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

[Anonymous]

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!!

[Anonymous]

Having been through a very similar relocation twice, one of them being San Francisco, I can tell you that your DH is 100% spot on, correct. His line of thinking is very sound and backed by solid facts.

1) with the company paying your closing costs and moving expenses to your "final residence" - that is a HUGE HUGE savings. literally thousands of dollars

2) Prices are going north, fast. no end in sight to leaps in home prices even in the far out suburbs. Yes, eventually they will stabilize but not any time soon.

3) one year flies by fast, so even if you feel a little financially squeezed at first you will get used to your "new normal" pretty quickly

4) Interest rates are sort of stable for the time being, but will be headed up soon. if not September, then sometime 2016 at which point you will be totally priced out so it won't matter.

If you do your research, and have a really good agent - you will find the neighborhood and house that works for your whole family. And if you end up not liking it, you can very easily sell it....with multiple offers.

[Anonymous]

Thanks PP! That was overwhelmingly pro-DH but I appreciate it and see all your points. Very helpful! Thanks again.

[Anonymous]

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

[Anonymous]

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

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

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!

[Anonymous]

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.

[Anonymous]

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.

The fed chair already said it will happen this year,
Ike
Y at the next fed meeting in September.

[Anonymous]

ooh I would be nervous buying without being sure I loved the neighborhood. We rented in a new city for a year before buying and I still find neighborhoods I didn't know about or wonder if we would be happier in a different area...

[Anonymous]

Anonymous wrote:ooh I would be nervous buying without being sure I loved the neighborhood. We rented in a new city for a year before buying and I still find neighborhoods I didn't know about or wonder if we would be happier in a different area...

Okay, so score 1 for me but seems overwhelming pro DH right now! Thanks PP for at least one point on the board

[Anonymous]

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.

[Anonymous]

Anonymous wrote:ooh I would be nervous buying without being sure I loved the neighborhood. We rented in a new city for a year before buying and I still find neighborhoods I didn't know about or wonder if we would be happier in a different area...

I agree with this especially in a vet expensive market like sf.