patrick.net

troutman says

the happiest people i know are fishermen.

That's funny. My husband is a mechanic by day, and a fisherman every moment he's not at work or sleeping. he is the happiest person I know. We live in a small house in a friendly, working class area. We live minutes from the Bay.

Life here is good, neither of us could live the same life we live anywhere else.

Mmmmmm.....I just remembered we are eating fresh Sturgeon tonight, ust caught it this past weekend. Over the weekend we had crab Saturday night, and fish tacos with fresh caught bass on Sunday. Not only did he catch a 60" sturgeon Sunday, but it had a $100 tag on it! Yum... Love the Bay Area.

I know people who are computer programmers, waiters, engineers, shop keepers, mechanics, and a whole slew of other folks who are perfectly happy. Its a sort of generic statement to claim that fishermen alone are privy to exclusive happiness. There's most definitely a large quantity of working class people who are barely making the ends meet. I doubt they're happy as clams.Likewise there's tons of super-rich people who are equally unhappy because money doesn't necessarily buy happiness.

As far as us, well despite the recession we're doing the best we've ever done. We're pretty content at the moment. My contentedness comes from having experienced what its like to make working class wages for years on end and then transitioning into a career that makes good money. Would I trade that for going back to scraping by? Hell no. Been there. Done that.

HELL YEA TROUTMAN! Did not know they had sturgeon in CA. News to me. Never had sturgeon I have seen them however. Give me a nice Mahi any day. Swell fish. One if by dawn Two if by dusk. I even had a crane that used to fish with me. Loved that little guy. I would get near a certain point on the shore and he would usually show up. Trout, Pike, Walleye, Snapper, Bass fished for them all. Not much on catch and release though. More for dinner. That and some rosemary potatos and I'm a good guy.

@Tude, Just curious. Do you have a boat or does your husband fish off a pier.
@edvard, Almost did a spit take when I saw the thread. I guess the only other factor that you might consider is if your landlords are getting up in years. Are their kids take-the-money-and-run types (ie prone to sell the house when the parents pass). Otherwise, you've got those Prop 13 golden handcuffs (that are just as hard to escape -- even as a renter!)

EBGuy says

Otherwise, you've got those Prop 13 golden handcuffs (that are just as hard to escape -- even as a renter!)

Yeah... that's just the thing. Its a BIG house in a nice neighborhood and since we take care of the place the landlords are kind enough not to raise the rent. So the reality is that in buying we would be paying more for less anyway you cut it. Like I said- its a cozy situation. I can't see them selling it anytime soon.

EBGuy says

@Tude, Just curious. Do you have a boat or does your husband fish off a pier.

We don't have a boat (yet...not for lack of him shopping for one!) but in his group of guys they have 3 boats between them. Every weekend they are either up by the mothball fleet, up the Napa river, out in the Bay, or sometimes out the gate and up the coast.

There is an abundance of Sturgeon, Striper, Halibut, plus Salmon and crab when in season. Yum!

edvard2 says

But from what I've heard, you have to have absolutely STELLAR everything to get that rate.

Not quuuite STELLAR but close. They'll want near 800 credit score, a job history of 2 yr or more at current employer, 20% down, 6 months worth of payments ready to go and sitting in the bank account, and nearly no other debt. At all. Also your income will have to work out be around ~1/3 the price of the home.

Surprise surprise right?

The thing is even if you're off 2 or 3 of those things you can still get a fantastic rate. My brother bought recently and his credit is TERRIBLE (500-ish) and his income at a job he'd been working for only a month was about 1/4 the price of the home but he had the 20% down payment with savings in the bank as well as no other debt and he was able to get a home with a 4.6% rate on a 30 yr fixed loan.

He bought quite a nice home in ID for $140K, 2,300sq ft + .25 acre 2011 construction 4 bed + 2.5 bath + 3 car garage, probably would've cost him over $400K in CA easy.

The payment difference between what his paying with a ~4.6% rate and a 3.5% rate is something like only $80 a month IIRC. The full PITI for him is something like $780, but he puts down extra a month to try and pay the loan off quicker.

