Should we buy now?

[bobby]

I have been on this site for a few years now. If I may seek the collective wisdom of this site.
a little background

1. Two income family. No kids. Tired of renting a small place while saving money to buy house (renter for the past 9 years since started working). We saved up about 20-25% of desirable price range. Got approval letter from bank based on income/down payment. Job is fairly stable.
2. We live in Norcal – specifically Peninsula area – home of the big tech companies. Within 20 miles of here are Apple, Google, Ebay, Facebook, Oracle, Intel, HP, Yahoo, Cisco, Microsoft (yes, they have a big presence here), and a gaggle of others. In someway, there doesn’t seem to be a recession for the past 4 years. Housing price had been remarkably stable – but had gone down (about 10-20% from peak/depending on area).
3. Home buying season is upon us. We have been going to open houses and see people in droves.
4. Houses prices seem quite high still ($450-600/sq ft) but there seem to be property changing hand at such crazy price.
5. Facebook is going IPO and (I quote) about to make 1000 new millionaires. Facebook is 5 miles from here. Many of those folks will likely be buying here.

Should we (from here on direction of price is speculation – not fact like above)
1. jump in now before the IPO money flood the area and drives up price to even crazier level.
2. wait till fall season to buy (by then will have saved up a little more) and maybe the craziness will subside (big if)
3. wait till next year and hope that for some crazy reason, price will go down more (big if) but could also go up. Wise man said, don’t time market.
thanks in advance.

PS. not sure if need to provide more detail but will provide if asked.

[svelte]

Most of us here are not experts on the bay area, but flu may be able to help.

another key piece of information: how long do you plan on owning the place you buy?

[Coronita]

What city do you plan on buying in… I’m sorry, but Mountain View and Palo Alto are going to be even more so going through the roof…

I guess you are looking on the Peninsula on not on East Bay, right? Good choice imho…

How far down are you wanting to go. How about Sunnyvale, Santa Clara.. Although homes down there are not cheap, they are slightly (and I say slightly) less.

[bearishgurl]

What is your price range? This will dictate whether you will be able to buy an SFR in Santa Clara County in the abovementioned areas or Milpitas/Campbell/SJ.

Obviously, SFR’s in some areas in both San Mateo County (as flu mentioned) and SC County will likely be out of your reach. Have you considered looking at major fixers (even structural) in out-of-way places such as Pacifica or Half Moon Bay area (not fwy close)?

What is your level of home-improvement expertise?

I personally don’t think prices will “crash” in SV as there will never be any more land and the vast open space on the peninsula will never be developed (yes, I said, “never”). There are a few (VERY few) distressed properties still on the market but would imagine they are snapped up quickly after being listed.

I also noticed SFR’s in one of my choice retirement areas, Saratoga, has nearly DOUBLED in price in the last two years, condition be damned. Obviously, being one of the last downzoned bastions of mid-century ranches on large lots, buyers have recently realized this. Campbell is my second choice but is currently soaring in value.

Except for some parts of SJ and below, the condo/townhome market appears to me to be infinitely easier to get into for the borrower who doesn’t have $300K+ to put down.

As a soon-to-be-“retiree,” I’m probably priced out of SV forever as a single buyer for what I want so have now begun to study the “Lamorinda” area (CC Co) and Montclair/Piedmont (Oakland). But I won’t have a SV job to commute to, like you do :=}

I regret not being able to buy a property in SM/SC Counties in the last 1-2 years and lease it until I am ready to occupy it.

[outtamojo]

That area is crazy – maybe new construction will be less of a hassle. They are building like crazy in Dublin, which as you already know, has a BART station. 2 of my brothers bought there – and yes, the tech demographic is out there in full force in case you are wondering about schools.

[bearishgurl]

[quote=bobby]Should we (from here on direction of price is speculation – not fact like above)
1. jump in now before the IPO money flood the area and drives up price to even crazier level.
2. wait till fall season to buy (by then will have saved up a little more) and maybe the craziness will subside (big if)
3. wait till next year and hope that for some crazy reason, price will go down more (big if) but could also go up. Wise man said, don’t time market.
thanks in advance.[/quote]

bobby, I think “wise man” was right. I am usually more bearish when it comes to RE but in your case, I would say to buy what you can afford and will accept as soon as you possibly can.

Stay realistically sober and do NOT, under any circumstances, get caught up in size and age of home. Lot and location of that lot are key here. Hire a structural engineer during escrow, if necessary, to inspect a property if you have any concerns about structural defects and no recent engineering report is offered to you by the seller.

For maximum future appreciation, if at all possible, buy a single-family home on a 6500+ sf lot (to make it easier to expand it later, if necessary).

Don’t worry too much about school attendance areas (if you’re planning on a future family). In SC County, there are elementary schools, in particular, which have lottery admission or open enrollment offered to a wide area. In SV, public schools generally have a higher API than their east-bay, SJ, or SoCal counterparts.

Good luck! Here is a good informational link I posted for another Pigg last week:

http://sanjoserealestatelosgatoshomes.com/

[Coronita]

My advice is in the bay area, and if you’re only interested in the peninsula you want to buy as soon as you can… Because there is a land shortage in the bay area, and it’s only going to get worse.

[bobby]

… a little break at work…

thanks to everyone for taking the time to contribute.

to answer questions.
1. planning to buy in Belmont, San Carlos, and possibly only North Redwood City. I bike to work and don’t want to live too far. I know that East Bay will double my purchasing power but this is not an option. We accept that Peninsula will give less house for money but we like living close to work.

