House price decline

INPHI gain
Jul 12 718 Comments

Hey, we bought our house at exactly highest price more than a year ago at 1.3 Million$ and now the price went down to 150k below my purchase price... this is our first house and we work really hard to buy it. I am really sad and kind of depressed. Do you think the price will go up again in San Jose Bay area?
My plan was to stay in this house for 5 years and then sell and buy a better one. It seems un realistic now :(
TC 170k× 2

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TOP 718 Comments
  • Microsoft Queasy
    Housing is a long term game. Prices in the Bay Area will go up. Patience young grasshopper.
    Jul 12 12
    • Lyft done2
      Yeah, the middle class across all income spectrums are leaving in accelerating numbers. The population difference is made up by central American migrants. Good luck with that
      Jul 14
    • Qualcomm libertarin
      3 young engineers bought in the past 5 months. About the same rate as 8 years ago. Asians. Only unemployed are leaving
      Jul 14
    • Amazon :$sqG@^f
      Asians are the largest source of immigration to California in the last decade. More than half.
      Jul 14
    • in the long term, you get inflation.

      and there's plenty of QE to unwind the next 30 years.
      Jul 15
    • QE unwind means higher interest rates. Higher interest rates mean house price declines.
      Jul 16
  • Oath Atinlay2
    That’s the chance you take. You only bought a year ago, you shouldn’t even be thinking about selling yet.
    Jul 12 0
  • Samsung
    chajimogo

    Samsung

    BIO
    Stressed out but surviving
    chajimogomore
    I will bet the price will go down further but as long as the job market is still hot, not by much. I would say if you are betting on equity appreciation to buy your next house, it will ben more than 5 years.

    Just keep in mind though that the more exp house will likely also go up in value if your own goes up.
    Jul 12 12
    • Dude don't text and drive
      Jul 16
    • Google Mr. Glass
      Mr. dumbass said: “Maybe I am missing somthing fundamental here. If you want to upgrade in 5 years, dont you WANT the housing market to go down? If your house is 1M and target house is 2M for example: if housing prices go up by 20%, now your house is 200k more but your target house is now 400k more... so you lose money by upgrading when the market is hot...”

      Use logic and it’ll make sense. Here I’ll show you how. That 200k is your profit if you sell your $1mm home in 5 years. You’d have 200k from original equity + 200k profit + some more because you paid down the loan a bit over 5 years. The target home went up 400k but you need to cover only 20% of it = 80k. That $2m home is worth $2.4mm after 5 years but you need $480k to control it. You easily got $480k from selling your first home.

      This is why you stay poor. You don’t understand leverage. Leverage means if your home appreciates 5%, your returns are 5*5=25% per year at 20% down payment and 5x leverage. Your dream home meanwhile is still appreciating at 5%. 25 versus 5. Doesn’t take a genius to realize you’ll catch up at some point. 👍
      Jul 17
    • Zillow Group AL2453z
      You forgot the cost of sale ~6% plus the costs of buying. Those together will probably end up being slightly lower than the original $200k, not $80k.

      You do upgrade, but you have to have the funds to make essentially another repeat of your initial investment into a more illiquid property. A property that is a substantially higher risk.
      Jul 17
    • Amazon / Eng KHCr70
      Lol ok Mr Bitters
      Jul 17
    • Amazon / Eng
      eisenhower

      Amazon Eng

      PRE
      Google
      eisenhowermore
      KHC you forgot leverage. In your first mortgage years, you want your house price to go up. Suppose you put 20% down in a 1million house. If it goes up 20%, you can sell it, and you'll have 400k in your pocket (200k you put down + 200k growth). Then you need to get more 80k to buy the former 2mi house.

      Now, supposes the market goes 10% down. If you sell, you get only $100k in your pocket. You need $260k more to put down on the former 2mi house.
      Jul 19
  • Microsoft Hyad70
    It largely depends on economic cycles, which you cannot predict with any greater accuracy than the stock market. However, if you want a robust economy that favors housing appreciation, vote for Trump in 2020.
    Jul 14 29
    • LinkedIn billz
      It has the power to create currency; it does not own the creation of wealth. Each of those is a synonym for distinct definitions of the word 'money'.

