Irvine Housing Blog

There’s always a bright side.

It was less mind numbing than a day driving around barren Las Vegas neighborhoods.

Another non-sequitur?

Yes, my point is Irvine rents are inflated, relative to other nearby areas.  We looked at Irvine Co. townhomes with attached garages in 2006-2007, and they ran from $2,500-$3,000.

If you rent here, you’re choosing to spend more.  Is that stupid?  Maybe. 

If you buy here, you’re choosing to pay an inflated price.  Is that stupid?  Maybe.

I’ll have to do the math 10 years from now, to tell you “how stupid” our purchase appears to have been.

However, renters, IrvineRenter included, will also need to do the math years from now to know “how stupid” their decision to continue renting was.

It’s all relative.  The same can be said for cars.  Is it “stupid” to pay $50K+ for a BMW?  Maybe…

In 10 years time some one who rents a single family home in one of the Nicer parts of Irvine will have unloaded a mint in pre tax dollars to live in Irvine.

You are looking at close to $750,000 in pre tax dollars.  But don’t try to tell that person that Irvine is special.  It’s a bland suburb.

Perspective, I don’t think you are stupid. You bought a house you can afford in a nice neighborhood, and you can wait out the market. If all the bullish sentiment is correct, you may come out far ahead. There are many variables in the future.

I don’t think either of us regrets the opposite decisions we made. Your circumstances are different because as a high wager earner, you could afford a house, albeit perhaps smaller than others of your wage group (I am guessing, I don’t know). At my income level at the time, I was either going to rent a nice 3/2 or buy a 1/1 and try to fit a family into it. I only would have considered 30-year fixed rate mortgages, so affordability was very low. I couldn’t do the 1/1 (my family entitlements) so we chose to rent.

If I could have afforded to buy a house as nice as the one you bought with my income, I may have done it. A change in resale value is only a problem if you have to sell to move.

Planet Reality - I think you mean to use “after tax” dollars rather than “pre tax.” I’d love to pay rent “pre-tax”!

IR - Oh, I have regrets.  I would be much more comfortable and happy “wasting” money on inflated Irvine rent right now, but my wife just wasn’t interested in that. 

We’ve been fortunate in this recession.  I could complain that we’re underwater 15% today, but the actual dollar amount is less than 30% of our household income.  So we just keep making our fixed fully-amortized payment while I agonize over the housing downturn daily and my wife completely ignores it…

No I mean pre tax.  If you are paying $3000 a month in rent you are paying at least $4000 a month of your salary towards rent.  That’s at least $48,000 of your salary a year.

That relative state of calm and peace of mind is your reward during the recession for prudently taking on debt. You stayed within the guidelines, and because of it your emotional state is much more serene than others who bought when you did but did not remain conservative in their borrowing.

Hmm, I’ve always heard this argument made with the term “after tax” dollars - as in, “That’s three thousand after tax dollars you’re paying toward rent.  It takes you $4,000 in gross (“pre-tax”) earnings to make that rent payment.”

You can get a Bimmer for less than $40k. Who says you have to get a 5 series or above.

That being said. Toyotas aren’t exactly cheap either.