70k Price drop in Milpitas!

Coming back to original post:

Is milpitas slowing down? Any 1st hand experiences?

My friend was telling his neighborhood homes stays more than 45 days around 1.1M level in Milpitas. He bought exatly similar home during 2011 for 725k.

My criteria for buying a home for my living is simple.

Should be able to pay for mortgage+ living costs+tiny saving on ONE salary .

I think by this criteria most Bay Area homes are becoming unaffordable.

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Agree about one salary. Never know when you will get laid off, so if you shoot for one salary you are better off.

If I buy now, Im worried about buying at the top. I’m ready for a downpayment now after 1 year of savings or so.

I would happily take a 20% price cut + 100% increase in interest rate. I know I will get a chance to refinance at a low rate in the future. I cant change the price.

If fed keeps interest rates like this, Bay area is becoming unaffordable with 10% YOY increase.

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I know the price cut was severe in 2008. However, what I have read on the redfin forum & this forum is that in the dot com recession of 2000-2001 there was not much of a price cut. By that criteria even in another normal recession a 20% cut might not happen.

Agree. Good schools like cupertino area only saw 8% downside but 100% upside after recession.

10% cut is in order I think in decent/avg school districts. I am ok to buy at late 2014 price. Since then it seems like limited inventory and emotional buyers pushing the prices higher.

I am hearing more inventory now and I think that will put some price pressure. ??

I had to become one of those buyers last year. Bought almost 12% above listing. :cry: Basically within the same neighborhoods good houses(well maintained, no termites, reasonably updated, all 3 good schools, away from busy roads/road noise, cul de sac, walking distance to park,commute 20 mins to major work locations in normal traffic & 40 minutes in busy traffic etc etc ) go into a bidding war.
Again, I wasn’t emotional, it’s just I had to compete with other emotional buyers. :stuck_out_tongue:

I am hearing more inventory now and I think that will put some price pressure. ??

Number of sales are down for sure. Don’t have comparative data on inventory.

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With someforesight, could you suggest some areas now for me?

srinivas,

There is so much to consider, for example, is this for strictly investment or for personal living? A lot of posters here value strong school districts (granted they have kids) in generally speaking expensive cities. Yes, great, but I would like to have dated Cindy Crawford in my other life too. Realistically, not everyone can afford a $2M home.

In the other thread, I think you hit it right on about Union City as a potential area again if you follow the theory that water levels out eventually. The addage, “buy low, sell high” is always in play. If Union City is a direct shot from PA across a bridge “water” may flow towards that way especially if Uber is planning to expand its PA presence as reported. Hey, people have to live somewhere, it mind as well be Union City. It is not rocket science. Buy in the cheaper areas that truly do have potential though. I mean, if an area has something that is NOT ever going to change in the foreseeable future, like a low income housing project across the street or a freeway behind you, you probably want to avoid it.

There is always the misconception that once you buy something that it is going to be it forever. Of course, not. You could buy a property, fix it up and sell it and trade up to a bigger place. People have been doing this for a long time. I know people with kids who buy, remodel, take their 500k capital gain free profits and throw it into the new place. It is worth repeating: it is not where you start but where you end up. Good luck!!!

@sfdragonboy Newark,CA a potential area, 10 mins away from FB hQ and all pricey homes across dumbarton, menlo park, RWC, palo alto, etc.

Schools are bad. A new 550 home property is coming right off dumbarton on thornton by william lyon.

SFH brand new for 750ish. Worth it?

Expectation is now probably only 1 more rate increase this year.

That’s my feeling too, no choice by have to be the greatest fool, estimate the highest bidder’s price, throw in a Lexus.

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Yes but 2008 was not a normal recession. I don’t expect a 2008 like recession next whenever it happens(IMO not in the next 12 months, of course anything can happen). 2000-2001 recession effect from the graph seems fairly benign in comparison across all areas & not just Cupertino.

Yes, what you say might happen. But I wouldn’t bet on it because, unlike 2008 the buyers now are of higher quality(income verification,higher credit scores, longer salary history) & have much more equity in their house. So, panicky house sales with people walking away under the similar circumstances like last time might not happen. It might happen due to some other reason this time(different from a financial/banking/mortgage crisis) my thought is the scale of that whenever that happens will be much smaller.