Anyways don't get hung up on interest rates right now. Even a "bad" rate is still very good. If you're gonna buy do your damndest to get that principal (IOW buy price) down!

can't... stop... laughing....

Sorry. carry on.

mmpf...ahahahahahaha! But houses are SO MUCH CHEAPER IN TENNESSEE!!!!!!

Well... all very useful information. As you can tell I have like absolutely zero knowledge of mortgages and so on. The thought of buying hasn't crossed my mind until recently and besides, like your brother, the idea of buying out of state is still very much a possibility because in that case I wouldn't bother with worrying about interest rates and down payments because I's just buy something outright and call it a day.

Anyway, as mentioned this is all extremely preliminary. The fact that I'm even thinking buying about seems crazy to me because at the end of the day prices in the Bay area are still grossly out of whack and truthfully, buying a house at this time wouldn't create any sort of real advantage other than the cozy feelings it might bring ( until the plumbing breaks or the roof needs replacing) Our rent situation is fairly unique and we've been able to take advantage of it for 9 years so far so I suppose it wouldn't hurt to just keep right on renting it.

Stay tuned...

edvard2 says

The thought of buying hasn't crossed my mind until recently and besides, like your brother, the idea of buying out of state is still very much a possibility because in that case I wouldn't bother with worrying about interest rates and down payments because I's just buy something outright and call it a day

Yea, it really isn't worth it to buy in CA in any decent area. Particularly if you live in or near the Bay area which still has bubblish prices IMO. If you move out of state you'll have to find new jobs or possibly even new careers, but if the house is paid off your cost of living will be near nothing, so that is a factor to consider too. I think taxes + insurance +HOA on my brothers' home would be around $190 a month, which would be about all he'd have to pay if the mortgage was paid off.

Personally I'd just move out of state if I was able to pull that off since I could get by just fine even if I had to work a crappy McJob for a while before I'd find a OK job. Good luck either way though.

you are very complicated man. Just do it! go to the bank, let them tell you what you can afford, with just your income , not counting your wife's income so that you can have a breather.
Once you know the figure, go open houses, start the process man!...you are so slow...

tts says

Yea, it really isn't worth it to buy in CA in any decent area. Particularly if you live in or near the Bay area which still has bubblish prices IMO. If you move out of state you'll have to find new jobs or possibly even new careers, but if the house is paid off your cost of living will be near nothing, so that is a factor to consider too. I think taxes + insurance +HOA on my brothers' home would be around $190 a month, which would be about all he'd have to pay if the mortgage was paid off.

Oh you'd better believe I think about this all the time. Every time I go visit my folks I'll pick up a couple of real estate magazines. There's nice older houses in older, semi-desirable neighborhoods near town for well under 150k. Some under 100k. We're not talking bland cookie cutter houses. These are the same kinds of old homes that would demand a million bucks most anywhere in the Bay Area. The difference is startling. I've thought about the math over and over. Staying here or moving out would have very different outcomes. Moving out means buying a house and calling it a day. That pretty much leaves health insurance as the largest remaining cost which isn't anything to scoff at. That means getting a job that provides it. It can be done. In fact, one of my college friends has the same background and works in my field back home and does pretty well. He and his wife live right downtown and have a pretty nice old home.

I think what it is is that I'm too damned comfortable. As mentioned I'm a cheap bastard, like saving cash and after all the saving don't really love the idea of spending craploads of it on a house. Then again- I could do either or. Arg. As you can tell I'm a ramblin' man.

