New to the Bay Area. Both parents (one kindergartener) working in stable start ups. Cash savings: about 200K Joint monthly income: about 10K Down payment: 140K Is it a good idea to buy a condo for around 700K in this market? or is this utter stupidity? Thanks in advance. #assets #investments #homeadvisor #buypower #realestate
You are priced out
Yes
You could buy with a focus for long term. Ideally I would encourage you to wait for a month more when markets go down a bit more as the housing prices may reduce. It won’t be drastic. Wait this quarter out to find out about recession. If there is going to be a recession you would want to have cash in hand. So make your decision based on math. If you think you do not have to worry about financials after investing in house for next 10 years then go for it. However stable the startup is, you cannot predict their business decisions during recession. So count your job at Google as safe play and see if you could sustain with one income after buying a house in the worst case scenario. PS: I know a friend that bought a house in Fremont for $990k and today it’s worth $780k. It may not go down a lot as well.
I would wait. Market will correct itself so you can afford something sooner than later.
Thanks @fubar2020. How long do you suggest?
I don't know. My guess is at least a year or so. The housing market is way too overpriced for the average person to afford anything. It is simply unsustainable. DM me if you want - mind if I ask what you do at Google?
Housing decisions should be made keeping in mind your financials for next 5-10 years and not just current situation.
No, condos do poorly in recessions.
Thanks. Could you please explain a little what you meant by “do poorly”?
First to drop, last to rise, meanwhile you still have to pay the HOA dues.
Or find something lower price. 550-650K. That will keep your payments below 3K. As long as you get mortgage rate of 3 to 3.25%. Right now the rates are pretty high
Both are working in “Stable startup”. That was a red flag, your lender will explain more while you will go underwriting. You get nothing in 700K in Bay Area, you will have to wait.
I understand that nothing is stable in this market. There are in fact small condos in San Jose and Santa Clara in that range.
It could be or could not be that bad red flag in stability but from lender’s perspective it is, they do look at it differently in terms of your employer’s sustainability prospects in tenure of your mortgage.
How can someone working at google have joint monthly income of 10k?
You can’t afford 700k condo with your income.
Why not if that 10k is after tax?
Cause the monthly payment would be around 3.5k-4k for a condo. If his wife loses a job and makes half of the income - they’re in trouble.