Instructions to my son on how to buy a house in the SF Bay Area (San Francisco: foreclosures, health insurance) - San Francisco - Oakland - California (CA) - Page 14 - City-Data Forum

Ultrarunner · 03-01-2016, 10:23 PM

Funny this should come up...

The clerk at Safeway in San Leandro bought 5 homes over a two year period... two in just his name and 3 with another Safeway clerk... not managers... just in the Union.

This was in 2006 and 2007... he did end up losing all of them to foreclosure... so "Buying" a home was certainly very easy not too long ago... he is married now with a child and renting and hopes to buy again... thing is he can't afford any of the homes he let go.

MountainHi · 03-01-2016, 10:27 PM

Quote:

Originally Posted by bodyforlife99

Maybe your Dad and the fathers in your neighborhood earned more. Not sure what to tell you. I remember working for a grocery store in 79-80 and the journeyman clerks made $11 an hour. That's only $23K a year. No one on that job could have gotten a house. Not sure on cops and other professions, but we definitely had dual incomes in my neighborhood. My household was actually the exception, but my father worked 7 days a week.

Those were the "stagflation" years. Unemployment was relatively high for some of those years. People would be hard-pressed to buy in the Bay Area at that time, on a non-professional salary, unless they had a 2nd income in the household. People in lower COL parts of the country were able to buy eventually, but they had to downsize their expectations, or take in a renter.

Ultrarunner · 03-01-2016, 10:30 PM

Quote:

Originally Posted by 2sleepy

That was my experience in Northern California. And I never saw 17% mortgages, 13% for a while, but there were plenty of opportunities to assume mortgages at much lower interest rates. In fact in 1985 I assumed a loan with no credit check or qualifications, it was a 9% 30 year fixed loan, I gave the seller $20,000 for his equity and moved in a month later. In 1991 I refinanced it at 7%. I was a single mom with 2 kids, my house payment was about 30% of my gross income.

There were loans that could be assumed before that was changed... even then "Wraps" were being used when someone was selling and had a very attractive interest rate.

A couple I knew bought a two bedroom condo with a 15% rate... parents were lamenting their kids would never be able to enjoy the lifestyle they had because of the outrageous interest rates...

If you would have said interest rates would be in the high 2 to 4% range in 2015 back then... you probably would have been committed.

Another friend was in High School at the time and did a summer intern in Cupertino for Apple... she liked the job so well... she went fulltime after high school and never did go to college... her Dad advised her to put every penny into Apple stock through the employee plans... when she later married they sold her stock and paid cash for a modest home in Campbell California.

Each generation has to make it's own path and his opportunities and obstacles that are unique.

Ultrarunner · 03-01-2016, 10:34 PM

Quote:

Originally Posted by MountainHi

Those were the "stagflation" years. Unemployment was relatively high for some of those years. People would be hard-pressed to buy in the Bay Area at that time, on a non-professional salary, unless they had a 2nd income in the household. People in lower COL parts of the country were able to buy eventually, but they had to downsize their expectations, or take in a renter.

Those were also the years that you could buy a city owned abandoned home in Oakland for $1... no two income household needed.

I use to walk past homes that had been abandoned and know people that bought East Oakland homes for a dollar... you had to move in and spend something like $5,000 in improvements over 5 years and if you did... the home was yours for $1.

There were many Bay Area homes that would go begging... Oakland, Richmond, Pittsburg, East Palo Alto... even Rancho Rinconada in Cupertino, etc... Rancho homes were concrete block with two circuit breakers for electrical power and built in one day...

https://en.wikipedia.org/wiki/Rancho...no,_California

Four years ago in 2012 there were over 40 single family homes for sale in Oakland on the MLS under $60,000... the truth is anyone with a steady job could afford one.

MountainHi · 03-01-2016, 10:54 PM

Quote:

Originally Posted by Ultrarunner

Four years ago in 2012 there were over 40 single family homes for sale in Oakland on the MLS under $60,000... the truth is anyone with a steady job could afford one.

What neighborhoods were they in, and what condition were they in? Were those foreclosures?