For whoever wants to hear my story. I bought a condo in Van Nuys, CA at an auction at the end of the last recession in 1993. 10 months later the Northridge earthquake struck. Luckily, it was a new building and was green tagged which means I could live in it. Every other condo I had looked at was yellow or red tagged which would have meant I could not live in the condo. I was 'upside down' for a decade, so, I know what that is like. I sold the property in 2004, pretty much at the high end of the bubble and purchased a property in Dallas, Texas outright. The only risk I took was I needed to find a job and the California job I had was ending anyway, in fact the company ended up bankrupt. Guess what? Besides two contracts, NO ONE would hire me in Texas. I took contract work in other states. To make a long story short, yeah, be careful where you buy. Detroit is cheap but I don't think it's a good idea to buy there. Live and learn. I appreciate California much more now. I have always found work here, even in this downturn. From a Real Estate perspective, it wasn't too bad a decision, the value hasn't tanked much, I have rented it (although currently vacant) and someday will sell and buy again.

edvard2 says

I think what it is is that I'm too damned comfortable.

Change can be scary, especially when you know that the economy is bad all over.

I may come off as blase about moving...but that is only because I've done it so much. I've been all over the country so moving out of state doesn't bother me one bit. The only factor that has kept me in CA so far is finding a job out of state. Once I do that I'm gone.

Now obviously moving to a place like say, Detroit, is probably a losing proposition to put it mildly. But there are other places out there where homes are far less than in CA but the economy is about the same or slightly better. You definitely have to research the area more than a little before you buy. And don't rely on sites like Zillow at all.

I appreciate your perspective. Yes- indeed the job part is probably the biggest issue for me. The job market frankly sucks. I'm in no hurry to find another as for one I like my job. But also, as someone who was laid off for a few months in 2009, its pretty BAD out there and I am glad to have a job. Period. The experience sort of scared me about jobs in general and thus again- I'm happy to be gainfully employed. Thus its natural to simply turn to thoughts of just staying because frankly things are stable for us and we could and could also probably buy a house. On the other hand that means jumping into a big mortgage like everyone else in the bay area for a house I know isn't worth diddly squat anywhere else. The idea still seems so ridiculously counter-intuitive. $500k for a small, formerly working class tenant house? Sure.... I mean, that house would be 50k anywhere else, but I guess its the bay area and all. Yeah... right...

When I was laid off I made some very concentrated efforts to get work in other states. Places like Austin are apparently swamped with out of state applicants because every other call I was on with someone there wound up turning into where I was from and so on, followed with them telling me they had sooo many Californians applying. Yeah- so people wanting to move somewhere cheaper- expressly people from the coasts- isn'y a new idea and a LOT of people are doing it. Many who have zero clue about these places. They've just heard they're neat or cool. I actually went to Austin and its pretty cool. But jobs sound difficult to get. Oh well.

Moving to other states doesn't bother me except I cannot stand crappy cold weather. I did the east coast for a few years. Forget it- that weather just sucks. So basically I am looking at mostly sun belt states. Sure- it gets hot but I grew up with that so big whoop. I can deal with heat. Not -10 degree winters. I've driven across country a lot and its a nice country. The Bay Area is nice. But it isn't THE place to be. The things that suck about it more or less cancel out the positives. So its just ok. Not great. Not terrible. Just bearable.

edvard2 says

The things that suck about it more or less cancel out the positives.

What exactly are the things that suck? Because personally, the only thing that sucks is the cost (for me) and there are ways to get around that.

What I don't understand is why are people always talking about the house one can get for the money somewhere else? What is the obsession of people with big, fancy houses? A house is a place to store your stuff, eat, sleep and shit. My life is lived outside of my house. And when I am home I prefer to spend as much time as possible in the yard, enjoying the beauty and weather. My 1000sf is cute, cozy and ecologically friendly. My utilities and maintenance costs next to nothing.

Seriously, I just don't get people needing big homes and material things to make them happy. What makes me happy is to live simply, in a place I love, surrounded by friends in a place of beauty with wonderful things to do wherever I turn.

edvard2 says

Moving to other states doesn't bother me except I cannot stand crappy cold weather.

Yea I got used to CA weather too so that had me looking for states with similar weather, which I thought would be tough to find. I thought Boise would have terrible weather, but its only around 10-20 degrees cooler than southern CA in winter and about as hot in summer. This means it gets some snow, but only avg. around 1-2" a year, which is hardly anything at all.

