Bay area home, buy now or wait?

New okon
May 16, 2019 379 Comments

I’ve been house-shopping in South Bay at Zillow and see that they forecast home prices to go down until at least mid-2020.
But my guts tell me prices will only go up with a lot of companies going IPO this year.
I have $540k in savings and looking to do down payment of $500k on a $900k 2bd, and rent out one bedroom.
TC is $215k and base is $160k.
Should I buy now, or keep renting till next year and see what happens next?

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TOP 379 Comments
  • Google hioki
    1. How the hell you have that much savings with your tc?
    2. Why not just a 1bdrm?
    3. Do what you want. Renting will almost always be the better option in the Bay area unless your considering the very long term
    May 16, 2019 38
    • Drift UOSN85
      NW: $10m+, conservatively, and money in two private funds (Artemis and Crescat). Per above post, RISK ADJUSTED, ETF Fantasy Land did not outperform Bay Area SFH real estate.
      May 21, 2019
    • Microsoft mistermiss
      It just depends on whether the person is actually investing it. I wonder where OPs 500k is actually sitting right now
      May 21, 2019
  • Intel rewt
    Seriously.. how the hell did you make 540k in savings...
    May 16, 2019 17
    • Apple fadedead
      Well, if you make over 350TC, it is not that hard to save 100k a year. That means, 420k in 4 years is possible for most people.
      May 21, 2019
    • New / Eng JexD77
      I see thanks, where you save?
      May 21, 2019
  • Nvidia figifaf
    If anyone knew they’d be making millions in housing futures instead of posting it here
    May 16, 2019 0
  • Google FetaCheese
    With the TCs on here, it’s insane that people are acting like they don’t have $500k in savings. What do you all do with your money? I save $100k/year and live well.
    May 19, 2019 8
    • Ooyala / Other jgy65d
      Hah such BS from @ebay .. ya you bought you two properties for pennies on the dollar if ur here 18 years... First comer advantage... what else are you gonna tell us.. probably have no kids or wife and work 12h a day ... Fantastic SV life
      May 19, 2019
    • Aon Hewitt sfstreets
      Doesn't matter when eBay bought it looks like they are responsible with money and made a lot less. Their point is everyone else makes so much more and they aren't budgeting/saving properly
      May 20, 2019
  • New okon
    OP
    I have 4 yoe. Not sure about people saying it’s impossible to have 540k of savings. I earn 120k net anually. Rent a decent 3bed in prime location and share it among 5 people for $800. Buy groceries in cheap asian markets to cook for weekdays, and eat like a king every other weekend. I buy new (cheap) clothing once a month or two to stay sharp. My primary source of entertainment is the internet, and I almost never go to the cinema. I like hiking, trailing, etc (they are free). I only go to club once in a year for special occassions if invited by friends. Total spent per month is $1500 or $2k top if I decide to take a little trip. Every year I save $100k+, invest a bit in stock and wealthfront for additional 2k-10k per year. And guess what, I have a grilfriend too, but we always pay for ourselves except for special occassions like birthday or valentines.

    Think about all fresh grads who work in non-tech. If they can survive with $50k annual gross, we can too. Of course this is assuming you don’t have dependants.
    May 19, 2019 12
    • Western Digital SanDisk
      In your case, rent and not buy.

      The flexibility is better and to be honest right now as a single dude thats what you need.

      You also can live anywhere with bad school, but you don’t want to lock into a bad home for years.
      May 23, 2019
    • Fake .. doesn’t add up
      May 25, 2019
  • Juniper / Eng sixpack
    If it is for investment purpose, wait till recession hits. You can buy that $900k house with your current savings. All cash. If it is going to be your primary residence, it doesn’t make sense to wait especially when you are ready.
    May 16, 2019 3
    • Amazon .,.,.,.,
      I guess you have been in this industry less than a decade. Optimistic is good but do not over confidence. At the end, do whatever you think it sounds.
      May 19, 2019
    • Cruise Automation slwpquxle
      If we could predict a coming recession and believe we’d weather it employed, we would all be saving our TC to buy the bottom.
      May 19, 2019
  • Facebook public2
    If you plan to own for a long time and continue to rent a room yes, buy yesterday. Also no reason to do more than 20%. Invest the rest.
    May 16, 2019 4
    • Amazon saywha
      Agree with the advice. Minimum is 5years.
      May 19, 2019
    • Nvidia JenSon
      Totally agree, if it is your primary residence, buy asap.
      May 19, 2019
  • Facebook Pascality
    Housing is consumption, not investment - decide accordingly.
    And no-one (not Zillow, not your realtor, certainly not people on Blind) really knows what will happen to the housing market.
    May 19, 2019 12
    • Facebook HMjq67
      Pascality talks some sense. That dude who called him a noob, good luck with your net worth.
      May 20, 2019
    • Facebook Pascality
      Ad-hominem attacks (calling someone a 'noob') aren't useful to discussion. So I will ignore it.

      Rent-producing properties are obviously an investment, but that's not what we're talking about here. We're talking about a home you live in.

      Leverage is one important advantage in favor of housing. Margin accounts are way more expensive than 30 year mortgages. Another argument is the lack of taxes on the first 500k of appreciation.

      Tech may grow a lot, or may not. Who knows? If your argument is something like "Bay area house prices will go up 10% annually in the next few years", then assuming you're right, of course buying a house is a good investment.
      May 20, 2019
  • Zillow Group smigol
    I recommend buying. You are setting yourself up to accumulate equity that way, even if it is only ~$500/ month or so, it adds up. Also, owning gives you the flexibility to do what you want with your space. It seems like your down payment is rather high, I would seriously consider going with 20% down payment at these interest rates.
    May 16, 2019 18
    • Medallia lourhsbsbs
      Is 750k cap overall mortgage cap or for each home ?
      May 19, 2019
    • Google azhkys
      Investment home interest isn't deductible. The cap applies to the total from primary and secondary home.
      May 19, 2019
  • Amazon / Eng
    bbserver

    Amazon Eng

    PRE
    Microsoft
    bbservermore
    You can buy in Seattle and rent it out and make much more in rent for same price home. Use the rental income to rent in Bay area.
    May 16, 2019 3
    • Tableau PulledPork
      Please fucking don't
      May 19, 2019
    • Autolist eFks14
      So people not know you can deduct deprecations from rental properties? It's almost like free money when you file your taxes properly. "Own what you rent and rent where you live"!
      May 19, 2019

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