      Clearly my statement about the government spending money it does not have is using the definition of 'money' that is synonymous with wealth. The government is promising wealth to people and companies that it does not have to give.

      Your response taking the word out of context to reference the Fed's power to create currency is what's obtuse.
      Jul 17
    • Twitch 1life
      As a person that usually votes republican for presidents, there is no trade-off or positive thing in the world that is worth Trump. If people can not see he is a Hitler reincarnate, then there is no hope left on this world.

      When Germans look back on their history, their dictator is their biggest shame. Do not let Trump be ours anymore then he already has been.
      Jul 19
    • LinkedIn billz
      People who call Trump "Hitler reincarnate" are incredibly insulting to Jews and Hitler's other victims.

      You can make any prediction you want. But no actions on Trump's part come close. It's so far off that the comparison is itself shameful.
      Jul 19
    • Twitch 1life
      I disagree, Hitler was not just a racist - he was a dictator with extreme views that inspired many people to follow him on many things that people should know is wrong. Whether it’s Jew, black, Mexican, women, mentally ill, fat - there is no place in our world for these type of any of these views and behavior - and he exhibits many of these in his Twitter pretty much everyday. From Social Darwinism to Ethnocentrism mixed with misogyny and racism, it is all on the same path of hate. If he is not Hitler incarnate, he is certainly inspiring others to be.

      While I agree with some of his political choices to some extent, my point is he is too extreme and it’s not worth any tradeoff. Trump is setting up the same path of hate dictatorship just like Hitler...so learn from the past and don’t let the same mistake happen again. Supporting him is what is shameful.
      Jul 19
    • LinkedIn billz
      Hitler's views and opinions did not kill anyone.

      He literally ordered the army, of which he was commander, to round up and murder millions of people.

      "Trump's views and tweets are too extreme" does not in any way defend your despicable claim that he is "Hitler incarnate". Hitler *literally murdered millions of people* just like Stalin, Mao, Lenin, Pol Pot...

      I am 100% against Trump. But I'm even more against outright lies that diminish the evil of murderous dictators by comparing them to annoyingly mean elected officials.
      Jul 20
  • Autodesk / Product
    Ymjm83

    Autodesk Product

    PRE
    Workday, IDEO
    Ymjm83more
    1.3M while making 170k?? How are you affording the monthly payment?
    Jul 12 2
    • INPHI gain
      OP
      Dual income, should have said our house
      Jul 12
    • Intuit s2hc4r
      Sounds like the household has a TC of 340k
      Jul 12
  • Credit Karma ceasar
    Sucks to be you for buying a house for 1.3 million why not move to Texas or something and buy a house there. People are so stupid now a days. Did you buy a house just because your friends were buying houses too 😂
    Jul 12 13
    • Coinbase / Biz Dev
      montel

      Coinbase Biz Dev

      PRE
      Coinbase
      montelmore
      Calculations of net worth for purposes of determining accredited investor status exclude the house you own as your primary residence. That should tell you something.
      Jul 14
    • Intel oXaW30
      Yeah but the idea is you don’t live in your stocks, stocks only purpose is to buy and sell. If you sell your primary house, you have to buy another..
      Jul 14
    • Bloomberg cg_ny
      Yup, home price appreciation is worthless unless you move to a low-cost area or go back to renting, or downsize significantly. It just means higher taxes.
      Jul 14
    • LinkedIn ex-fb
      Calculations that live out primary residence are flawed in that a renter could be perceived as richer than someone who’s house is worth a few million.
      If he has to, the latter can rent or move to a low COL area and have a few million cash, while the former cannot.
      Jul 14
    • Microsoft / Other
      MrningStar

      Microsoft Other

      BIO
      Experienced. Degreeless. Polished. Ambitious. Black.
      MrningStarmore
      We're planning to purchase another home in 2yrs and rent our current one. Our mortgage + HOA is just under $1300 and similar properties in the area are already renting for as much as $1800. Will likely refinance to see if we can get the mortgage+hoa total down to $1100 or so before we look to purchase again, plus do some upgrades to increase rental value. Also gonna spend the next two years functionally living off of my income alone & banking the spouse's; hoping we can put down 1/4 to 1/3 of the total purchase price on the next house.