Even Yellen Keep on telling the same, but they won’t do it in 2016.

If someone listened Yellen Testimony to Congress, the last two quarters GDP growth is well below 2015 and job addition is very poor. Looks like companies profitability declined and job hiring stopped. This is an aftermath of 0.25% increase in Dec 2015.

With current status, my guesstimate is FED CAN NOT RAISE 0.25% for next one year. If they do, we go to correction territory for which FED may not have sufficient backup.

News papers will not reflect correct news as they need issues to improve their ratings just like they headline TRUMP always !!!

This 2.5 hours testimony. If someone has time, go through complete Q & A.

http://www.c-span.org/video/?410614-1/janet-yellen-testifies-us-monetary-policy-economy

FED will not increase rate until Feb 2017…Considering election year.

But, our bay area is affected by negative growth of Tech(=3) and BioTech(=2) industries ( next to Oil/energy=1 )

:slight_smile: We will know by the end of this year.

I was hoping the $250K base salary Data Scientists can predict this. :stuck_out_tongue_winking_eye: Data Science needs more research.

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Thanks for the response sfdragonboy!

Yes thinking of buying something for investment. But then again, I bought one for primary home last year. Maybe I should wait. Buying 2 at the top might be a bad idea?

srinivas,

Well, keep your eyes and ears open. I take it you are ready to go and have been pre-approved for an actual loan? You do realize investment purchases require more down typically than a primary residence right?

Because of the timing right now, I would imagine everyone is looking so it might be even more competitive and expensive. Perhaps you wait until after school starts and/or maybe end of the year when things can slow down and then assess whether you still want to buy at that point. In the meantime, do your research and know your target neighborhoods like the back of your hand. I have driven to areas and actually talked to folks watering their lawns to get a sense of the area. I have also driven to areas at night to see if any extra-curricular activity is going on. Since investment, be up to date on current rents for identical properties. Project your cash flow position. Are you going to be fine as opposed to being tapped out on cash? What if an emergency happens, do you have enough funds after your buy to handle most things? Keep in mind the dreaded property tax bills too. See you at the next open house… :grin:

Just listen to Yellen answers, easy to derive the details.

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Brand new? How big? How much rent do you think you can get easily (go conservative, now) for it? Assuming you got that, and taking into consideration any owner paid bills, insurance and property taxes, what is your cash flow position like? Can you survive fine without that rent money for a few months?

As a test, go look on Craigslist for something comparable and maybe even call the owner of one and pretend to be an interested party. Feel him/her out to see if there is any indication that a lot or few folks are interested. If some listings are lingering out there, probably rents are too high or the areas suck and should not be used as your benchmark.

Obviously, the school situation needs more investigating. Are the scores at least rising? Check local crime ratings too. I would go to that area on a weekend and talk to folks who look like they have families there and ask them about the schools. When I go through a neighborhood, either day or night I take it all in. I walk the neighborhood completely for blocks around the target area and may even ask someone, hey, I am thinking of buying here, what do you think? People are usually pretty chatty if you are nice. Are there good or negative vibes happening?

Definitely check recent sales in the area and determine where your property stands in relation. Should it be better or worse due to X…and so on. Keep track of the recently sold ones, and as you drive through maybe you get lucky and see the actual owner working on his house. Start up a conversation. Ask good questions. You may get some insight on the quality of folks moving in there. Obviously, if a bunch of Sec 8 renters keep popping up, keep driving…:grin: Good luck!!!

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@sfdragonboy You are the resident mentor for me. Thanks!

3 bed 3 bath 1712 SQFT SFH brand new. 3 storied but all beds in 2nd floor. Extra loft in 3rd floor. Nice floorplan when compared with all new construction.

Any idea about Newark in general though?

small city 60k population i think, so easy for the makeover, like Ardenwood area in fremont, over time could catch up with easy access to dumbarton. Like you have been saying need asians to move in troves for the school district to become better.