan to buy property in the city of chicago. That’s just a little too rich for me.

    • $200k-$250k sounds really reasonable! Would it be a far commute if you were to still work in the city? I loved the city itself (though I only visited it once, the bars there seem a lot friendlier), but outside of it, it was a bit of a culture shock to not see mountains or anything when looking far away, but just a lot of sky. 🙂

  2. Housing here in St. Louis is pretty cheap. We currently have a 4 bedroom house that is fully updated and with a good sized yard and we bought our house for around $125,000. You can get brand new houses here for around $150,000. Our house is only 1,200 square feet, but if you include our finished basement it’s around 2,400.

    We plan on buying next year and our budget for the house will be around $400,000 max. That will buy us a decent sized house with hopefully a couple of acres.

    • A couple of acres – wow!! The $400k-$500k will get you a 1200 sq. ft. house here built in the 60’s (with the smallest closets ever)… man, I’m envious of all the land you can buy there!

  3. I WISH houses were $500K in Vancouver! In Vancouver, if you want to buy a house, expect to pay over $1M for an ugly box. If you want to pay less than $1M than you need to move to neighboring suburbs. My friend’s sister just bought a 70 year old house, 4 bedroom, 1 bath in a suburb 30 minutes away from downtown and they got it for a steal at $700K!!! I hope this makes you feel better 😉 PS. my vote is for Seattle because it’s closer to me!

    • Oh my goodness, that’s ridiculous!! Yeah, a lot of the houses here that are $500k+ were built in the 60’s… so small, though I do admit kind of charming. I can’t imagine paying $1M for a house – do you think you and J will “settle” there? Haha, I figured your vote was northward 😉

  4. This is something I’m constantly giving a lot of thought to, because aside from my love of the weather, beaches, and lifestyle, I want my money to go further, and it’s just hard to make that happen in LA. I’m assuming you are talking about Washington State right? Seattle?

    • I know, right? I absolutely love SoCal weather and lifestyle, but it eats away at my finances for sure. Yup, Seattle area – where do you imagine yourself migrating to?

      • sigh…no idea. I keep thinking Portland or Boulder. No idea why since I’ve lived in neither. But neither one is calling me enough yet. So just not sure…

  5. Okay, LOL on the “BFE”. I haven’t heard that in years! Ha, ha, ha….

    I totally get what you are saying about prices here in SoCal. It is super expensive! We just moved to an area, away from my beloved beach, just to get more for our money. We were able to rent a house for the same amount we were paying for a 2 bedroom apartment near the water.

    • Isn’t it crazy how much more expensive it is by the coast? I do admit, I loooove seeing beach sunsets almost every day, but if it was a choice between that and more space (and nicer digs), I’d choose the latter, at least these days. Lol, I love that you got BFE. 🙂

  6. I live in Northern Virginia area. It’s been a seller’s market already for awhile here. Even within this area, few miles make a huge difference in price, so I say the range would be $400k-$700 for a 3 bedroom house. I want a house sooner than later, but realistically I’m probably looking at 5 years like you.

    • Man, that’s exactly what it’s like here – the houses were built in the 1960’s and 1200 sq. ft. or something. I’m curious why it’s so expensive there (oh wait, because all the DC people live there?).

      • Northern VA area is an expensive area. Like you said, DC is a big job market (gov’t and gov’t contractors), so housing market is crazy here among other things. But if you’re out about an hour away from DC, the price drops significantly.

  7. My in-laws are still in San Diego and I could not imagine trying to buy a house there. Our first apartment was there…five miles from the border. But, that’s for a different story. 😉 Here in Omaha you could easily get a 3 bedroom house for anywhere over $115Kish. We spent $125k on our house six years ago and for over $200k you could get a nice piece of land and at least 4 bedrooms. Then again…we DON’T have the Ocean. 😦

    • Hee hee, I’m guessing Chulajuana? 😉 A lot of my friends live in that area and there’s some very nice tract homes, but I don’t really like cookie cutter neighborhoods so much. Wow, I can’t believe the prices in Omaha!! Are there lakes or mountains near you at least? I would just like some sort of scenery!

  8. Wow, both San Diego and Seattle are both fine cities; tough call. Obviously, you are going to have some serious sun withdrawal should you move to Jet City. However, as you pointed out, the lack of any state income taxes is really appealing.

    We live outside of Denver and you can get a really nice house here for around $100/square foot, so we are spoiled. Our 4 bedroom home with 4200 square feet was just under 400K. We’re moving soon because we don’t need this ridiculous amount of space. We expect our next home to be a bit cheaper.

    • Lack of state income tax is definitely appealing – pending I get the same salary, it would be like giving myself a nice little raise! Wow, your house is like a McMansion in these parts! Are you going to stay in the area?

      • Yeah, we’re moving about 30 miles north.

        Our current home has way too much space and way too terrible neighbors. I have no idea what we were thinking. The funny thing is that when we had the home on the market, common feedback from people who saw it was, “It’s just too small for us.”

  9. Let’s see… in our neighborhood (S FL) there’s a cute little 3/2 for sale that’s the same size as ours (1100sqft) for $225K – but I think it’s overpriced. A friend just bought a similar 3/2 with no garage that’s about half a mile closer to the beach (we’re 1.5 mi inland) for ~$195K.

    Really, depending how close you want to be to the beach, you can find homes for almost any price these days. Okay, that’s less true than it was in 2009. But there are still homes within 3 or 4 miles of the beach that sell in the low $100s. They’re just going to be older homes (read 30ish years old) and might need some work like ours did when we bought it.

    • Wow, that’s overpriced?? A 1960’s house is what goes for $500k here… hrm, I wonder if we have family in Florida that would justify moving there! 🙂 The water is way nicer on that coast for sure.

  10. During the down market we were able to buy 800sq ft for $400k. It’s a two-bedroom (one much smaller than the other-good kids room or office) condo. Most of the buildings in our town are single family brownstones converted into condos. A 3-4 bedroom single family brownstone would be way over a million. It’s frustrating because growing up I always imagined 1/2 a million would get us a mansion. Here it doesn’t even get you a yard or a parking space lol.

    • I can only imagine with NY – I heard even certain parts of Jersey were comparable to San Diego. I guess perhaps that’s the price for coastal living, though it still seems so crazy.

  11. We’re also contemplating a move to CA and the property prices there make me sick…ugh! Kudos to you for charging forward with your plan–your determination will get you wherever you decide the end point is!

  12. Gah, I’m so behind on blogs. That’s awesome you guys are on the same page and moving along with your life plans. Yikes about the housing though. I know Portland is much cheaper, but prices are going up! It’s getting hip around here…I think you could do very well in Seattle. Just enjoy SD for now, plan, and re-evaluate when the time comes.

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  14. Five years ago, the five year plan was to buy a flat in Paris and have 2.3 children. Five years later I bought a house in Guatemala ($100K for 2 now 3 bed 1 now 2 bath, 600sqft on half an acre with a private beach and 90 acres of land on a nearby parcel) and the proud mother of a couple of turkeys, geese, ducks and 9 hens… I still have a UK property (3 bed, 800 sqm, about $400K, central location in a college town near London) and the main requirement was that it had a good rental potential in case “life happened”.
    For me it all comes down to how long extra you will need to work to fund the prime location or the high cost of living area. Unless you have a high paying job, spending 10 years of salary on a house seems like a lot.

    • Wow, your life plan is drastically different! I agree that 10 years of salary for a house is a lot (I love how you put things in perspective with how many days/years it would actually take salary-wise to pay something off). Hopefully with careful planning and timing, we’ll find a reasonably priced house once we get to that bridge. Enjoy your vacay!

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