      Charlotte's market is booming so much that homes in areas of growth are basically opportunities to tack on substantial equity in a very short period.
      Jul 15
  • Apple Xxgty
    Unfortunately I purchased a home two years ago so that means we will all lose value. I am very good at buying high and selling low. Ever heard of ethereum? Bought my first coin at 900. Ever heard of bitcoin? Bought at 15,000. Ever heard of GT Advanced Technology? Bought it two weeks before they went under.

    You’re welcome!
    Jul 14 8
    • Apple Xxgty
      Hahahahaha
      Jul 14
    • eBay diudy
      I dis the same thing with crypto and realized my stars are not aligned and decided to hold on buying house for last 1 2 years. Have about 350k invested in stocks, crypto and savings will buy cash down or pay 50% down and buy when market is down about 20 down
      Jul 14
    • Bloomberg / Eng
      leapfrog

      Bloomberg Eng

      PRE
      CA Technologies, Bloomberg LP
      leapfrogmore
      +1 buying high and selling low is my strongest skill. Don't do what I do, do the opposite.
      Jul 14
    • Amazon / Eng n0v
      Most people only share the winners. You'll hear if a friend wins in Vegas, you don't hear of many losing.
      Jul 14
    • Morgan Stanley lhoh00
      You're no different than most of the world. The tiny portion of those people who earn pretty well are ones who do research well and has influence to make a change around through a political or other influential connection
      Jul 14
  • Netflix petrolium
    If you bought a house for 1.3 m with 340k you better tell me you had 600k down payment
    Jul 14 24
    • Cisco not-stacy
      Okay old man - I will wait for you to answer why it’s stupid to pay 5k out of their 18k+ monthly for a place they can call home and make memories in...
      Jul 14
    • Netflix petrolium
      I dunno why, I think it’s a good idea lol I actually would advice that lolz
      Jul 14
    • Cisco not-stacy
      Lol you say it’s a stupid idea, but then don’t know why it’s stupid?? Why even contribute to the post??
      Jul 14
    • Cisco not-stacy
      Lol yeah agreed just don’t think this rando should be sharing terrible advice especially if he can’t back it up
      Jul 14
  • Google DimH27
    I am in the market and preparing a bid for a home. TC $250k. I refuse to buy a single family home more than $500k. If I can't afford my mortgage like it was an apartment rent. I won't do it.
    Jul 14 16
    • Amazon SomeName2
      Bothell is quite nice and has added a lot of retail in the last few years. Commute will not be great but 🤷‍♂️
      Jul 14
    • Amazon zyyv21
      Bothell is great , but You wouldn’t find a nice one around 500K. Lynnwood is a better choice (better commute , lower prices) if you don’t have school going kids.
      Jul 14
    • Google ueuw62
      Bothell and Lynnwood are both dumps, in addition to the soul crushing commutes.
      Jul 14
    • Microsoft
      hitmonchan

      Microsoft

      PRE
      Microsoft
      hitmonchanmore
      Mr Google, spend a little more to get a better commute, also contractors are expensive so better to find a place as move in ready as possible. If you value your time that is...
      Jul 16
    • Google ueuw62
      A little more? I wish. Going from Bothell to Bellevue is nearly double in price.
      Jul 16
  • Amazon LlFO08
    You deserve to go broke by making such dumb purchase decisions.
    Jul 14 1
    • Snapchat uOkV57
      You deserve to be stuck at Amazon forever by being such a dick.
      Jul 14
  • Yahoo / Design getAway
    Depends on the area. Did you buy in a non schooling area?
    Jul 12 9
    • Yahoo / Design getAway
      San jose. Most likely Ruskin or berryassa
      Jul 13
    • Google Nzws53
      Piedmont hill high at 9 is actually a joke
      Jul 14
    • Yahoo / Mgmt ultimate
      Why do you say so?
      Jul 14
    • Apple realTimCok
      What? Why high school doesn’t matter much? You may be able to choose private primary or middle school, but for high school you don’t have many options unless your kid can get into Harker and you are going to pay for it. Otherwise the most valuable part of the house is going to be high school! Aka, MSJ, Monta Vista, Lynbrook, PA High, Gunn, Saratoga High, these schools literally means house value.
      Jul 15
    • Yahoo / Mgmt ultimate
      Number of people looking for high schools vs people looking for elementary + dinks looking for good schooling areas,. Compare that and tell me. Also, high school have a broader geographic boundary.
      Jul 15
  • Cisco not-stacy
    Just don’t understand clowns like OP... “sell it for profit to buy a better house”...

