Moving to San Francisco. Help us settle our housing debate!

[Anonymous]

Anonymous wrote:I don't think you should plan on buying right away even if you decide that is what you want to do. It's very competitive and people pay all cash. Even for homes and markets that you would not think would be t
he case. Also be wary of the listings and sales you see on the Internet. We thought we had a good idea of pricing before we moved out here last year but things go for much more than listing prices and most places get multiple offers so prepare for the stress of bidding wars. You do that a few times and it takes a toll on you! Also we found some places online before coming out and we thought they were reasonable price (given the market) but it turns out they were TICs with crazy people.
We moved to a temporary furnished rental then a very expensive regular rental. Then we finally bought (moved 3 x in a year). We ended up paying double what we planned. And now I worry that we overpaid but the housing market is still strong so hopefully not but we won't know until we sell I guess.
However having said all of that. It is crazy the rent we were paying at a not so nice rental apartment and I'd rather be putting that money into a home.

Also agree with this. I'm the pp who said hard to buy under a million. Friend's neighbor in outer Richmond listed deliberately low at $900,000 this spring and sold for close to 1.5 million.

[Anonymous]

Check out Pacifico CA. YWIA

[Anonymous]

Whoops I mean Pacifica. Didn't mean to masculinize it

[Anonymous]

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

Sunset, near the zoo? Seems to be where younger people are getting decent deals these days.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Price is going up, rate will follow once Feds start raising interest rates soon.

Not sure I follow but I think I get your gist.

Once Fed raise interest rates (people believer it may happen before this CY is over), mortgage rates will go up as well.

Thanks, this is what I thought you meant. Appreciate it!

different PP here. I would like to add to this comment that as rates increase, your buying power decreases but prices will not. Sellers don't care what the rates are, they will list their house for what they think they can get and then some and buyers will continue to line up. If anything an increase in rates after such a very long period of historically low rates will cause an increase in demand for houses because people will start to panic. They will be afraid that if they don't buy now, the rates will continue to go up.
People have gotten way too comfortable with these rates, there has been no increase in rates in such a long time that people have taken it for granted that rates will always be low.

Anyhow OP, just buy now. Promise you won't regret it.

I agree with your conclusion but with different reasons. Bay Area real estate is driven by cash rich IPO tech people and cash rich Chinese millionaires. Only somewhat true in Oakland but very true in SF and the valley. Mortgage rates aren't as relevant as they would be in the midwest (ex chicago).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

Sunset, near the zoo? Seems to be where younger people are getting decent deals these days.

Serious question for op: have you ever lived somewhere that's overcast constantly? The sf neighborhoods that you could conceivably afford are really gray. San Francisco microclimates are an intense thing - some neighborhoods are always sunny (noe, mission, Castro for example) some (eg sunset) very rarely have blue sky. I would think long and hard about this before buying. I would be really depressed in the sunset. I would much sooner move to somewhere bart-covenient in Berkeley or oakland

[Anonymous]

If you were moving to any other area OP, I would tell you to rent awhile. But not in the Bay Area, in particular, SF. The longer you wait, the better the chance that you will be priced out--and rents out there is positively insane, you will not be able to save much renting vs. buying.

Our daughter attends college in the Bay Area, and we rented her a room in a safe Oakland neighborhood house for the summer break for a little over $2k per MONTH. For a ROOM. We are so relieved that she will be able to move back on campus in a few weeks.

Buy now. If you hate the neighborhood, you will be able to wait a few years, gain some equity, and move to a neighborhood you like better. You won't have any problems unloading your place, trust me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

Sunset, near the zoo? Seems to be where younger people are getting decent deals these days.

I don't know about that. My brother lives in the Sunset and bought his modest three bedroom home 14 mos ago for 1.2 mil

[Anonymous]

I would buy for all the reasons 9:02 and your DH suggest, at least if you intend to be there for at least 5+ years. In a lot of cities getting a better idea of neighborhoods is a good idea, but for as crazy as the housing market is in SF, just look at the rental market. Your rent for a comparable place will be much larger than your mortgage, with 1 bedroom apartments (and even some studios in trendy neighborhoods near transit) renting for 3K and all. People say one of these days the housing market is going to crash, but it keeps going up every year. I think it's unlikely to go down--it just might stop going up at the obscene rate it has been for the past couple decades. The combination of weather, access to natural beauty, the job market, and geography (you can't exactly build out into the sea) all lend itself towards always being a desirable place to be with limited supply.

