New Job In Oakland (Berkeley, Alameda: for sale, real estate, apartment)

[ec1957]

Ok, need your help. New job off of the 24 and Oakland Ave in Oakland, CA. I will be moving there and I would like to find a city where I can buy a 3 bed 2 bath home, have a commute no longer than 30 to 45 minutes either by car or by BART. I would like a city that offers me the best bang for the buck regarding home prices. School district does not matter to me, night life does not matter, safety is very important to me. Please let me know if anyone has any good ideas. Thanks.

Bob

[Ultrarunner]

What's your housing target price range... knowing will help immensely in making a recommendation.

[ec1957]

I would like to keep it between 600 and 700 but can move up to 750 if it makes a big difference.

[sliverbox]

I guess you might want to consider the fact that housing is now in a decline in the area. Thus anything you buy today will be a depreciating asset for what has been determined recently for a projected 5 year downturn. Your 700k home might ultimately be worth 550k or less, without inflationary measures thrown in. So you might actually consider renting for a bit due to the fact that renting a house costs 1/3rd to 1/2 that of buying. Not sure if I would pare bargain type language with housing in the Bay Area.

700k will get you a modest house in Berkeley and parts of Oakland.

[sjd]

My opinion, Pleasant Hill will be your best bet. There are many homes in the 500-600k range, it is a good area, and you are only a 20-30 minute drive or 20 minute BART ride. Respectfully, I am not quite sure I agree with Silverbox's theory of how much it will drop. I believe that if you are not planning on selling for the next 3-4 years, buying right now is a great opportunity because there is little competition, you have great negotiation power, and there are tons of homes on the market in which you can choose to buy. No one knows for sure how much it will drop. I personally don't think it will go too far down, but it will be tough for a few years for people who NEED to sell.
Hope this helps.

Let me know if you need some help finding something.

[City Boy]

Originally Posted by sliverbox

I guess you might want to consider the fact that housing is now in a decline in the area. Thus anything you buy today will be a depreciating asset for what has been determined recently for a projected 5 year downturn. Your 700k home might ultimately be worth 550k or less, without inflationary measures thrown in. So you might actually consider renting for a bit due to the fact that renting a house costs 1/3rd to 1/2 that of buying. Not sure if I would pare bargain type language with housing in the Bay Area.

700k will get you a modest house in Berkeley and parts of Oakland.

Every year this is supposed to happen. I'll believe it when I see it. Not everybody buys a house to use as a cash cow. I don't look at buying a home as a depreciating asset, especially in California. Houses are not cars. Renting is ok if you don't plan on staying long or have no other option but it is a huge waste of money.

[sliverbox]

Every year this is supposed to happen. I'll believe it when I see it.

You mean you didn't flip open the SF chronicle this morning and see the front page headlines that home sales are down to their lowest levels in over 12 years? Hmmm.. seems to me that you don't need much proof to see what the market is doing otherwise. Also- the data that mentions what and what is not selling will also tell you that the tiny "appreciation" mentioned lately is actually more to do with the fact that in a housing recession, the upper end will continue selling while the true median- the rest of the market- is actually selling for less.

If you want to do some raw-data statistics, look up something called a " rent-to-own" calculator. What you'll find these days is that the pendulum has swung very heavily in favor of renting. If homes are bought because they supposedly prevent wasting of money, then clearly they aren't serving that purpose.

Let's put it in another way. At the current time, me and my wife save over 70% of our income. for us, this equals about 15% of the avg bay area home's value per year. Recent reports showed about a 2% appreciation increase, which as I've pointed out is actually attributed to the activity in the upper levels of the market. But to be fair, let's use the generic 2% rise anyway. Even so, I'm saving 13% over that 2% per year, given the state of the market. Ultimately, I might be spending money that will never return to my pockets, but what I subsequently save as a result of not paying what would be over 50% of my income on a current mortgage actually puts more money in my pocket over what the current Bay Area home can appreciate.

I see very few homes for sale in my neighborhood actually sell. In Oakland the story is even worse. The East Bay has had an 800% increase in foreclosure rates since last year. A few weeks ago I was in Oakland driving around and saw more houses with open houses than I have ever seen in my life.

A house is just like any other investment. There are good times to buy, and bad times to buy. More than likely buying now will effectively negate the reasons for buying and even so, not show positive gains for 10 years- 5 years of depreciation followed by 5 more to appreciate to a level to compensate for the loss.

Anyhow, I suppose we can endlessly debate about the issue of housing. I just try to look at it from a strictly financial, unemotional perspective. If buying a home is the single most important thing to you, OR you make enough to only have to pay 28% of your income on a conventional fixed loan, then I guess that's your deal.

[Ultrarunner]

Afternoon Silverbox...

I would like to add a couple of comments if I may?

True, certain areas of Oakland seem to have a home for sale on every block. I have looked in curiosity and all 5 open houses I visited last weekend are owned by investor/landlord types. Not one was currently owner occupied. It is known that certain areas tend to have a much higher ratio of rentals vs owner occupied than others... especially in "Lower" priced areas. So far we have not returned to era of the boarded-up abandoned homes of the 70's...