    You do know that if your house value goes up, so will all other houses, and the ‘better’ house will actually cost even more right?? Total dweeb
    Jul 14 10
    • Intel gifkapa
      Like I said, good luck trying to forecast your house value vs the market on a 5-10 years basis. Agreed you can control it with the condition of the house, but the house condition is relatively marginal differential vs the market and home improvements are $.70 back on the dollar. It is drastically outweighed by the negative that a house is highly illiquid compares to a stock.
      Jul 14
    • Castlight Health whaaaaaat
      What I mean is that you can pick a house that has a higher likelihood of out performing the market easier than you can a stock. Then if the market rises you should do better than the market. I do not mean that the housing market is more likely to perform well vs the stock market.
      Jul 14
    • Intel gifkapa
      I’m saying that there is no reason to think you are correct. Housing is a relatively efficient market when it comes to one house vs another, just like stocks.
      Jul 14
    • Castlight Health whaaaaaat
      500% return on cash over the past nine years. What about you for stocks?
      Jul 14
    • Intel gifkapa
      About 400% with less risk.
      Jul 15
  • Netflix petrolium
    Your house is not an investment,
    People should learn at least THAT!
    Jul 14 25
    • Adobe Pnqj67
      Ew. Both of you suck.
      Jul 17
    • Cisco not-stacy
      ?? Why you here? And Netflix I know you’re getting these notifications - hows the after hours taste down 11%?? What you gonna wake up to tmrw - could it be -15%!?
      Jul 17
    • Netflix petepants
      Hey dummy! sorry it’s been a while.
      Feels great, I get more options and I can buy stock at the low price. We expected this for 2months at least.
      My pay is not tight to the stock price but 5% on top of my salary is, so I am getting a great bonus this quarter!

      How is your comp at Cisco? Willing to share?
      Jul 17
    • LinkedIn ex-fb
      Why not both of you Cisco and NFLx post a snapshot of their W2?
      Jul 17
    • Netflix petepants
      I have no problem Sharing my tc, but I don’t measure dick sizes, especially when I know my is bigger.
      It’s the arguments that matter. He wanted to insult and said something stupid. Again.
      Jul 17
  • Twitter 😼.,
    The entire Bay Area market is heading down. It’s finally happening. Even Palo Alto prices are lower now than they were last year this time.
    Jul 12 9
    • Walmart.com / Ops kaleen_b
      The correction will be delayed...
      Jul 12
    • Yahoo / Design getAway
      Nope. Not with hr1044 getting passed.
      Jul 12
    • Walmart.com / Ops kaleen_b
      HR1044 only passed the House of Rep and doesn't have enough co-sponsors to make it thru the Senate and then President will sign. It's a long shot because a similar Senate bill S386 still doesn't have all the co sponsors needed for majority. I would love to see this happen but chances look a little bleak...
      Jul 13
    • Splunk / Eng ImaRainbow
      Noe Valley In SF is still going up.
      Jul 15
  • Facebook / Eng
    madhuridix

