Yet Another Housing Post(yahp)

Sep 5, 2020 42 Comments

So me and my fiance just finished our current lease and moved into airbnb for a couple of months. I have a job change which will pay me ~420k and my fiance finished her nursing school and is searching for a job. Guesstimating her pay should be close to 120-130k. she is a citizen, i am not. Now that the logistics are out of the way, question is should we buy or rent?
Uncertainities:
Both starting new jobs
Recession and the overall economic situation
Housing market might see a correction next year(or not?)

Certainities:
Since she is starting as an RN i am fairly confident in her job stability, not to mention her past medical experinece.
My new company is very stable but its a new team and all that(imposter syndrome)
Budget wise i was looking at 1–1.2 million so that we dont over stretch and worst case payments can be made from her salary.

On the other hand we are young and don’t know what we will do with a house other than building some equity in san jose/milpitas. We love san francisco and the rental market right now is so freaking good. We just don’t want to put another 30k after taxes in someone else’s pocket.
although a certain 5% correction on housing prices amounts to 50k for a million dollar home and paying 30k in rent and buying next year still gives a 20k benefit. Ofcourse i am overlooking property taxes and a lot of other factors.
#mortgage #housing #sanfrancisco

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TOP 42 Comments
  • Buy if you plan to live in it for 7+ years but you are better off saving more before you buy, up your budget by 2x and you can get into a fixer in a nice neighborhood and have a lot more protection and upside.
    Sep 5, 2020 10
    • A nice home in a poor neighborhood means you'll be overpaying and subject to any decrease in the housing market. A poor home in a nice neighborhood means you'll likely not be overpaying and you aren't paying for someone else's improvement choices.
      Sep 9, 2020
    • Boeing
      NerdyRump

      Go to company page Boeing

      NerdyRump
      Buy but buy something you can rent. Location is key and make sure mortgage isn’t close to rental prices around the area.

      Interest rates are at an all time low
      Sep 9, 2020
  • Rent. Buying usually works out better in the long run financially but you’re taking on so much risk during the 30 years while paying down the mortgage (what if you lose your job? What if the property value tanks? What if you have some expensive medical emergency that also affects your ability to work? What if these all happen simultaneously?) that it just doesn’t make sense to chase those small gains. Especially so in a place like the Bay Area where the rent to mortgage ratio is so low
    Sep 5, 2020 7
    • Google
      huli lifer

      Go to company page Google

      huli lifer
      +5.5% equity on 5x your down payment is a 27.5% return... it's not quite right to think of it this way but keep in mind that you can gain equity on the whole value of the house, not just what you put in.
      Sep 7, 2020
    • Yes that's the entire point lol. You put 20k down to own a 100k asset which (historically) appreciates at 5.5%.
      Sep 7, 2020
  • Tableau / Eng
    MrPlague

    Go to company page Tableau Eng

    PRE
    Microsoft
    MrPlague
    Use a calculator?
    Sep 5, 2020 5
  • Amazon
    mika19k

    Go to company page Amazon

    mika19k
    Buying in Bay Area is not financially wise decision as it looks like renting is cheaper, if you factor in tax/insurance/maintenance.
    Sep 5, 2020 0
  • Google
    VAJm76

    Go to company page Google

    VAJm76
    Rent in the area you are considering buying and use that time to confirm you actually want to live there for 7+ years. Interest rates will remain low for at least a year. Renting will likely be the financially 'better' choice in the short run at least because when you buy, you'll be looking at a house large enough for your needs for the next 7 years, while you can rent for your needs today. Buying is essentially paying for room for kids today which you won't be using for a few years.
    Sep 19, 2020 6