Now apparently if you go outside Boise an hour or 2 north or into the mountains then the weather is about as bad as you might expect.

Anyways the point is that weather can very different than what you might expect at first because of local geography. Try looking at what the local weather is for the city you're interested in online. Then consider home prices and then you start looking for a job there if everything else checks out.

Pro tip: get a 2nd cell phone and have the number changed to a local area code for where you're looking for a job if you're serious about moving. Makes a world of difference and doesn't cost much money either.

Tude says

What I don't understand is why are people always talking about the house one can get for the money somewhere else? What is the obsession of people with big, fancy houses?

Its not necessarily about "big, fancy houses" but most ANY house is still expensive. Even the fairly crappy ones in CA aren't really cheap once you consider how much it costs to fix them up or the area they're in, which is often terrible and/or far from work.

Appreciation. I have always had to run my ass off. Be in most every deal in that kind of market. I am glad it's over. Dealing with mortgage companies. Attorney's. Realtor's. It's a great big pain. When the deals collapse. It takes a lot out of you.

Location, location. Who knows what makes a market hot. Usually it has something to do with commercial projects or planned use in the future. That you may not know. Like a Wal-Mart and surrounding area. Some you understand. Some you don't. Consuming a lot of cheap land. Then throwing in some infrustructure for Subdivisions. That may appear to be some sparsley occupied area.

I lean to the trendy in that respect however don't limit myself. I like the hippness of a cool little villiage filled with hip bars and casual people. In my concerns you never limit yourself however. Cause trendy can get tricky. You have to know the lay of the land. Well.

Dosen't hurt to hang around some big developers either. Thats mostly over however. Commerical is down for the most part.

It's time to sit and wait. I kind of resent the Realtor's pushing things right now. Investors are my comrades. But hey I have Realtor friends in that to. Realtor's have to eat I guess. It's my point of resistance. The phone calls have subsided in that respect. I guess they get the idea.

I like Realtor's ok. Investor's imano, imano. There are some that are unfriendly as shit. To be sure. All business. See. I eat with these people. Go to their parties. We look at each others deals. It's another world. It's filled with fuck off world. We don't care. We don't need you and no one runs our lives. I love other investors for that and they love me in the same respect. Christmas. I will have a few select Realtors. A few select attorney's and their staff. A boatload of investors. Their families. We do right by each other for the most part. Believe it or not. Dealing of course. To be sure. More of fun than to much seriousness. Some of my friends make Obama's mortgage plan look stupid. Letting tenants go and go and go without paying. Most of them at least my friends are not like a crappy lender trying to foreclose. Harrassing them with letters and phone calls. I live in a world where things can be worked out. So now is not a time of patience with me. Just sit back and enjoy. Buying in a negative equity market with anything less than 40% under market. Is suicde in my opinion. However some of the drivers of the Real Estate industry have to eat. So I guess I have endure some stupidity.

I love California. Always have. I like everything about it. Why I don't move there. Getting to know a new market well isn't as easy as it may seem. I know this one well. I envy you for those beautifull hills. The ocean. Really hip and cool people. In many places. I like things like Berkley, SF the people in those types of neighborhoods. Hey I have things like that here to. A little sophistication please... I guess i need that in my life.

Pure dynamite Patrick really good thanks:

http://www.youtube.com/embed/NXg70qJQ6O0?source=patrick.net

Psycological warfare. Long clip but really good.

One comment. I hate the scaring of women and children. I don't subscribe to the atom bomb. I have some reasons of my own some may not be able to relate to. Some more overt reasons. Rise of the 3 superpowers. Had Japan surrounded. No reason to decimate. Used only once. Rise of Japan. Port of Los Angeles that recieves tons and tons of Chinese goods. (Dosen't look like much of an adversary to me) Not to mention shipped all over the world. What outstrips that is the finished goods of industry taken in by Kasikstan. I look at it as a world pinned down by a farce. A vacant industrial town. Acciedents that happen in member nations. Always located near the water. I just don't buy it. The opposing countries always seem to weak in stopping U.S. agression. THE MAIN REASON. Member nations profiting by things such as the taking of Iraq. Lukov and France discovered the second largest oil reserves in the world in IRAQ during Iraq's sanctions. Then we went in. People are flaky if they don't think China with its supposed oil needs. Doesn't get in on this.. I guess if caught. These fuckers are sucking down and taking everyones labor. Sucking down and taking all of the World's resources they can get their hands on. Fuck them I'm not stupid.

