Save for retirement or buy a condo?

I'm interested in getting some opinions on this. I'm 37 years old and don't plan to retire for at least 20 years. Over the past few years I've been able to contribute between $700 & $900 monthly on a pre-tax basis to my employer's retirement savings plan. My contributions are currently invested in approximately 75% stocks and 25% bonds. One of the reasons I can contribute so much is that I rent an apartment with 2 other people and so the rent is VERY cheap. Now I'm considering buying a condo here in San Diego (I can't afford a house), but in order to afford the mortgage I will pretty much have to stop contributing to the retirement savings plan. So my dilemma is, what will be most beneficial to me in the long run: continuing to contribute large amounts to my retirement savings plan, or purchasing a condo now in this buyer's market? If more information is needed let me know and I'll be happy to add more details. Having my roommates move into the condo with me was considered and rejected for several reasons. First, I think we've all had about enough of each other. Second, I would then need to buy a 2- or 3-bedroom place instead of the 1-bedroom for just myself. And finally, doing this would put me in a "landlord" type role where I would need to collect rent, address complaints, find a new tenant if someone moved out, etc. All-in-all, I just decided it was too much of a hassle to manage with such a long-term commitment.

Public Comments

1. Why not buy a condo and get your two roommates to move in to help with the payments?
2. I say go for the condo. You're 37, get a place of your own and enjoy some of these pre-retirement years you have left. You can always rent out your condo or sell it at a future date if you decide to go in another direction.
3. your paying 1/3 of the rent? and banking in a 401k 700-900 a month? that is definitely the best thing to do from a money point. If you were on the hook for 100% of the rent, then things are different, but if your happy enough with the living arangements, nothing will beat that pre-tax investment. the big thing to consider is that living arrangement, your living in 1/3 of a residence! you need to compare apples to apples, what if you bought the place your currrently living in and then you become the landlord to your roomates?
4. How much has the price of condo come down? If it is substantial amount, then it is worth to consider purchasing it. It is good not to put all yr eggs in one basket. Good performance mutual trusts can be one of the options too. Nevertheless, investing in property during buyers' market is a wise choice. Good luck.
5. Determine what are your after tax costs of renting versus buying with your tax accountant or financial advisor. When you pay interest on a loan for your primary residence, you can deduct it. When you pay property taxes on your residence, you can deduct it on your taxes. Your maintenance cost will go up. You can not deduct it unless it is a rental. Another consideration is how long do you plan on living in the area? If you see yourself being in that community for 5 years or more, it make alot of sense to your well being to buy. Pride of ownership is worth alot.
6. More research on your part is needed here my friend. Since you and I are about the same age, I can relate to your dilemma. First of all, condos don't appreciate as much as single family homes. Plus, the monthly maintenance fees could sky rocket or the condo association board members may be difficult to deal with. Those two things you'll have to weigh against. When you buy real estate, you can deduct your mortgage interest saving you a few hundered dollars off your tax return. But your retirement contribution isn't taxed plus you might be getting savers credit. So you have to compare the numbers and figure out which path is better. Do you want your own living space? Are you planning to live in San Diego for the next 5 to 10 yrs? If the rent is very cheap and you don't mind roommates then I not buy a condo. Instead, I would investigate buying a house that will appreciate faster. Actually, I would look into buying a house that you can rent out and see anyone in your family that would partner up with you. If you buy a duplex you can live in one and rent out the other and deduct all your expenses for the half that you rent. That is a very good tax deduction. The market is expected to go down even more the next 6 months. I'd wait a little longer before buying. Or you can buy a condo and get people to live with you and help you pay your mortgage. It just depends on what your goals are. Do you want to have a roof over your head that's paid for in 20-30 yrs or do you want to have money put away to do whatever with when you retire? It is best if you can own a house and still put money away for your retirement. But if you have been putting money away for the past 10 to 15 yrs, you may be able to take a break from saving for retirement and use the money to buy a piece of real estate. I would talk to a tax preparer and an investment advisor about this. Good luck.