2. Price range is $800K-1000K. Fixer upper is undesirable as we are nitwits when it comes to that. As mentioned above, no HMB or pacifica – hate driving/traffic. We can wait since we are not bound by school year requirements (no kids) but we don’t want to wait only to find out that prices have gone up 20%.
agreed that the vast open lands will NEVER be developed. NIMBY is strong here, esp among the Woodside super weathy folks.
Any open house we went to was swamped with middle aged folks with children in tow. This makes me think buying frenzy is about to begin.
Better to wait but then local news about all these wealthy Facebook employees makes me want to bite the bullet and buy.

[bearishgurl]

[quote=outtamojo]That area is crazy – maybe new construction will be less of a hassle. They are building like crazy in Dublin, which as you already know, has a BART station. 2 of my brothers bought there – and yes, the tech demographic is out there in full force in case you are wondering about schools.[/quote]

LOL, the “Tri-Valley” area is where I’m from. At the time we moved away, there was a population of 16K in Dublin, Pleasanton and San Ramon combined!

Now it is a suburban megalopolis, rife with tracts encumbered with HOA and MR!

This “tech demographic” you speak of – are they working in SV? If so, and they are riding the BART, are they then transferring to SAMTRANS and/or CalTrain every day back and forth? How long does this take them one way?

I would surmise that Dublin to Cupertino one way by car (for an 8:30 a.m. arrival time) would currently take 65-75 minutes (barring any accidents and using the Dumbarton Bridge).

You pay for what you get in this life, PLUS the added costs of HOA/MR (if you choose to commute from newer construction). Public schools are just as good or better in SV as they are in Dublin/San Ramon area.

At the time we lived there, my dad worked in Oakland and my mom worked locally. And as you may know, the majority of Oakland was a burnt out mess of racial tension in the early/mid sixties with frequent riots and law enforcement’s liberal use of teargas almost every day.

It is night and day from that now.

We could not afford anywhere in Contra Costa Co except Concord, which was a low-income sh!thole at the time (MUCH better now, btw).

The 2-4 lane hwys weren’t nearly as crowded then as they are now and there were no interstate spurs in place.

I would NOT advise buying in eastern Alameda County today if one or both buyers works in SV.

FWIW, the last time I stopped off in Dublin was October 2011 and the last time I stayed in SV was in May 2011.

[Coronita]

[quote=bobby]… a little break at work…

thanks to everyone for taking the time to contribute.

to answer questions.
1. planning to buy in Belmont, San Carlos, and possibly only North Redwood City. I bike to work and don’t want to live too far. I know that East Bay will double my purchasing power but this is not an option. We accept that Peninsula will give less house for money but we like living close to work.

2. Price range is $800K-1000K. Fixer upper is undesirable as we are nitwits when it comes to that. As mentioned above, no HMB or pacifica – hate driving/traffic. We can wait since we are not bound by school year requirements (no kids) but we don’t want to wait only to find out that prices have gone up 20%.
agreed that the vast open lands will NEVER be developed. NIMBY is strong here, esp among the Woodside super weathy folks.
Any open house we went to was swamped with middle aged folks with children in tow. This makes me think buying frenzy is about to begin.
Better to wait but then local news about all these wealthy Facebook employees makes me want to bite the bullet and buy.[/quote]

How about Foster City… It’s much nicer imho….
Might have to reduce the home size though, because prices have shot through the roof…

Your price range, you would live comfortably in Sunnyvale, but it’s probably too far down south for you.

And yes, bite the bullet and buy. 3/2 townhome in foster city use to be around $330k when I was looking back in 1998… I walked over a $10k spat I had with the seller… Big mistake. Huge!

[an]

[quote=flu]Big mistake. Huge![/quote]
Are you pretty woman? 😀

[Coronita]

[quote=AN][quote=flu]Big mistake. Huge![/quote]
Are you pretty woman? :-D[/quote]

You volunteering to allow me to use your credit cards? 🙂

[bearishgurl]

[quote=bobby]… a little break at work…

thanks to everyone for taking the time to contribute.

to answer questions.
1. planning to buy in Belmont, San Carlos, and possibly only North Redwood City. I bike to work and don’t want to live too far. I know that East Bay will double my purchasing power but this is not an option. We accept that Peninsula will give less house for money but we like living close to work.

2. Price range is $800K-1000K. Fixer upper is undesirable as we are nitwits when it comes to that. As mentioned above, no HMB or pacifica – hate driving/traffic. We can wait since we are not bound by school year requirements (no kids) but we don’t want to wait only to find out that prices have gone up 20%.
agreed that the vast open lands will NEVER be developed. NIMBY is strong here, esp among the Woodside super weathy folks.
Any open house we went to was swamped with middle aged folks with children in tow. This makes me think buying frenzy is about to begin.
Better to wait but then local news about all these wealthy Facebook employees makes me want to bite the bullet and buy.[/quote]

Bobby, you are among the very fortunate to be working in SM Co and being able to bike to work. IMO, your area of choice has a VERY high quality of life! My previous advice still applies here, with a couple of changes. Based upon your given price range, you will have more choices above a small 3/1 or 3/2. If you are not handy, buy only on a flat lot (w/o slopes to tend properly and deck footers/retaining walls to worry about).

Don’t worry about the “competition” or what time of year it is. Just continue looking until you find something that will fit your needs within biking distance and then do not waste time in making an offer.

It’s all good :=]

[bobby]

Thanks again. We are leery about getting into a bidding war against another buyer but I guess it doesn’t hurt to look. We’ll keep on looking.

[bobby]

duplicate post.. how to delete?

[Author]

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