Buying in SF? Good neighbourhoods you’d recommend?

Airbnb LyUz58
May 21, 2018 25 Comments

New in SF here, making 300k-ish (pre-tax, not including equity) with my partner. We are in our mid/late 20s.

We are considering buying a condo or townhouse here given how crazy the market is. We have no plans to have kids in the next 3 years and both work in the city, so we want to buy something in the city.

What do people think about buying in the city? Any thoughts are welcome. What’s a good listing price range we should go for? Which neighbourhoods would you recommend? What’s your view on buying in SF in general?

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TOP 25 Comments
  • Okta pwWD54
    Inner sunset or cole valley. Range about 1.5m and expect 22500 parcel tax, 1200 insurance, and 3600 for hoa or maintenance per year. Remember there is no more SALT deduction and you will hit the mortgage interest cap early.

    Expect your value to drop over the next few years. SF is a premiere city so you will recover on a 7+ year hold. With prop 13, the longer you hold the better deal you get on parcel tax.

    Buy the largest unit you can and do any permitted improvements first to capture the prop 13 basis.

    As for schools, do your research. SF does assignments which may not be what you desire for your future children.

    Finally, avoid condos and TICs if you can. A SFR is a better value even with the trade off of living further out.
    May 22, 2018 6
    • Okta pwWD54
      TICs mean you are sharing a loan with other property owners. The down payment is also much higher, 30% or more and you pay a commercial rate.

      If you need to sell, or a TIC partner goes bankrupt, you won’t have as much financial isolation as compared to a condo. Contact Andy Sikrin if you do go this route.

      Finally, if you need to rent your unit, the previous tenant may have a right to return at the original rent, and any new renter will have rent control.
      May 22, 2018
    • Airbnb / Other Baiiii
      Hmm. I purchased a tic and it wasn’t quite like this. 20% down. Few lenders that offer them, which was a small hassle. Rate was pretty good though, but we have good credit.

      They refinanced the old loan when we bought the place so we are on separate mortgages. Functionally it feels the same as having a condo, but I understand that it can be complicated if there are more than 2 units.

      I don’t know as much about the renter rights and stuff. Either way- interesting! Thanks.
      May 22, 2018
    • Airbnb LyUz58
      OP
      Thanks for the thorough reply! Much appreciated and so refreshing to see a real reply. We are considering renting and waiting for the market to slowdown/drop. Your tax bill is based on your purchase price right? Or your appraisal price?
      May 22, 2018
    • Amazon / Eng KleinBottl
      Why avoid condos?
      May 22, 2018
    • Okta pwWD54
      Parcel tax is based on the assessed value when you close, not then purchase price. It could be higher or lower. It is all up to the assessors office.

      Condos have several drawbacks compared to a SFR. They don’t appreciate as fast, you are at the mercy of the HOA for changes, you can be assessed by your HOA for unexpected major maintenance events, if your HOA is sued then you can only sell to cash buyers, and HOA dues are not a tax deduction. If the HOA goes bankrupt because several units didn’t pay their dues, you get to pay their share.

      When I looked in 2009, I saw all these scenarios when I pulled the disclosures. Read everything.
      May 23, 2018
  • Facebook public
    It's great but going to be a real struggle at your budget or until your equity becomes liquid.
    May 21, 2018 2
    • Airbnb LyUz58
      OP
      Like...living in the city is great but it’s a struggle to buy a 1m place on 300k pre-tax income?
      May 21, 2018
    • Facebook public
      Yep 1m means south sf or maybe ocean beach. Redfin shows 34 homes for sale at or below 1m.
      May 21, 2018
  • VMware BobbleHat
    Wait for kids before buying. You’ll quickly realize you prefer to be teaching your baby about bunnies than how to avoid stepping in human shit. You will then run for the suburbs like everyone else.
    May 22, 2018 0
  • Airbnb #h
    With your income I’d hold on buying in SF. You will be shocked how little you can get. If you enjoy the city, rent a place you like and put $$ away to buy when the market slows. If you really want to buy, start looking for areas you might like outside of sf proper.
    May 22, 2018 0
  • Citrix Systems XDOa40
    Potrero Hill. Close to downtown, cal train and freeways. Quiet area. Very residential which can be good or bad.
    May 22, 2018 0
  • E*Trade joshua2010
    SF has a unified school district. It is basically lottery based. Your kids can go to any school in the city. The pick up and drop off can be tough if you live far from school though.
    May 22, 2018 0
  • Airbnb NidoQueen
    Salty plaza is kind of nice these days.
    May 21, 2018 0
  • Uber Jvor007
    Look south of Mission and keep going, if you hit Daly City you went too far.
    May 21, 2018 0
  • Amazon / Eng KleinBottl
    Lower nob hill dog patch
    May 21, 2018 1
    • Uber Gmie27
      +1 to dog patch
      May 21, 2018
  • Airbnb slackbot
    Can you afford 20% for a down payment? If not, then that’s easy: Rent.

    If so, then you might want to think with a longer timeframe than 3 years because you’re just paying interest in the beginning which would make it similar to renting. You’d also have to pay the same amount of selling fees if you do actually sell in such a short timeframe.

    Let’s say you want to future-proof the purchase a bit: buy a two bedroom condo, maybe rent/Airbnb out the second bedroom or use it as a guest room. Then, when a little one comes along, you can stay put for awhile. But, can you afford 20% for a down payment?
    May 22, 2018 0
  • Pinterest jenwang
    Civic center
    May 22, 2018 0
  • Google hioki
    You're going to need more money if you want to live in the nice areas
    May 22, 2018 0
  • Oracle karl_fog
    Every neighborhood has its own charm and suits different personality types. You sound like rich techie, probably Soma. If you are rich and white with old money then Noe valley. If you had even more money like you were a doctor or something, Pac heights !
    May 21, 2018 0
  • Microsoft h6@ca4#;
    Soma for 500 sq ft.
    May 21, 2018 0
  • Walmart / Product 🦈nado
    Mission Bay Dogpatch- plenty of inventory
    May 21, 2018 0
  • Uber Gmie27
    South Mission Bay is a good place to live.
    May 21, 2018 0