Tude says

What exactly are the things that suck? Because personally, the only thing that sucks is the cost (for me) and there are ways to get around that.

What I don't understand is why are people always talking about the house one can get for the money somewhere else? What is the obsession of people with big, fancy houses? A house is a place to store your stuff, eat, sleep and shit. My life is lived outside of my house. And when I am home I prefer to spend as much time as possible in the yard, enjoying the beauty and weather. My 1000sf is cute, cozy and ecologically friendly. My utilities and maintenance costs next to nothing.

What sucks? I mentioned what bothered me in a previous post but I'll mention them again. Of course everyone's list is different. These are mine.

1: The cost of living. No brainer there. This states costs 4 and 5 times more than most others, and that goes beyond just housing.

2: Its crowded. Doesn't matter if you're at the grocery store, driving to work, or whanot. Want to go camping? Oh well, too bad because so does everyone else. Better make reservations well in advance. Want to attend that music/food festival? Better get there early cause' its gonna' fill up FAST.

3: The state government is pretty dysfunctional.

4: Pollution

5: Gentrification and obvious, clear signs of socio-economic disparity and class warfare. I grew up via modest means and the gross, flaunted displays of wealth I see around here is sort of disgusting in my opinion.

Secondly, did anyone mention anything about big fancy houses? Don't think so. I don't like "Big fancy houses" either. I didn't grow up in a big fancy house. Here's a comparison I enjoy making between here and elsewhere. My parents live about 20 minutes from a minor metro in the foothills of the Smoky Mountains, which is also a beautiful, picturesque part of the country. Its the most visited national park in the US. Anyway, they own a 40+ year old 2 story house on 14 acres of land with a large separate workshop. They also have an in-ground pool, a greenhouse, a creek in the back, 3 large vegetable gardens, an apple orchard, and its pushed back far from the road so you never hear the cars. Take a wild guess at how much their property is currently worth? $160,000. Neither pf my parents make tons of money. If you uprooted their property and moved it here it would cost millions.

On the other hand, "Cute charming houses" cost around $450,000-$500,000 in the Bay Area. About 3.5 times what my parents' property is worth. That and you 'might' get oh... about 1/4 acre with it? So as you can see the gross difference between these 2 properties is extreme in more ways than one.Its not just the fact that houses are more expensive in California, its that for what you get you don't get much at all and it isn't just about size or whether its fancy or not. Perhaps my perspective is different since I have lived in different areas. But one of the biggest issues I have against buying something in the Bay Area is this gross disparity in price and quality overall.

Tude said: "Seriously, I just don't get people needing big homes and material things to make them happy. What makes me happy is to live simply, in a place I love, surrounded by friends in a place of beauty with wonderful things to do wherever I turn."

As others have pointed out, I think it largely has to do with the weather. Most areas in the Midwest and Northeast have winters so cold that you will die outside due to exposure if not properly clothed. Then you get at least 2 to 3 months of oppressive humid, buggy, hot weather during the summer. Ditto for the excessive heat in the Southeast and Southwest. Which leaves people in these areas maybe 4-5 months a year of good "California weather"during the Spring and Fall.

So these people have to live inside their big castle homes for a good portion of the year just to survive the elements - hence people wanting to live in giant, comfortable homes.

The weather thing 'might' have something to do with it but as I recall growing up in the SE it wasn't like people were tripping all over themselves to move to Cali because they couldn't deal with the weather. In fact, whenever I go back I get an awful lot of ( usually kidding) remarks poking fun of California. Usually followed up with " How do people afford to live there?"

