I'll just rent and vent I guess :-) Newcomer observations

[sfdragonboy]

@Rent_and_Vent

We will probably only live here for 8-10 years max, until our kids go to college.

Ok, I take “offense” to this statement … explain please. You just said this is a great, great place to live…yet you plan to move. Why? (You prob don’t know, but I am an SF native and probably the loudest cheerleader for the Bay Area as anyone…)

[wuqijun]

Because he/she wants to take advantage of the school system here for his kids? Which also explains why my offer of a $400k house in BA doesn’t sound appealing to him/her…

[Rent_and_Vent]

@manch

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.

I am being logical. I think house prices will likely be higher. I don’t think the return will be worth tying up a huge % of my net worth in a relatively non-liquid asset. TIPS are also guaranteed to be higher in 10 years, I won’t be buying those either. It’s all about the relative performance of different asset classes.

[manch]

@Rent_and_Vent

It’s all about the relative performance of different asset classes.

OK. That’s fair.

[Rent_and_Vent]

@sfdragonboy

Ok, I take “offense” to this statement … explain please. You just said this is a great, great place to live…yet you plan to move. Why? (You prob don’t know, but I am an SF native and probably the loudest cheerleader for the Bay Area as anyone…)

We had our kids late. I’ll probably be retiring in 10 years. There are many other great places to live at much lower cost if you don’t NEED to be here for your job. I love the Bay Area, but if you are retired and have no family here, there are many other choices. And like I said, the water is too cold!

[Roy321]

@Rent_and_Vent

We will probably only live here for 8-10 years max, until our kids go to college.

What if kids decide to go to college here or work here after college? Just throwing it out here

[sfdragonboy]

Ok, but what if lil Johnny and Jane make it to Cal or Stanford (please, no postings about the order…)??? Are these not fine institutions of higher learning??? Then, you can stay and enjoy our frigid waters…

[wuqijun]

I think with global warming the beach here is going to be just right in 10 years…

[Roy321]

@Rent_and_Vent

I don’t think the return will be worth tying up a huge % of my net worth in a relatively non-liquid asset. TIPS are also guaranteed to be higher in 10 years, I won’t be buying those either. It’s all about the relative performance of different asset classes.

Stocks - (high risk & high volatility - higher returns)
Housing -(low risk & low volatility - lower returns) + Provides place to live (Primary home)

This tells me for a Primary home I would not look at it as only an asset class.

[Roy321]

@wuqijun

I think with global warming the beach here is going to be just right in 10 years…

sea rising in the Bay Area???

[Rent_and_Vent]

@Roy321

What if kids decide to go to college here or work here after college? Just throwing it out here

we’ll still be here when they apply… they’ll want to go as far away from us as possible… so no worries

[wuqijun]

Uh oh… Foster City and Alviso you guys better watch out!!!

[sfdragonboy]

@wuqijun

I think with global warming the beach here is going to be just right in 10 years…

Correcto… see my post elsewhere about the bump in Outer Sunset home pricing to now over 1M…

[hanera]

@Rent_and_Vent

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.

Anyone has a good explanation why rent relative to the house price is so low in Bay Area? Is it limited by income?

@Roy321

Other point is this low interest rate environment(if it continues) has been pushing up asset prices globally.

Interest rate has been in a down trend for a few decades, likely to continue.

@Rent_and_Vent

We will probably only live here for 8-10 years max, until our kids go to college.

That was my plan when I arrived in 2002, I bought. Still here, btw.

[wuqijun]

That’s because you made $$ from the stock market. Let’s hope this poor soul can end up the same way you did…

[MM_HH]

@Rent_and_Vent

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 m

IMO prices are at/near the peak for this cycle. Nasdaq is looking topped out, trend is more people leaving than coming to the bay. Don’t get too bummed. Wait for a drop…maybe 20% (that is about what it was in 2001 and 2008) and be prepared to max your budget out and buy when prices do drop.

I think the bay area could get hit harder than it did in 2008. There has been a huge tech boom here that softened the 2008 recession in the bay. Google, Apple and others were growing like crazy through the last recession. If we have a recession more like 2001 (tech bubble popping), things could really take a hit here in a way that hasn’t been seen in awhile.

[Rent_and_Vent]

@MM_HH

Wait for a drop…maybe 20% (that is about what it was in 2001 and 2008) and be prepared to max your budget out and buy when prices do drop.

if this happens, would things go back to “normal”, where you can make an offer that is non-cash, 20% down mortgage, no overbidding… or is the market like that even during bad times, just with less people participating. What was it like during the other slowdowns?

[MM_HH]

@Rent_and_Vent

@MM_HH

Wait for a drop…maybe 20% (that is about what it was in 2001 and 2008) and be prepared to max your budget out and buy when prices do drop.

if this happens, would things go back to “normal”, where you can make an offer that is non-cash, 20% down mortgage, no overbidding… or is the market like that even during bad times, just with less people participating. What was it like during the other slowdowns?

Last downturn there were crazy financing requirements that overcorrected for the mortgage crisis. I don’t think that will happen this time. But there are always lots of people with cash buying properties here so it’s unlikely to be “normal” but if you have a steady job and 20% down it is easier to find something in a downturn. It still won’t be your dream home, there maybe overbidding, but you’ll probably make some money next boom/bust cycle.

[MM_HH]

@Rent_and_Vent

@MM_HH

Wait for a drop…maybe 20% (that is about what it was in 2001 and 2008) and be prepared to max your budget out and buy when prices do drop.

if this happens, would things go back to “normal”, where you can make an offer that is non-cash, 20% down mortgage, no overbidding… or is the market like that even during bad times, just with less people participating. What was it like during the other slowdowns?

Also when it comes to overbidding, I wouldn’t put much weight in list prices. Figure out what the going $/sq ft is in the neighborhood you like (can use redfin to see recent purchases) and use that to ballpark what the price will actually be or you’ll be continually disappointed by the Deleon’s that underprice to start a bidding war.

[marcus335]

If your kids have 8-10 years of school left, then odds are you won’t be able to keep your same rental that whole time. Then you’ll have to deal with the stress of trying to find another rental in the same school district for your kids. If you buy, then you don’t have to worry about that. I think that’s a major reason people buy.