Having recently moved to the Bay Area, I cannot bring myself to even thinking of buying a place here. The weather is amazing, this is absolutely true. The place is beautiful (although if you have traveled much, you know it isn’t the end-all-be-all some make it out to be either, but anyway). Then again, many beautiful places don’t have vibrant economies. The combination of both is the key. The people have struck me as very friendly and open. I love it. There is a vitality to the place that is contagious. I take the Caltrain from the peninsula and I love it. Commuting from the peninsula is a breeze. What are people moaning about? The water is waaaay too cold. I love swimming when I go the beach. The whole beach thing has become a non-issue for me because of this. It actually lowers the appeal of the whole place for me. Cost of living other than housing is not much worse than most major cities in the US… i haven’t crunched the numbers, just my general observation. If your housing is taken care of, this is indeed a great, great place to live and work.
We will probably only live here for 8-10 years max, until our kids go to college. Even if we held on to a Bay Area house, the rent-to-price ratio seems very low, so probably not worth tying up so much equity in it. We rented out our 800K house in our previous city. The rent we get from that house more than covers our rent here, for a house priced at >2x (per zillow). I was shocked by that.
Sooo, I guess I will watch form the sidelines and see my neighbors get rich off their houses. I can’t risk it. Even if the market drops, prices probably wont go down much. Excluding the older folks with the prop (whatever the number is), with a frozen tax basis and paid off houses, everyone else seems to be relying on the “greater fool theory”. Well, I am afraid it will probably keep on working here. For all those hoping for a correction, I hate to say it, but if this is too much for your gut now, it will probably stay that way forever. If this is not your “forever” place, just rent and vent like me!
Welcome aboard!!! As you can see, we will chat mostly about RE/investments but will on occasion take a detour to chinese food and The Donald (not necessarily in that order)…
Hmmm, hey honey, can you reverse frame back about 10 seconds? I don’t care about the movie’s “plot”…i just want to know if that is a beauty mark or a tattoo…
Gosh, do you think I should close the window drapes too???
How likely is it that Bay Area prices double again by 2027? even if they do, that is a ~7% compound return. With inflation and taxes and maintenance… uhmm… not too hot. Do you expect a triple from here? Quadruple?
I actually think the sweet spot of prediction accuracy is 5 to 10 years. Anything beyond the fundamentals may have changed. Anything shorter has too much short term random fluctuations.
May not double in 10 years. But I also think it’s very unlikely it will go down, even in inflation adjusted terms.
My point is that it’s better to be consistent logically. If you think prices will most likely be higher, it seems to me the logical conclusion is to buy today, assuming that’s the only consideration.
Macroeconomic indicator predictions from reputable sources (IMF etc) have been shown to fail/succeed with equal probability when predictions are longer than 5 years.
Other point is this low interest rate environment(if it continues) has been pushing up asset prices globally. Some of the Scandinavian countries house prices are really high now.