Besides- weather in the Bay Area is anything but stellar anyway. Its cold in the summer for cryin' out loud.

edvard2 - I am not suggesting that people are moving to California strictly for the weather, I am suggesting that people buy big McMansions in the colder/hotter environments because you can't spend that much time outside and spend more time indoors.

I could be wrong, but I think the average size home in California is quite a bit smaller than the rest of the country.

Also I think SE weather is quite a bit nicer than Midwest weather that has both extreme cold winters and extreme hot summers.

edvard2 says

1: The cost of living. No brainer there. This states costs 4 and 5 times more than most others, and that goes beyond just housing.

The SFBA cost of living adjustment index is 140-150%. So 40% -50% more expensive than par. Even compared against a place which has a 75% index, it is twice as expensive.

Cost of living is mostly the living situation anyway, once you fix that as many boomers and retirees have already done, then it is just as cheap as anywhere else in the country.

So let's say par cost of living is 3K. 150% puts it at $4,500 a month or 1,500 delta or 18K a year.

I agree, if you work in a field that is similar across the country like teacher, social worker, retail or service, it is too much to overcome. But for the rest, SFBA is one of the place with the best economic potential for professional/skilled employees in the entire world. .

Just listed. Realtor has got a deal for YOU.
Be a homeowner!
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FHA/VA insurance avalible
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Meet Realtor at property. OR ASK FOR A RIDE. We are here to help. Free sandwich and bag of chips to former customers.
Honest Jack's Rotunda of Real Estate
Our slogan: There are foreclosed on people living in city parks all over the country? Fuck we didn't know that. Don't let economic meltdown stop you from buying, trooper.

edvard2 says

Besides- weather in the Bay Area is anything but stellar anyway. Its cold in the summer for cryin' out loud.

That totally depends on where exactly you live. The "Bay Area" is a pretty big place with dozens of micro-climates.

socal2 says

edvard2 - I am not suggesting that people are moving to California strictly for the weather, I am suggesting that people buy big McMansions in the colder/hotter environments because you can't spend that much time outside and spend more time indoors.

I would disagree with the assessment that people buy Mcmansions in "Flyoverland" because they want to stay inside all the time. As someone who actually has family members in some of the areas that are being inundated with east and west coasters the primary reason people buy huge houses there is because they've come from parts of the country that are dramatically more expensive. Many had no hopes of buying in those places. When they move down they're like: "Wow-weee!, I can buy that HUGE house for $250k?! " And so they go hog wild. Its because they've spent years drudging away in some expensive hell-hole and likely have this huge, pent up demand for a house they can afford and when they move they can afford A LOT and thus go a bit overboard. The notion that they move and hide in their air conditioned houses is sort of silly. We never did that and neither did anyone else we knew. What we did do was head for the nearby lakes or rivers and went swimming, had picnics, or went camping. Either that or we mowed the huge lawn or spent tons of time gardening.

All I can say is that being a 'cheaper' area with no job, SUCKS! (As usual, with Real Estate, it's very simple.)

Relevant to this topic, depending on how much you're thinking of spending, and perhaps a good link for the homepage:

"Conforming loan limit changes push sales down for Bay Area high-end properties"
http://www.housingwire.com/2011/11/16/conforming-loan-limit-changes-push-sales-down-for-bay-area-high-end-properties

SFace says

I agree, if you work in a field that is similar across the country like teacher, social worker, retail or service, it is too much to overcome. But for the rest, SFBA is one of the place with the best economic potential for professional/skilled employees in the entire world. .

So how do you explain the SFBA companies employing more staff outside the State.

Thomas,

For affluent immigrants, it's only the coveted Fortress Communities along the coasts, particularly the Left Coast, and other frenzied urban areas in the world, particularly Asia Pacific region that are under consideration. Flyover Land is not really part of their world. So in that sense, s/he's right.

