« prev   random   next »

2
0

Has anyone had the audacity to buy a Bay Area home in the past year?

By BayArea follow BayArea   2020 Jan 27, 10:55pm 872 views   17 comments   watch   nsfw   quote   share    


Please share the details and your thought process.
1   Blue   ignore (0)   2020 Jan 28, 1:43am     ↓ dislike (0)   quote   flag      

I know someone who bought few months back because of the pressure from the family and friends after a long long wait. Unfortunately, it went down I guess about 10%. They think, these dips don't matter for them in the long run.
2   BayArea   ignore (1)   2020 Jan 28, 6:40am     ↓ dislike (0)   quote   flag      

We have a young fellow that moved into the neighborhood in fall of 2018 which looks to have been market peak.

He works at FB and at the time set a new record for the neighborhood. Existing homeowners are in awe that home prices got that high.

He’s underwater now by around 5-10% from what I can see from today’s data.

I don’t believe there will be any crash but I tend to agree with @Patrick that home prices in the Bay Area will likely be flat for the next decade.
3   Patrick   ignore (1)   2020 Jan 28, 6:54am     ↓ dislike (0)   quote   flag      

Anyone who buys is instantly at least 6% underwater on the first day of ownership, because he cannot sell to a greater fool for a higher amount to cover the 6% commission extracted by the realtor mafia.
4   BayArea   ignore (1)   2020 Jan 28, 8:12am     ↓ dislike (0)   quote   flag      

Patrick says
Anyone who buys is instantly at least 6% underwater on the first day of ownership, because he cannot sell to a greater fool for a higher amount to cover the 6% commission extracted by the realtor mafia.


This is wrong.

Remember, you are again speaking in terms of home price. Most people buy for 20% or less down.

Therefore the 6% of the home price that they are down the day they buy the home is actually 30% or more of their downpayment.

So to correct your statement, they are down 30% of their investment the day they purchase the home.
5   CBOEtrader   ignore (6)   2020 Jan 28, 8:16am     ↓ dislike (0)   quote   flag      

I think people understand leverage dude.

Almost noone looks at their house downpayment as something they need back anytime in next 5 years. If they do, they're likely fucked.
6   BayArea   ignore (1)   2020 Jan 28, 8:19am     ↓ dislike (0)   quote   flag      

CBOEtrader says
I think people understand leverage dude.

Almost noone looks at their house downpayment as something they need back anytime in next 5 years. If they do, they're likely fucked.


Dude, if you buy a home in the Bay Area and need the money back in the next 5yrs, you’re likely fucked.
7   FuckCCP89   ignore (5)   2020 Jan 28, 8:26am     ↓ dislike (0)   quote   flag      

BayArea says
He works at FB....

He’s underwater now by around 5-10%


.... and he doesn't give a fuck. Because FB.
8   Ceffer   ignore (6)   2020 Jan 28, 9:00am     ↓ dislike (0)   quote   flag      

Patrick says
Anyone who buys is instantly at least 6% underwater on the first day of ownership, because he cannot sell to a greater fool for a higher amount to cover the 6% commission extracted by the realtor mafia.


From a mover up home to another, more like 10 percent because of all the loan costs etc. and moving expenses. If you buy a new house, add 2-3 percent for all the extra amenities and drapes/window coverings, landscaping etc. that you may not be able to recover.

I did the math once and I figured out selling a house and buying another, the new home has to appreciate roughly 10 percent at least to break even. If you move from a long distance and have those expenses, then adjust accordingly. Lots of front end and back end loads/ transaction costs/ bank gouges etc. etc. Never buy if you aren't going to stay in the home seven years minimum.

People who renovate extensively can lose even more. The best deals are homes that people who recently renovated need to move out from, because they seldom recover the renovation costs, which can be from 50K to 200K in California.
9   Eman   ignore (0)   2020 Jan 28, 9:18am     ↓ dislike (0)   quote   flag      

I don’t buy a home. I buy investment properties. My partner and I bought 22 units in 2018 (top of the market? 😱) Our bank said we can cash out $800k this summer. Not enticing enough so we’ll likely wait for a couple more years and cash out over $1.2M or thereabouts. All tax-free money.

Also bought a 5-unit bldg last year, 2019 and a flip in Oakland. Only time will tell how we’ll fare.

