Alameda (Oakland: real estate, for rent, insurance)

[daepro]

I have recently located to this island from New England. Currently my wife and I are renting on Shoreline Drive and are looking to purchase a home. I find Alameda an ideal place to live and are seriously hunting down a house. There a nice shops, decent restaurants, easy access to the mainland and beautiful scenery. At this point I see the upsides to this town but I know that often honeymoons end and reality sets in. Is there anyone out there who can burst my bubble? I just need a devils advocate.
Thanks to all you deep thinkers and pessimists out there to help me out.

[bayarea-girl]

Can't burst your bubble, Alameda is pretty nice.

[humboldtrat]

There are plenty of threads on Alameda. Why don't you read them??

[sliverbox]

I've lived here for 7 years. Me and my Wife rent a large house for about 3 times cheaper than buying... which brings me to point no.2. Alameda is like most other "cute" towns in the Bay Area. Its expensive. I occasionally look around, and even now with the housing bust going full steam, anything decent seems to be hovering around 500-550k. Still cheaper than last year when it was around 600k for the same house.

But that makes me wonder why you're desperately looking to buy right this very minute. The likely situation is that prices are going to slide even more. I imagine your rent is like mine and greatly cheaper than buying. So I'd be patient and wait it out.

My only gripes about Alameda is that the place is basically a giant baby factory. Me and my Wife don't have kids, nor do we plan on having them, but if we go out to eat, or go to festivals or what not, every single event is crawling with kids. Not that there's anything wrong with that, but if you're a childless couple, and can make you feel kind of isolated.

Secondly, in the 7 years I've lived here, the town has lost a lot of its charm. It used to actually be just slightly working class with a lot of the old stores selling the same stuff they always did. Its gotten a lot more upscale since then and the people moving in seem to be getting richer and richer.

Lastly, people are fiercely protective here. The papers are filled with non-stop bantering about schools and trying to eradicate new development of any kind. People would rather their homes be the last built on the block. So there's this sort of strong Not in my Back Yard sentiment that rubs me the wrong way. Then again, I rent so I perhaps think this way for that reason.

Overall, I like it a lot here. Pretty safe, relaxed town with a lot of character that other Bay Area cities lack.

[daepro]

Thanks Silverbox for your thoughtful comment.
I understand what you are saying about being a childless couple and how you can feel outside the box when going to events. I think that Alameda is like many suburban towns that attracts families. That's just the way it is. Having young children kind of automatically binds you to other people with similiar aged kids through schools, teams...
Being a recent transplant I am struggling trying to set up a social network and I know that should come in time but not having that kindergarten connection limits me I think.

[daepro]

Hi Sliverbox
I was re reading your comment and I think my situation is complicated and my urgency to buy a house can be due to the fact my rent is high $1750 here. We also own two dogs and most landlords restrict pet ownership. So that leaves me with little choice. Thanks for the thoughts and I am glad that you like living on the Island.

[Tallysmom]

Originally Posted by daepro

Hi Sliverbox
I was re reading your comment and I think my situation is complicated and my urgency to buy a house can be due to the fact my rent is high $1750 here. We also own two dogs and most landlords restrict pet ownership. So that leaves me with little choice. Thanks for the thoughts and I am glad that you like living on the Island.

I was looking around online and saw the average price of a home in Alameda is 648,000. You'll need 20% down, if what I am hearing is true about lenders tightening up and requiring it now, leaving you with a balance of 518,400 to finance. At 30 years fixed with a rate of 5%, assuming your credit is perfect, your payment will be 2782.88 a month. That DOESN'T include taxes and insurance.

You will have to look for a deal, so you'll need a good agent. And you will have to be aggressive. Homes that are decent in good areas and are well or bargained priced are often getting multiple offers. If you can find something you like in the 390,000 range -- you are looking to finance around 325,000 at 5% to keep your payment near 1750.00 (please keep in mind taxes and insurance -- I didn't figure that in to my equation).