Expect the housing search to be horrendous, and to have a nasty bidding war on each house, especially since you are in a competitive price range. You might get lucky, but you might decided buying in SF is not for you after several rounds of this craziness, and look at some of the suburbs (although the bidding war craziness is bad in desirable suburban areas as well). It will definitely go above the list price. Honestly, Berkeley/Oakland commuting via BART is just as convenient, if not more than many neighborhoods in SF for access to downtown and there are some great neighborhoods where you can get much more for 1 million. If you are your DH are in tech, seriously consider looking in the pennisula, since there is a lot of job hopping in that sector and it allows access to job centers in both SF and SV (I have some friends who work in tech who bought in Berkeley and have mixed feelings about it, because they love the community and hated the suburban feel of the pennisula, but it severely restricts their employment prospects if they want to not have a six hour commute daily).

Whether or not you can get anything to your standards for ~1 million really depends on your expectations. Houses are much smaller in the city in terms of square footage (as tends to be the case in all urban neighborhoods, for the most part), and you may need to settle for only 2 bedrooms/a neighborhood that isn't trendy/ a house that needs significant work. Good luck.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

Sunset, near the zoo? Seems to be where younger people are getting decent deals these days.

Ding, ding! You know SF! -OP

[Anonymous]

Thanks for all the thoughtful responses on this thread. We really do appreciate them all!

[Anonymous]

Anonymous wrote:Our family is moving to SF this month, and we've been put in temporary housing for three months. We've never owned, always happily rented. My husband wants to buy a house within that time span. I'd prefer to rent for a year to get the lay of the land, etc. Here are some of the broader points of our ongoing debate...

My Points

1. We're looking at a neighborhood in San Francisco that would be a long commute for DH. I figure we should try it out for a year before we commit.
2. Due to a family circumstance, we'll be able to put a lot more money down if we wait a year plus, we'll be saving on rent for those three months in temp housing.
3. In my gut, I just don't feel comfortable buying a nearly $1 million home until we feel sure we are in love with the neighborhood. Though I think I'm just a renter at heart.
4. I'm wondering how an increase in interest rates will impact the crazy housing market over there.

His Points

1. It would be great to save on expenses from moving by only doing it once.
2. Prices are only bound to go up in a year, up to 6%, so if we dig the neighborhood we should just go for it.
3. We may feel the squeeze for the first year but once the family circumstance rolls around, things will feel a lot better.
4. Why not get a low interest rate while we still can!

Anyone on this board btdt, and have a way to help one or the other of us see the light? Thanks for your insights!!

Point #1 - SF is a small city. Commute is not going to be ridiculously long as long as you are in the city itself.
Point #3 - I don't think you are going to go wrong with whatever neighborhood you decide to buy. SF is pretty much what you see is what you get. The issue might be space. Homes in the city tend to be on the smaller side so you will need to adjust to that more than anything.
Point #2 and 4 - The bubble is not going to burst. Home values have continued to increase in SF since the 90s-2000s. Lots of new money in the city so it's a seller's market.

Sorry but hubby makes good points.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

What neighborhood? Sunset or Richmond?

[Anonymous]

Anonymous wrote:

Anonymous wrote:$1 million dollars will not buy anything decent in Sf if you are looking in the city itself. Definitely rent.

It actually can in the neighborhood we're looking at though admittedly it's about as far from the downtown as you can get and still be in SF.

So ... Outer Sunset or Outer Richmond? I live downtown (rent) and actually hate going out there. It feels like the suburbs. Not much is walkable.

[Anonymous]

Anonymous wrote:Whoops I mean Pacifica. Didn't mean to masculinize it

I think she meant to say she does not want a commute. Coming from Pacifica is a commute.