When I moved from Boston to LA in 2005, everything was coming up roses. I was dating a woman whose presence had suddenly transformed my life from black and white to color, and we were moving in together (spoiler alert: I married her). I’d found us an apartment that was a nine block walk to the beach. I’d landed a great job at a highly-regarded community hospital where several friends worked in the ED. My wife joined me at the beach apartment a couple of months later, and out of thin air drummed up five interviews and multiple job offers by the following month. We felt unstoppable.
The Romance of Buying Our Home (Skip Ahead For The Nitty Griity)
A year later, we were married, and soon after that we had a kid on the way. Housing prices were going straight up. Our weekends became a blur of visiting rusty tool sheds on postage stamp-sized lots with price tags exceeding a million dollars. We figured it would be a year, tops, until we found the right home.
Since I’d been a child, my father had relieved his stress by puttering around in our garden. When work ran late, his time in the garden was never sacrificed - dinner simply started later.
I had a couple of succulents on the deck, and longed for a garden escape like Dad’s. I was desperate for land of my own, seeking the literal and figurative planting of roots in a community after multiple disruptive relocations for my medical education.
I had low standards, and was willing to bid on several homes whose garden porn (i.e., a jacaranda tree blossoming purple in the spring) had me dying to become a homeowner. My wife kept my proclivities in check with flattery: “Being selective worked out so well in choosing a husband, I decided to remain equally selective in house hunting.” She had me at hello.
Thanks entirely to my wife’s selectivity, we found ourselves in a position of strength to purchase our home in 2009, just before kid #2 came along. We had set aside a large cash down payment just before the market tanked, and the price correction also meant that significantly larger, nicer houses dropped into our price range. After seeing so many tool sheds, we were excited by what we could now afford.
We bought a big house near the Pacific that is walkable to the elementary, junior high and high schools. Here’s what we did right, and what I would do differently now.
Great Public Schools
One of our primary considerations was a terrific public school district. In LA, you can pay a lot for a decent home with great public schools, or pay less for a luxurious home with undesirable public schools. We wanted the former, and I think the financial argument supports us.
We expect our home price to keep pace with inflation, so when we are ready to sell we hope to get our funds back. I regard our home as a consumption item more than an investment, so while I’m thrilled we got to live a beautiful place, I don’t expect a return superior to what my total market index fund at Vanguard would have yielded us over the same period of time with dividends reinvested. Parochial or private education has tremendous non-economic value for many people, but you don’t get to pull your dollars out after they’ve been spent on education.
We are in a terrific district that provides what I’d term an “enclave public education.” Basically, high achievement is the expectation and the norm, most children come from high-achieving families, and opportunities for STEM experience abound.
Buying a “turnkey” property, one that is updated and ready to move into immediately, was a good move for us. We were about to have our second kid, and had neither experience nor tolerance to handle a major renovation by purchasing a fixer upper. Fortunes have been built by folks who can live in a home, update it, and flip it. We knew we were not those folks.
We also love the flow - spaces are open, ceilings are high, and the natural light buoys us. That damn year I subscribed to Dwell magazine made me love these non-Mustachian features.
Larger house vs. Larger Yard
We sacrificed having a traditional flat yard (we have a large wood deck where the kids play, but little usable lawn) in exchange for more interior space, but accepted this trade off and have no regrets. We had a designated play room we kept free of furniture and used for tumbling, legos, dancing and board games until last year. It is transforming into a library, game and study room.
We bought a corner lot on a less busy residential street. This was a great decision, as we’ve come to know the neighbors on our sleepy block and we seldom worry about the kids being in harm’s way due to car traffic. Our kids can walk to every school they’ll need to attend between now and when they enter university, and we fully expect them to do so.
Where we chose to live, there are 4 variants of home/lot combinations. First are mid-century modern homes circa 1950s (large lots, small living spaces, rare to find the cool architecture we associate with the period). Next come 1960s homes (stacked boxes with smaller living spaces and mid-size lots with flat, usable yards). Our home falls into the third category of 1970s homes (cathedral ceilings, enormous interior spaces on smaller lots built into hillsides, offering either an ocean view or a smaller flat yard but seldom both). Finally, in a class I will never aspire to join but appreciate from afar, are the estates (mostly 1970s build or later, with terraced yards including pool, tennis court, and large yards).
I’m happy with our setup - we have a large rear deck with an ancient hot tub where the kids play, a thinner wraparound deck with an ocean view for sunsets and summer al fresco dinners, and a periphery that boasts plenty of fruit trees without the enormous maintenance costs that would accompany a larger garden area. Like being upgraded to business class, our ocean view is a luxury that we lucked into and definitely appreciate but never sought out (thanks burst housing bubble!).
Home Square Footage
This is my greatest regret - we simply bought too much house. We bought planning to host visitors, and we do get parents and in-laws on a regular basis. We have hosted Thanksgiving with family from both sides for most of the past decade, which draws up to a dozen people to saturate every space our home offers (we’re talking newborns in closets and futons in the laundry room). I treasure the memories we’ve made, and our out of state family is grateful to visit California during times of inclement weather. But we’d have been far better off treating our family to mid-range hotel rooms each holiday and saving and investing the difference between our current home and one ⅔ the size.
In my homeowner fantasy, we happily entertained everyone. In my homeowner reality, plumbing repairs have cost us upwards of $20,000 so far, the hot tub is now defunct and too old to repair, and every year brings a new stressor (radon testing?). The few times a year we entertain cannot possibly justify the excess space we use infrequently.
That excess space hurts because recurring maintenance costs have become a trap for me. Our home is big enough to be a pain to clean, meaning we pay for help in cleaning it. We’ve modified it to our liking over the years, so my wife is reluctant to downsize into something she’ll enjoy less while the kids are pre-college. It’s also a trap because more space fills with more stuff, which leads to more cycles of purchase and decluttering.
In the next installment, I'll share my Home Selling Fantasies
Financial Literacy for The Newly Minted Physician