Young couple seeking to buy or rent a house in Bay Area (Oakland: real estate market, homeowners insurance)

[RD18]

We are looking to buy a home for the first time or rent in the Bay Area where prices are ridiculous. We keep hearing now is not a good time to buy but it seems that mortgage would be the same as renting a property. We are unsure which would be a better option for us.

A little about us-
Make about 90-95k combined currently looking into Vallejo/Benicia Concord/Clayton. Would be putting 10% down and our price range is under 400k if possible. Currently have no kids.

We both currently live with our parents to save $ but I feel like it is our time to move out now. Without being overwhelmed in the future. What would you recommend/do if you were in our situation?

Thanks for taking the time to read this and any advice would be appreciated THANK YOU

[Oakformonday]

I would talk to a mortgage broker or bank to find out how much you can borrow first. Go to open houses and talk to the realtors. They will have someone you can talk to. I just did the math on a 350k loan at 4.75% interest and it would cost about $3k/month total (mortgage, HOA, Property taxes, Homeowners Insurance). That is for a condo in Oakland where taxes are higher so you may come up with a lower number in the cities listed. Good luck!

[dominatorlp]

I am looking in the Concord area right now and I don't think you'll find a SFH under $400k unless it's a complete tear down. Where are you working? I wouldn't go any further than Concord if you're working in SF, otherwise you'll be spending most of your time commuting. If you want to do Vallejo / Benicia you could take the ferry from vallejo to the city. Benicia is more expensive than vallejo because the schools are better there and it's a safer city.

[ryanst530]

Originally Posted by RD18

We are looking to buy a home for the first time or rent in the Bay Area where prices are ridiculous. We keep hearing now is not a good time to buy but it seems that mortgage would be the same as renting a property. We are unsure which would be a better option for us.

A little about us-
Make about 90-95k combined currently looking into Vallejo/Benicia Concord/Clayton. Would be putting 10% down and our price range is under 400k if possible. Currently have no kids.

We both currently live with our parents to save $ but I feel like it is our time to move out now. Without being overwhelmed in the future. What would you recommend/do if you were in our situation?

Thanks for taking the time to read this and any advice would be appreciated THANK YOU

Best option would depend on how long you plan to stay in the area. If you are planning a short-term move (less than 10 years), renting might be the better option since the housing market will probably see a correction within the next 5 or so years. You don't want to get caught upside down on the mortgage right when you are planning to move away, especially since you are young, and it sounds like you will be investing a substantial amount of your savings into the house.

If you are planning on staying in the area long-term (10+ years), then buying a house would be preferable as you will ride out any market corrections and likely come out ahead when you go to sell. Keep in mind though that people seldom stay in the same house for more than 5 years anymore, especially younger people. Be sure to consider that in your final decision.

Buying is preferable under the following circumstances:
1) Your job is secure and/or your ability to find jobs in the area is strong
2) You plan on staying in the area for a long time
3) You have the financial means to ride out housing market fluctuations, and are willing to do so

You really need all three of these to be comfortable, IMO. Good luck!

[Ruth4Truth]

I would continue living with your parents, so you can save. I think you're on the right track, with Vallejo/Benicia. Have you looked at properties there, and gone to open houses, to get a good feel for the market? In Vallejo, it's about location, given that the city is on the ground floor of the gentrification process, to put it politely. Know where the rough areas are, so you know where to avoid buying. There's someone here on the forum, who lives in Vallejo, so she'll have some helpful advice, probably, when she sees this thread.

Hopefully, there aren't issues with the parents, that are pushing you out. The best thing would be to stick it out a little longer, so you can save enough to make a good buy. Good luck!

[sav858]

Well you definitely won't find any houses in Concord for under $400K or even townhomes anymore. If you're okay with a condo Concord could work otherwise you need to look farther out.

[LuvSouthOC]

It looks like there are actually single family homes in Concord for just over 400k.

https://www.realtor.com/realestatean...9_M23568-49427

[sav858]

Originally Posted by LuvSouthOC

It looks like there are actually single family homes in Concord for just over 400k.

https://www.realtor.com/realestatean...9_M23568-49427

Cool, the OP was looking for homes UNDER $400K.

Also FYI when a home is in "Pending" status that means they have already accepted an offer and it's under contract.

[LuvSouthOC]

FYI prices are negotiable and thus homes priced over an exact amount can end up selling for less.

I know what pending means. It means that it has not yet closed and it also means that homes may be found in a given price range, and in this case, it’s just over 400k. The amortized monthly payment difference between, 390k and, say, 410k, is negligible.

Also the term used was, if possible, with respect to under 400k.

[sav858]

Originally Posted by LuvSouthOC

FYI prices are negotiable and thus homes priced over an exact amount can end up selling for less.

I know what pending means. It means that it has not yet closed and it also means that homes may be found in a given price range, and in this case, it’s just over 400k. The amortized monthly payment difference between, 390k and, say, 410k, is negligible.

Also the term used was, if possible, with respect to under 400k.

In the Bay Area real estate market the average home sells for over list price. That's probably not the case where you're from.

That home also needs probably at least $50K in work to be livable and was more than likely snapped up by an investor/flipper with much better financing than 10% down. Trying to suggest there are SFH's in their price range in Concord from 400 miles away is pretty terrible advice, especially with only 10% down.