Is it doable? Maybe. But if you're JUST out here, you may want to look at other areas, too.

Because this may be the only house you buy out here.

We didn't choose wisely. (We also don't live in Alameda) We live in a marginal area that we thought was up and coming 22 years ago and it didn't happen. We HAVE experienced some great equity and I'm not sorry we bought, but we'll never make enough out of our house to buy into an area we like and not get stuck with an outrageous payment.

But if you really want to buy? This isn't a bad time to do it -- IF you are going to stay here for some time.

[daepro]

You certainly have given me allot of food for thought when you crunch the numbers like that. I am very bad with that kind of thing.
That said there is the emotional component of owning a piece of the rock. A house you can do with what you want. Paint it green, blue whatever. Plant a garden, raise chickens, store your kayak...Will I be happier if I made some money at the end of the day sure but I also try to live for the moment and always try to balance the two. Who knows what the future will bring. Did you ever think that gasoline would be $43 a barrel again? Not me.
So I have to be philosophical rather than pragmatic. Hope that wherever I land it will bring me and the family peace.

[sliverbox]

Well, Here's some idea that might help you out a bit Daepro, and since me and my Wife also rent and also have pets, it could be a good comparison. Of course it all depends on you and what your willing to accept.

I'm not sure what things were like in New England, but there was a rather severe property bubble in the Bay Area. When I moved to Alameda, a decent house could be had for a little over 300k. That's not ancient history. Regrettably, I made a lot less back then. Now those same houses are 500-600k.

We rent a large house with a yard, garage, even a little garden. Its pretty nice. We pay $1,100 a month, but that's me and my Wife's part because we rent the house with one other house mate. It works out pretty well that way.

As Tallysmom pointed out, Buying even at the low end of the market in Alameda would be pretty expensive. I am starting to see some homes- and what I mean by some would be tiny 1-2 bedroom homes in need of some work with small yards- hovering at the 400-450k range.But by and large, the avg is still around 500-600k for a 'decent' starter.

So figure with a 100k down payment you're looking at close to $3,000 a month for the remainder. Taxes will run you another 4000-6,000 in change. That plus insurance and whatever needs repairing or fixed. So we're realistically talking $3,500-$4,000 on avg. per month, or roughly 3x's what you currently pay in rent.

Additionally, California is only 2nd in the country in unemployment numbers. I think its safe to assume rent has no room to go but down. So you might want to start looking around. There's usually tons of houses for rent. I recall this summer reading the Alameda had a 9% vacancy rate. That's pretty high. I also notice that homes that have for rent signs tend to sit for a long time. Sometimes 6 months or more. Perhaps some of these landlords are willing to cut a deal with you.

Anyhow, we personally are renting, saving, and waiting it out. We're probably going to be moving out of the state to where things are less costly in a few years. But at the same time, housing prices here and across the bay will be coming down. So in this economy, it does pay to wait and save.

Good luck with whatever you do.

[Tallysmom]

Originally Posted by daepro

You certainly have given me allot of food for thought when you crunch the numbers like that. I am very bad with that kind of thing.
That said there is the emotional component of owning a piece of the rock. A house you can do with what you want. Paint it green, blue whatever. Plant a garden, raise chickens, store your kayak...Will I be happier if I made some money at the end of the day sure but I also try to live for the moment and always try to balance the two. Who knows what the future will bring. Did you ever think that gasoline would be $43 a barrel again? Not me.
So I have to be philosophical rather than pragmatic. Hope that wherever I land it will bring me and the family peace.

That's exactly why we bought a house.... and if you want to come to my neighborhood (East Oakland) you can buy a piece of the rock for under a 100K. Now -- that house will need a LOT of work. And you're living in a scary neighborhood. And a not walkable neighborhood. And bad schools.

And if you want to do this find a GOOD real estate agent. They can also crunch the numbers for and get you prequalified for a loan so you know exactly how much you can afford...