Bought a house in Sunnyvale for 2.2m at the height in 2018 summer. Currently underwater. Redfin says it is 1.9m which I find bs. Probably 2.0-2.1m. Can’t stomach the fact that I have to make mortgage payments on something that is going down in value. School district also sucks. So have to save up for private school now. Just stressed with the financial situation. Predictions / perspectives from long time Bay Area residents please. I thought house prices only go up. Household TC: 650k Mortgage left: 800k
Dude it’s short term. Won’t go down in value another 5 years from now. Why are you stressed?
Is it really short term? With remote work don’t you think the real estate in bay will not be as high as before
I agree he shouldn’t be stressed, but what about the opportunity cost lost of investing this money somewhere else?
The drop in value doesn’t have any meaningful impact, unless you need to sell in the near term. In the long run, real estate generally does well so you shouldn’t worry too much about short term drops. As for school district, you must have researched this before buying? Schools impact prices quite a bit, every realtor knows how good or bad your neighborhood schools are and I would be surprised if you didn’t know about schools in your area before deciding to buy.
Problem is we were very naive. School ratings are 4, 6, 8 (homestead high)
You weren't naive. You brought the house for short term gains as investment. Sell and move to better school district. An investment will not be an investment if if doesn't have risks. Sadly for you it went the other way. You can accept the loss it hold till it bounce back.
get Alibaba calls, thank me later.
BABA is the new TSLA
The ongoing investigation on baba is scary…
Sorry for OP but I hope Bay Area implodes. Why is a house worth $2.2M in the bay if it’s worth $200K almost anywhere else? Weather is slightly above average but it’s a terrible place to live by almost any other measure. The values just don’t make sense other than the extreme housing shortage precipitated by NIMBYs refusing density and demand caused by centralization of tech job market. I’m rooting for the distributed/WFH revolution.
Bay Area housing will never drop. Why do you think housing prices have *increased* since WFH started? Tech jobs have little to do with it. Reasons: - California government is corrupt - Infrastructure is shit - The homeless have powerful lobbyists - Taxes are high - Weather and landscape is superior to all other US states
Sorry OP but I also hope it implodes. Artificially inflated prices are toxic
Just chill dude. All the people who don't have houses in bay will keep hyping up how companies are moving and how bay area market will crash just to make themselves feel good. Reality doesn't change for what you or they think. It will have it's correction and then pick up again.
Just any other homeowner in Bay Area : Stay put, it will appreciate.
Lol ya all these people getting hyped up for nothing.
The rate of home price increase between 2013-2018 is an aberration and not the norm. If you stay put for 7-8 years, you'll be OK
Hmm. What is your prediction on how it will go up? Will this go up to 3m?
Let me bring my crystal ball out 🔮
Can you sell and buy in Cupertino? Their prices are relatively low right now as well. However, it’s still probably not a good idea since transaction costs are huge. Just pay for private school, or rent out your existing home and rent a place with good schools. Do a cost benefit analysis of all decisions. Don’t make a rash decision of dumping your house on the market to realize a loss.
This is a very strange mentality, you probably need to consult a financial planner to give you a more realistic understanding of different types of investments and what to expect. If you intend on staying in the house then the value means nothing other than cheaper property tax. If you plan on leaving then rent it out and if there is a loss, write it off on your taxes, sell when it’s regained the value plus fees. If you want to buy another house (don’t do this till you have a better understanding of finances please). Then take out a home equity line and use that as the down payment. In general you are in a very strong financial situation, but you’re lack of understanding will be extremely detrimental if you don’t fix it ASAP. “A fool and his money are soon parted” You are clearly very smart in tech to have such a high TC, but you now need to be smart in investments to maximize your future wealth and mental health.
This
Btw. If the principal is 800k and the home is worth 1.9mil then you are not “underwater”. Underwater refers to the principle being more than the current value.
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650K TC and only 800K mortgage. Just chill for a few years it will be paid off.
Totally agree w this. Your TC is great. Long term there’s no downside in the bay!