I am 54 years old, I live in California and I make $60K. Do I have to move out of state to buy a house?

I am 54 years old, single, and have saved $100,000. The good news: I have no debt either. I work as a waiter at a steakhouse and earn between $55,000 and $60,000 a year. I live and rent a condo for $1,500 a month in Southern California.

I’m not sure if I should buy something in California or just save it for a rainy day and invest in something else. Another option I’m considering is to move to another state, buy property there, and start a new life.

That I have to do? I’ve always rented, and I wonder if it’s too late to buy a house.

ready for a change

the big move‘ is a MarketWatch column that looks at the ins and outs of real estate, from finding a new home to applying for a mortgage. Have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at [email protected].

Dear Done,

Your next move depends on a couple of things.

You have a decent amount of savings for rainy days. But as you’re hinting at, yes, using that as your down payment in California can leave you penniless, should an emergency arise.

But investing it in real estate, or any other asset like stocks and bonds, can increase your wealth and benefit you more. Given your current salary, it may make sense if you move to a cheaper real estate market.

If you want to get into real estate, first ask yourself these questions: Are you ready to uproot your life and try something new? Can your salary support a mortgage for years to come? And would you be able to easily find a job with a salary that is enough to make your mortgage payments every month?

The bottom line: If owning a home has been a lifelong dream, the amount you’ve saved can absolutely go toward a down payment on a home.

If you plan to work for the next 11 years or more, have a full-time job, and can count on a steady paycheck, you can use the MarketWatch Mortgage Calculator, or request quotes from different mortgage companies, and see what they allow you to do. your finances. buy. Consult a mortgage broker and establish your price range. It is a great advantage that you do not have debts.

You can search for a home within your price range in California. But as you know, it’s an expensive proposition. The median price for a single-family home in California was $791,490, according to the California Association of Realtors. Condos and townhomes cost around $640,000. There are counties farther north where median prices fall into the $400,000 range, and in some cases, below $300,000.

If you’re moving to a different state, perhaps one with a cheaper cost of living (California is the fourth most expensive state to live in the US), factor in moving expenses and other miscellaneous expenses. Can you easily find another job in the new state?

Consider the beneficial change in taxes when you move out of California. You are moving from a state that imposes the highest income taxes on its residents. If you have a specific state in mind, talk to a lender or real estate agent to see how much you can afford and what’s on the market. Trust me, a $100,000 down payment can go a long way in some parts of the country.

Ultimately, if you really want to try something new and have some money on your hands, and can easily find a new job in a new state, rent short-term in the new city first and start your home buying search aggressively.

Real estate agents will tell you that it is never too late to buy a house. And there is some truth to that, given that home values ​​have appreciated over the long term. Between February 2003 and February 2023, home prices have grown nearly 130%, according to the Case-Shiller Index, and prices have risen 43% in the last five years alone.

If your goal is to become a homeowner, go for it if you have the financial means to do so. But a word of caution about entering the housing market right now: It’s going to be tough. There may be competition, depending on where you are looking.

As a real estate technology company Redfin


put it on, the market is hot and it is also cold. Home buyers say “Yes” while sellers say “No.” There are few homes on the market, and new listings are down 19% compared to last year, the company said.

If you are feeling very overwhelmed by this home buying process, consider renting your home. That way, you can always go back.

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