    Facebook Eng

    PRE
    Facebook
    madhuridixmore
    House prices always go up. Willing to bet all my money. I've bought 3 houses in the last couple of years, all using 0% down. Just waiting for recession hoping interest rates will fall.
    Jul 14 23
    • Samsung vtPX83
      I think you'll see more HQ2 type situations going forward as a way to keep costs in check. The Amazon experiment is being watched closely by other tech companies.
      Jul 14
    • New kdogg
      @vtpx83 i agree with you. I'm in real estate myself and I probably won't buy during this cycle. Land valuations don't make sense, we are at the top of the market, construction costs are crazy high. There must be a correction in the near future because it just can't be sustainable. When it finally happens I'll enter the market.
      Jul 14
    • Samsung vtPX83
      @Kdogg - I've been in the market for the past two years, but haven't been able to wrap my head around real estate value (different than price) in Bay. Hopefully this dynamic changes soon. Good luck!
      Jul 14
    • New fkMd41
      @madhuridix -- This is great I lol'd a few times. How are all you guys so highly paid and not seeing he is trolling my god.
      Jul 16
    • Samsung vtPX83
      Do people still LOL?.
      Jul 16
  • Amazon / Eng
    lifeisbear

    Amazon Eng

    PRE
    Cisco
    lifeisbearmore
    Does the price really matter if your plan is moving to the better one after 5 years? It's not only your house that lost it's value.

    Isn't it actually better for you if you target moving to 20% more expenasive house in 5 years as the additional loan/cash needed for filling the gap will decrease.
    Jul 12 7
    • Amazon / Eng
      lifeisbear

      Amazon Eng

      PRE
      Cisco
      lifeisbearmore
      But then the "better" house could be like 200k cheaper. 😂 In terms of investment it is horrible loss, but if it is purely a place to live, the price down wouldnt damage your next move too much.
      Jul 12
    • Microsoft Specific
      You will be happier the moment you stop thinking of your house as an investment. You're not going to get any significant gains out of it, consider yourself lucky if you break even. Also, the flip schedule you're talking about (5 years) is basically impossible and unrealistic.
      Jul 14
    • Lyft done2
      It certainly was an investment if you wanted to get out in five years. You would’ve been better off renting Something Baller
      Jul 14
    • NetApp cdRH03
      MSFT I sold at the peak, exactly 1 yr ago May which was 5.3 yrs after I purchased and I basically doubled my money (bought at $390k sold at $790k). A few variables in this equation were that it was East Bay, which hadn't blown up like S Bay yet, the market had just started to recover from the last bubble burst and though this wont be an overnight burst, it will take a good 3-7yrs to bottom out BUT it will come back full circle after that. It will prob just take more time to come back. The problem aside from that it doesn't fit your 5 yr timeline is that everything else around you will go up when your house rebounds, so you will be buying at the peak again.
      Jul 14
    • Microsoft Specific
      The thing is, that's sort of story is the exception, not the rule. You basically got super lucky, and it's not a reliable way to make money. Houses are not reliable investment vehicles, and you're going to be giving yourself extreme cases of depression until you put that idea behind you.
      Jul 14
  • Intuit s2hc4r
    At least you have a house
    Jul 12 0
  • Amazon annoeuuxud
    Cut your losses while you can . Rule of thumb sell at ten percent loss to save yourself a 40 percent loss later on . Move to Arizona we have amazon here you would be kings .
    Jul 14 3
    • Intel oXaW30
      Lol this is the worst financial advice I’ve ever heard, I hope you’re being facetious.
      Jul 14
    • Expedia / IT wAoU28
      Sounds like you have been taking financial advice from Trump. Poor you
      Jul 14
    • Oracle / Eng elondust
      Way to buy high sell low
      Jul 14
  • Workday XSDV31
    California is past it’s prime. The original hippie culture that gave the state it’s flair has fled to the Pacific North West or Colorado. The middle class that kept property values stable or increasing has fled to Arizona and Texas. The city and state governments are filled with bureaucratic nonsense, they can’t even run BART.

    If your goal is to have a sterile existence in tract housing then by all means go for it. California is sustained on the momentum from the tech companies, which are putting their foot out the door with other locations across the US.

    The weather and geography are nice though!
    Jul 14 1
    • Amazon pjthegame
      and the new 'middle class' has replaced them. that's how it works! yes, people are moving out of California, but their is a new displacing middle class
      Jul 14
  • Bay Area folks spend all their young life in shitty homes working hard with stressful life paying millions. Bay Area folks work hard for retirement life. I don’t get it. Did we born to enjoy at retirement? There is life beyond Bay Area. You buy home then always worry about your home prices and market fluctuations.
    Jul 14 1

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