B.A.C.A.H. says

coveted Fortress Communities along the coasts,

Charlie dont surf!

edvard are you paying below-market rent for the place you live in now? I live in san francisco and am having the same dilemma as you do. but I have kids and would like to give them a home of our own to grow up and the rent that I pay is about the same as what we would pay in mortgage (accounting for tax benefits/mortgage interest deduction) if we bought a similar home in sf. so we're looking at houses and will probably buy by the end of next year.

yes I do think housing prices will continue to go down, but my logic is that we all have to live somewhere and what's it matter if I buy a $800k house that drops to $500k if I would be paying $4k per month the whole time to somebody anyway no matter if we rent or owned. we don't "lose" any money presuming we stay in the house and don't sell.

is that terrible logic?

My game plan is to rent and save over the next few years then to move to a cheaper state like Florida, Texas or Arizona and buy a nice home for half the cost of bay area. I can work as a traveling consulting engineer so that will allow me to be mobile and do this. Right now, I work a job in bay area that requires me to live here and I make a good income but not worth paying 600k-1.5 million for a crapbox that would buy me an estate outside of California. Plus taxes are less in Florida and Texas with no state income tax and I will be closer to my desired retirement place in the Caribbean.

fancy rental says

edvard are you paying below-market rent for the place you live in now? I live in san francisco and am having the same dilemma as you do. but I have kids and would like to give them a home of our own to grow up and the rent that I pay is about the same as what we would pay in mortgage (accounting for tax benefits/mortgage interest deduction) if we bought a similar home in sf. so we're looking at houses and will probably buy by the end of next year.

yes I do think housing prices will continue to go down, but my logic is that we all have to live somewhere and what's it matter if I buy a $800k house that drops to $500k if I would be paying $4k per month the whole time to somebody anyway no matter if we rent or owned. we don't "lose" any money presuming we stay in the house and don't sell.

is that terrible logic?

Yes IMHO you are using the word Own but you really mean " Loan owner." owners (those who own something that is not debt) pay 100 percent cash. Also as you are losing money on the price yearly. you are also not paying anything toward the house for nearly 5 years. You're tricking your mind into believing you really own something. when you will never actually own the house. The house and the company putting you into the loan actually owns you.

but what is the difference between throwing money out as rent or throwing it out toward a mortgage? at this point prices and interest rates have dropped so rent and mortgage payments are equivalent. after 30 years of throwing money out the window at least you have a house but in the rental case you don't have anything. when rents were 1/2 of mortgage it made no sense but now it seems to be starting to make sense.

I think buying in Bay Area right now is a risky move, because it ties up capital and saddles you with liability beyond the at-risk capital. If you were picking stocks, and someone told you that a particular stock might never provide a return, but also, it would not lose any value, and another stock might actually gain value but could also lose 100% of its value plus some more, which would you choose?

If you'd choose the 100% at risk stock, then buy a house in the Bay Area. If you chose the steady value stock, then rent.

Fantom says

I think buying in Bay Area right now is a risky move, because it ties up capital and saddles you with liability beyond the at-risk capital. If you were picking stocks, and someone told you that a particular stock might never provide a return, but also, it would not lose any value, and another stock might actually gain value but could also lose 100% of its value plus some more, which would you choose?

If you'd choose the 100% at risk stock, then buy a house in the Bay Area. If you chose the steady value stock, then rent.

A rather strange and inappropriate analogy.

Fantom says

I think buying in Bay Area right now is a risky move

You bet it is.

We're overdue for The Big One, and Loma Prieta 1989 was not The Big One.

If you're uncomfortable with living in Ground Zero for The Big One, it's more than about your property values and depreciation. It's about your life.

For the most part, wealthy foreigners who keep comin' here keeping property values high, are from other places on the Rim of The Ring of Fire. No difference to them.

But if you're from Flyover Land and are not comfortable with the Risky Business of Living here, don't.

I am closer to the fault line than yall and I don't sweat it. I had me a real nice house with my daughters in Carpinteria during the last one. Everyone always worrying about the big one even then. barely felt a tremor.