My second comment is that one's take on the market can really depend on your own neighborhood. There has not been a home for sale in my parents neighborhood in over 15 years and before that you need to go back to the 70's. I'm the new kid on the block in my neighborhood... because no one, basically moves until they have to due to medical issues related to advanced age, so it is hard for many to see the ramifications first hand if you are not exposed to it.

My only point is it is hard to feel the market's impact if you are not in the market and not seeing homes for sale languishing in your neighborhood...

[City Boy]

Silverbox I've noticed you're very anti own a house. I've seen post after post from you trying to convince people NOT to own a house but to rent. Just curious why that is. To think a 700k house in the Bay Area or anywhere in CA will be worth in the 500's in 5 years is crazy. It's just not going to happen. Where in Oakland did you see so many vacant houses for sale? The new Condo's being built downtown are filling up very fast and many sold out in a matter of months.

The one I live at for example downtown had 24 units all starting at 400k sold out in 3 months of open house. You said it, a house is an Investment not a depreciating asset like a car. Who cares if the market goes up and down with your home if you don't plan on flipping it in a couple of years? You can do what you want with that house and not have to worry about some land lord telling you whats allowed and what's not allowed, accumulating equity, or hearing your upstairs neighbors having an argument or loud sex at all times of the day or night. The benefits of owning outweigh the negatives. This is the Bay Area not Detroit, owning a home here will never be a bad option.

[Tallysmom]

Originally Posted by sliverbox

Every year this is supposed to happen. I'll believe it when I see it.

You mean you didn't flip open the SF chronicle this morning and see the front page headlines that home sales are down to their lowest levels in over 12 years? Hmmm.. seems to me that you don't need much proof to see what the market is doing otherwise. Also- the data that mentions what and what is not selling will also tell you that the tiny "appreciation" mentioned lately is actually more to do with the fact that in a housing recession, the upper end will continue selling while the true median- the rest of the market- is actually selling for less.

If you want to do some raw-data statistics, look up something called a " rent-to-own" calculator. What you'll find these days is that the pendulum has swung very heavily in favor of renting. If homes are bought because they supposedly prevent wasting of money, then clearly they aren't serving that purpose.

Let's put it in another way. At the current time, me and my wife save over 70% of our income. for us, this equals about 15% of the avg bay area home's value per year. Recent reports showed about a 2% appreciation increase, which as I've pointed out is actually attributed to the activity in the upper levels of the market. But to be fair, let's use the generic 2% rise anyway. Even so, I'm saving 13% over that 2% per year, given the state of the market. Ultimately, I might be spending money that will never return to my pockets, but what I subsequently save as a result of not paying what would be over 50% of my income on a current mortgage actually puts more money in my pocket over what the current Bay Area home can appreciate.

I see very few homes for sale in my neighborhood actually sell. In Oakland the story is even worse. The East Bay has had an 800% increase in foreclosure rates since last year. A few weeks ago I was in Oakland driving around and saw more houses with open houses than I have ever seen in my life.

A house is just like any other investment. There are good times to buy, and bad times to buy. More than likely buying now will effectively negate the reasons for buying and even so, not show positive gains for 10 years- 5 years of depreciation followed by 5 more to appreciate to a level to compensate for the loss.

Anyhow, I suppose we can endlessly debate about the issue of housing. I just try to look at it from a strictly financial, unemotional perspective. If buying a home is the single most important thing to you, OR you make enough to only have to pay 28% of your income on a conventional fixed loan, then I guess that's your deal.

Where are you coming up with 800%? DataQuick has Alameda County at 180 over last year.. but that's nothing compared with Yolo County's 310%

DQNews - Foreclosures Press Release

And I don't think we've seen the end of it yet -- those lending madmen were tossing money to anyone that wanted it. We're really in the first year of the meltdown. So I am really glad I'm not trying to sell my house now, because credit has tightened up. But it'll loosen -- 6 months to a year. Been there, saw that.

I've never seen such a convoluted way of looking at a mortgage payment in my life.... 70% of your earning is 15% of a house? WAY too much math. Really I tried to figure it out!

It isn't just a house. It's a home. Don't you want your own space where you can sit on the sofa and neck with your wife, with no one traipsing through on the way to the kitchen? Where you can paint your dining room aqua and pink and fill it with retro cool dining furniture?

I still say, while right now isn't the best time to buy if you're going to move in a few years, if you are intending to stay put, it's never the wrong time. I know I've said this a million times, my mortgage payment, even with our few refi's and cash outs for remodeling, is 642.50. When we bought the house it was 756.00. And renting was also better financial idea -- we had a lot of people that said we were crazy. In 20 years -- my mortgage payment has more or less stayed the same. My friend's rents? Well golly gee -- them suckers kept going up. Surprise surprise!

While they are paying 1750.00 or more for an apartment or house, I'm now able to save a larger amount of my earnings, because I'm NOT spending that much on housing.

And the other thing I've noticed -- when the stock market sucks, the money flows to real estate. And when real estate sucks, the money flows to the market... my investments are up an average 30% this year. Third year of the sitting president is usually a good market year... election year is usually not, until after the election...

I'm just saying... by the end of next year I have the feeling this will all be behind us. Criswell speaks...