NoMoreSnowForMe · 03-02-2016, 01:30 AM

In 1995, during one of our recessions, I bought a condo in Davis, Ca for $69,000. I had terrible credit and couldn't get a bank loan. Banks didn't want to loan on the condo. I was able to put 5% down and buy on owner contract for 10%, which was just a little above what banks were charging back then.

In 1990, I was able to buy a 2 acre parcel in WA during a downturn in the economy there, and put down $4,000 on a $16,000 full asking price, and paid 10% interest, again on an owner contract. After improving the lot with a driveway, well and putting in electricity and a septic system over time while living in an old Airstream trailer on the property for a couple years, the market had rebounded a bit, and I sold it for $47,000 (to the guy who put in my septic system) and used some of my profit to buy the condo in Davis. I had bad credit for both properties.

So, yes, you can buy properties with bad credit or low incomes during down turns in the economy, when sellers are desperate to sell, and you can offer them a sale with an above-market interest rate. But, although it sounds like I got "lucky," I waited many years for these opportunities to present themselves. And when they did, I was ready with savings.

BTW, I bought both without a workhorse husband's second income, or any other help. And I've only ever made an executive assistant salary.

My daughter did the same, saving for many years, and taking advantage of the crash to buy first a home in Salinas when she was working in Monterey - which she did on her own on a manager's salary of $80,000. Then, she bought a home in Oakland on her own. She bought both with FHA financing with 3% down. She saved and had great credit and did it without a second income. She currently makes about $110,000 in the SF Bay Area.

She had been thinking she'd have to leave the area. Was she lucky? Well, she had been saving and had been very frugal for many years, so she was able to take advantage when the market crashed. Does that make her lucky? Or prepared?

No husband was required, BTW.

bodyforlife99 · 03-02-2016, 03:29 AM

Quote:

Originally Posted by 2sleepy

That was my experience in Northern California. And I never saw 17% mortgages, 13% for a while, but there were plenty of opportunities to assume mortgages at much lower interest rates. In fact in 1985 I assumed a loan with no credit check or qualifications, it was a 9% 30 year fixed loan, I gave the seller $20,000 for his equity and moved in a month later. In 1991 I refinanced it at 7%. I was a single mom with 2 kids, even at 9% my house payment was about 30% of my gross income.

Good for you, and the rest of you that commented. Of course, for the vast majority, those things were't happening. As Mountain said, we were talking about a time from mid 70's to early 80's to simply emphasize that it's a bit of an embellishment to say people haven't experience tough times like these before. Nothing more, nothing less. Listening to many of the posters on this forum, you'd think we never went through a recession before. And we just had a very nice window for people to buy just a few years ago. There are ebbs and flow in the housing market like there always are and always will be. It's also funny to hear people make the claim that they can't buy a home and yet somehow be able to pay the rents here. If you can rent in the city, you can buy.

CA4Now · 03-02-2016, 05:18 AM

Quote:

Originally Posted by 2sleepy

I never saw 17% mortgages, 13% for a while, but there were plenty of opportunities to assume mortgages at much lower interest rates. In fact in 1985 I assumed a loan with no credit check...

Agreed. I never heard of anyone paying the mentioned 18%, unless it was on an adjustable rate mortgage.

CA4Now · 03-02-2016, 05:20 AM

"Surveys by the National Assn. of Home Builders show that less than 20% of new construction in recent years has been for entry-level properties. Before the recession, that share typically hovered around 30%. More than half of single-family houses sold in recent years have been 2,400 square feet or larger, compared with about 40% a decade ago.

'This is the first time in the supply history of housing where, for whatever reason, a giant new generation is not being served,' said..."

Why millennials are staying away from homeownership despite an improving economy - LA Times

bodyforlife99 · 03-02-2016, 05:26 AM

Quote:

Originally Posted by CA4Now

Agreed. I never heard of anyone paying the mentioned 18%, unless it was on an adjustable rate mortgage.

And you were supplied a list of mortgage rates from that time. If you choose not to read it, that's up to you. Historical mortgage rates are readily available. Just because you never heard of anyone paying them doesn't mean they didn't exist.