To buy or not to buy in the Bay Area?

[mysticaltyger]

Originally Posted by bigdumbgod

There's a lot of high-density development along rail lines old, new, and under construction. North 1st St. along the Light Rail, and the future places around the BART extension to Berryessa are two examples. There have been similar developments along CalTrain on the peninsula.

This is true, but they're never really on the scale needed. The Bay Area is a high demand area, and as such, is unlikely to ever be overbuilt as long as it remains popular.

[Azmordean]

Are bidding wars happening in the lower end condo market, or mainly for SFH? If so I'll probably just rent, I'm not interested in that nonsense.

A nicely kept but older condo came on the market recently in Mountain View (Whisman area) for 449K. It is in an older small development that looks kind of dated from the outside, but has a great park like courtyard with pool. The unit itself is large (2br, over 1000sqft) and nicely renovated with two balconies, one overlooking the nice courtyard and one off the master BR. It seems like a decent buy for a pretty good location (I prefer to avoid anything over by Rengstorff as I just don't like the apartment row atmosphere over there). The condo fees are high at 560ish but that does include hot water and earthquake insurance among a bunch of other things.

If I had 20% down I'd very seriously consider it. It's pretty perfect for me (a single guy) in a location I really like (I live in a nearby apartment now). I'd like a fireplace but that's not a deal killer. Avoiding PMI the mortgage would be fairly similar to renting even with the fee. But the most I can realistically muster is 10% and that'd be a stretch. That would leave me with a payment close to 3K/mo. While I can probably technically afford that, it's more than I want to pay and a bit uncomfortable - though maybe the tax break would make up some of the difference (rent is 2550 including some utilities).

[roadwarrior101]

Seems rather inexpensive to me for that area, but then again, it is old and dated. You can always do a FHA loan to get in the door and refi later, to get rid of the PMI, like we did. It was a stretch at first, but it has paid dividends for us long term. I also don't think prices in Mountain View are going down.

I can tell you that our condo complex has had bidding wars, but its a newer property and mainly 3 bedrooms.

[thechoson]

Originally Posted by Azmordean

Are bidding wars happening in the lower end condo market, or mainly for SFH? If so I'll probably just rent, I'm not interested in that nonsense.

A nicely kept but older condo came on the market recently in Mountain View (Whisman area) for 449K. It is in an older small development that looks kind of dated from the outside, but has a great park like courtyard with pool. The unit itself is large (2br, over 1000sqft) and nicely renovated with two balconies, one overlooking the nice courtyard and one off the master BR. It seems like a decent buy for a pretty good location (I prefer to avoid anything over by Rengstorff as I just don't like the apartment row atmosphere over there). The condo fees are high at 560ish but that does include hot water and earthquake insurance among a bunch of other things.

If I had 20% down I'd very seriously consider it. It's pretty perfect for me (a single guy) in a location I really like (I live in a nearby apartment now). I'd like a fireplace but that's not a deal killer. Avoiding PMI the mortgage would be fairly similar to renting even with the fee. But the most I can realistically muster is 10% and that'd be a stretch. That would leave me with a payment close to 3K/mo. While I can probably technically afford that, it's more than I want to pay and a bit uncomfortable - though maybe the tax break would make up some of the difference (rent is 2550 including some utilities).

Bidding wars are happening across the spectrum. Just read another article on this about 30 minutes ago. A SFH across the street from my in-law's house was listed at $750k about a month ago. It sold for $900k CASH, and the neighbors just moved in today. That's how nuts things are.

The inventory is extremely tight, and people that want to buy to live in the homes are competing with investors looking to flip or rent it out.

I can guarantee you that condo in MV will go for quite a bit more than the 449k. Agents are advising sellers to list at a slightly lower price to get a bidding war going. It'll probably go for close to 600k cash with no contingencies or something wacky like that.

[aslowdodge]

Lot's of bidding wars going on. Last year I was trying to buy a townhouse in Concord as prices were pretty low IMHO. Tried to get about 12 of them. I bid at asking or over by 10% with all cash. I lost on all of them. Since then the prices have doubled on them to perhaps a bit more than double. Much of that appreciation happened within 5 months.

[beeneverywhere]

We are in the thick of it… We started looking last October and wish we had offered more than we did back then as prices are up another 3 to 5% since. We lost our first bidding war last October and we went 10% over asking- no contingencies… We've essentially lost 2 to cash heavy buyers, one 80 to 90% down and another all cash. And simply stopped bidding on several other homes we thought the prices were just going beyond insane.

We feel like we’re in a bubble as we have watched the prices go up even as we hunt. However, a bubble here can last 3 years and never retract back down to where it was last year. Perhaps it never goes down…

There is very little inventory, we’re lucky if there’s 3 houses a month that come close to our requirements. And even those hit maybe 75% of our wish list. It’s a warzone out there and the good properties don’t last after a weekend. Add to that, the good properties typically don’t even open up during the week for showing preventing an opportunity to throw an offer in early. They hold an open house, and then take bids 2 days later.

We’re looking in the 900 to 1.25 range (school dependent) which we feel is a real sweet spot with a lot of buyers unfortunately…

If you ever considered selling, now is the time!

To answer the question to buy or not buy all I can offer is this. If you buy now and its a bubble, hopefully you plan to stay in your home 5+ years in the event it does drop. But remember 5 years from now more than likely you will not see interest rates at this level.