Don’t get FOMO during bidding war
Bidding war is back for some homes. Just want to share my story. I was in market buying homes similar time last year. I was really anxious because my household tc is around 400k. Was worried that we would never be able to buy a home in Bay Area. The open houses we went to, was listed around 2m, sold for 2.4-2.5m, out of our price range. It’s 1200-1300 sqft small homes in Belmont/San Carlos. The homes valuation dropped to 1.8-1.9m by the end of last year. Let’s do the math. 480k down payment , 5% rate 2.4m 20% down, it’s 12k per month. 1.8m 27% down, it’s 8900 per month. So it’s like losing a paycheck per month for next 30 years. It’s a very expensive burden. Bay Area housing always ups and downs. Even if it didn’t came to your price, a 15% drop will scare some sellers and you can lowball them. #mortgage #housing #sanfrancisco
So why didn't you buy it last year? I see this argument so often and I think it's flawed. When the market is soft, people get scared and think it'll get softer. Also, over time rent will continue to go up. It's hard to put a value on owning a home and owning stability.
This isn't a fair comparison because I don't think rates are at 5% currently so you could use the extra money to buy points but that would reduce the down payment.... If rates are actually 5% my apologies...
Great job buying the dip last year. Some of my friends also did that when homes were $500k below peak and now they already have 200-300k appreciation
Not in Bay Area but we purchased our home in Q4-2022 in Seattle east side. The prices and rates both are up since our purchase.
sssh… we need those people to pump the price
The market corrects but the recovery always beats the previous peak
problem is, no one can predict what gonna happen in future. it can drop 10%, it can also go up another 10%. fed can increase interest rate due to blah blah blah, tomorrow they can pause interest rate due to blah blah blah. next day they can lend huge money to banks due to blah blah blah. next week, they say you know what, we find a blah blah blah issue in a blah blah blah statistics that we should drop interest rate now! you never know. risk control is the key.
And also no guarantee that your paycheck will remain the same. In reality it will start getting lower with age while you still owe 12k per freaking month
Stop commenting on Bay area housing posts, start working on delivering quality produce to my neighborhood farmer’s market this weekend :)