If someone comes to you today and say they’ll sell you their $1M shack for $700-$800k, do you say you will wait for a crash or the next downturn, or do you say give it to you NOW?
10   B.A.C.A.H.   ignore (0)   2020 Jan 28, 10:22am     ↓ dislike (0)   quote   flag      

The problem is not the down payment or whatever.

It's the Property Tax.

I used to go to Open Houses sometimes. Property Tax was not always on the ®ealtor's fact sheet. (And sometimes if it was on there, it was a lie). I'd ask them what the taxes are on the place, and they'd tell me 1%.

Bullsh*t. That's the base rate. All sorts of parcel taxes, junk fees, sewer this and mosquito abatement that, multiple school district bonds (you can live in three school districts!) etc., piled on. 1.2 to 1.4 % is more like it.

0.2 to 0.4% on top of 1% is Real Money the assessment created, by purchasing a modest $1M residence.

SALT or no SALT, or for landlording, charge the tenant super-high-unsustainable rent to cover if its a rental, whatever, it's a lot.

And unless Prop-13 is repealed, just about guaranteed to go up 2% per year forever. Unlike a mortgage, you cannot pay it off.

Party On, Hipsters.
11   clambo   ignore (5)   2020 Jan 28, 10:23am     ↓ dislike (0)   quote   flag      

While I was away in Florida for a few years a guy bought the house next door.
He pays about $17,000 per year in property taxes.
He will be on the hook forever to support the California welfare state, and he will owe taxes and commission if he sells.
There’s also the Obamacare tax of 3.8% on top of capital gains taxes, federal and state.
12   joshuatrio   ignore (0)   2020 Jan 28, 10:35am     ↓ dislike (0)   quote   flag      

I've considered buying a large boat and living on it to avoid property tax. Granted, you then have slip/marina fees - unless you live off the hook in a bay in which it's free.

Tempting.
13   Ceffer   ignore (6)   2020 Jan 28, 11:15am     ↓ dislike (0)   quote   flag      

joshuatrio says
I've considered buying a large boat and living on it to avoid property tax. Granted, you then have slip/marina fees - unless you live off the hook in a bay in which it's free.

Tempting.


I knew a guy who did that for years. He rented out his main home and then bought an auctioned DEA drug seizure boat for a fraction of new and lived on it with his wife. He evaded the revenoors from slip to slip around the bay for a while before settling down on a slip in Oakland. He went on sailing junkets from time to time. He seemed to have endless stories about the characters he lived around who occupied the boats.
14   Onvacation   ignore (6)   2020 Jan 28, 11:42am     ↓ dislike (0)   quote   flag      

joshuatrio says
I've considered buying a large boat and living on it to avoid property tax. Granted, you then have slip/marina fees - unless you live off the hook in a bay in which it's free.

Tempting.

The county you are docked in still charge property tax.
Luckily boats depreciate.
15   krc   ignore (0)   2020 Jan 28, 12:05pm     ↓ dislike (0)   quote   flag      

If you look at "global" real estate by city, I don't see SF even in the top 10. Shanghai, Singapore, London, Paris - all more expensive for total cost of living.
Question is if/when SF will be in the elite list of global cities which seem to be immune from any downward price push.

https://www.weforum.org/agenda/2019/03/the-worlds-most-expensive-places-to-own-a-home/

Discussions like this are where I miss IWOG.
16   EBGuy   ignore (1)   2020 Jan 28, 12:19pm     ↓ dislike (0)   quote   flag      

krc says

Discussions like this are where I miss IWOG.

I'm just hoping Ducky packed a gas mask and took some rations with him when he embarked for Santiago...
17   CBOEtrader   ignore (6)   2020 Jan 28, 12:19pm     ↓ dislike (0)   quote   flag      

krc says
If you look at "global" real estate by city, I don't see SF even in the top 10. Shanghai, Singapore, London, Paris - all more expensive for total cost of living.
Question is if/when SF will be in the elite list of global cities which seem to be immune from any downward price push.

https://www.weforum.org/agenda/2019/03/the-worlds-most-expensive-places-to-own-a-home/

Discussions like this are where I miss IWOG.


perhaps now is the time to entice chinese nationals to scoop up real estate deals in SF. Coronavirus could rally help w SF's homeless problem

about   best comments   contact   one year ago   suggestions