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
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.
Right, it’s only useful tbh if you’re leaving the local area. This is one of the reasons many financial advisors do not like to consider a primary residence an asset. You should look at a house as shelter only and not an investment. You’ve given yourself permanent access to a great job market with fixed shelter expenses; you got a mortgage because you felt you could afford the repayments over your 15-30 year term.
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... No?
Home price appreciation in Bay Area is mostly because of Tech companies with strong financials. Pray for Tech companies to be even more strong after 5 years.
That’s the chance you take. You only bought a year ago, you shouldn’t even be thinking about selling yet.
Housing is a long term game. Prices in the Bay Area will go up. Patience young grasshopper.
Certain areas in the bay area*
Also, why real estate remains one of the more riskier investments.
Depends on the area. Did you buy in a non schooling area?
Schools are 7 and up, high school is 9
Dang, these kids are overachievers. I entered high school at 14.
Going down more - based on Zillow the prediction for year is a further 3-15% drop , depending on the area
Link? Quite likely in the areas which went up because of Apple, Google and Facebook stocks with people who didn't care about schools, etc.
Just search for any house on sale on Zillow for the area you live in or are interested in - then scroll down to the “neighborhood” section - it will show prediction and current ytd. Example https://www.zillow.com/homedetails/1555-Magpie-Ln-Sunnyvale-CA-94087/19614950_zpid/ This is a home in Sunnyvale and it says neighborhood is ortega and the drop for the area expected to be 12%. Too many rich in Bay Area but at the end anything that goes up fast has to come down - (btw I own a house )
Refinance if rates are lower. Only monthly payments matters now.
As if the appraised value is the same as purchase price; any drop in appraisal you’ll have LTV>80% and pay PMI
The likelihood of a gain anytime in the next 5 years is unrealistic.
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.
1.3M while making 170k?? How are you affording the monthly payment?
Dual income, should have said our house
Sounds like the household has a TC of 340k