Is now a good time to buy a house?! (err... Condo)

[Pho King]

Originally posted by: shuttleboi

Originally posted by: Pho King

Originally posted by: shuttleboi
Just curious, Pho King. How much are you making in income? I'm a techie in Silicon Valley and am in the same house-buying position as you.

I'm making around the 100k mark, but I don't have a big league PH.D .... yet

Stanford guy, eh?

If you're looking to buy a $690K house while making around $100K, it's going to be a tight squeeze on the monthly budget. You definitely should start checking out loan rates and such right now.

Haha, I can only afford the 690k place with my gf on the loan - I was only looking for a place for myself, but she talked me into looking at the three story / two bedroom one because:

1. One bdrm lofts are hard to get rid of (mentioned in this thread)
2. The three level one we're looking at has a patio <- yeah i know, not a big deal, but it's unique to the complex

 

[senseamp]

It's going to depreciate faster than it would cost you to rent. Especially condos.

 

[Dr. Detroit]

Another South Bay guy here.

You can find homes in the 650K area or less. A coworker just bought for 635 or so in the Cambrian area, he offered 15K less than asking and go it.

For 650K, a 3bdrm 2-level condo/townhome can be had in the south bay.

Fremont/Hayward/ is cheaper, as is most of the east bay including San Ramon, Pleasanton.

More expensive is up the pennisula, Cupertino, Mtn. View, Palo Alto, Foster City. I always thought the city was more as well, about 10% more.

Home on Union Ave in Campbell for $639K


Row Home in Campbell $639,000


My favorite Lofts at the Walnut Factory $569K

 

[shuttleboi]

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

I've read that Montana is getting to be a really nice place for people from California to retire. You can basically sell your $600K small condo in California and buy a freaking huge ranch overlooking the mountains.

 

[Pho King]

Originally posted by: Fmr12B
Another South Bay guy here.

You can find homes in the 650K area or less. A coworker just bought for 635 or so in the Cambrian area, he offered 15K less than asking and go it.

For 650K, a 3bdrm 2-level condo/townhome can be had in the south bay.

Fremont/Hayward/ is cheaper, as is most of the east bay including San Ramon, Pleasanton.

More expensive is up the pennisula, Cupertino, Mtn. View, Palo Alto, Foster City. I always thought the city was more as well, about 10% more.

Home on Union Ave in Campbell for $639K


Row Home in Campbell $639,000


My favorite Lofts at the Walnut Factory $569K

Hmm, maybe I should start looking at other places....thanks for these!

 

[SuepaFly]

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

Lol, nice Beer.

I think you should wait a little while and see how things pan out. I think right now is a pivotal time. Pretty soon, the interest only loans will be up from people who bought prior and participated in the whole real estate frenzy thing. Some of these people could find themselves owing some cash and foreclose, if this happens, prices will drop. This doesn't sound significant, but when you think that 2/3 of home buyers participated in interest only loans, its pretty scary. Things will probably come to a head around this year or next (interest only loans are 3 to 5 years, in 2004 59% of home loans were interest only).

 

[Metron]

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

 

[multiband8303]

Microsoft Business Solutions....already is.....not to mention - as great as the IT world is - you have no idea how good the AG market is around here...

 

[beer]

Originally posted by: Metron

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

I grew up in Dallas - Plano, actually.
I went to school in Austin.
Please don't lecture me on companies based in Dallas. Yes, I know ExxonMobil is in Irving.

However, if I wanted to live in 80 miles of east-west suburban sprawl, passing through the wretched ghettos of Fort Worth and Dallas, I'd consider DFW. If I wanted to live a suburban life in the burbs with the only three establishments consisting of Fridays, Starbucks and expensive malls I'd consider north dallas. I'd live in Austin again LONG before I set foot in Dallas - you can't even walk around in greenville/deep ellum in the past three years without being shot. Not to say SF is exactly safe, but Dallas just has nothing going for it from the prespective of things that make a city great. Austin's much, much better and I'll probably end up there when it does become house-purchasing time. But until then.....

So until then, I'll continue renting with 2 rooommates a $2700/month flat in a $1.3mil multifamily home in SF and take my views of the bay bridge and morning fog and cost 51-59 temperature ranges and be content.

/rant

 

[shuttleboi]

Originally posted by: Metron

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

Interesting. I would never work for any of those companies. Never.

My brother lived in the Dallas/Forth Worth area during the 80s/90s. He said it was the most racist place he had ever been in.

 

[JS80]

Originally posted by: senseamp

Originally posted by: JS80

Originally posted by: senseamp
Terrible time now. "It's different this time" is the most dangerous phrase when it comes to investing.
These bubbles take many years to burst, not months. Japan is a good example. Did you know that at the peak of their bubble, the Japanese imperial palace land was worth more than all of the real estate in CA? And that their bubble is just now finished bursting after 15 years.
http://transparentre.com/images/33632-31387/JapanLandPrices.jpg

lol are you seriously comparing US housing to Japan?...

US stock market vs Japan stock market

US =/= Japan

What exactly do you see in that chart that makes you believe we don't have years to go before the housing bubble is done bursting?

I don't believe the bubble will "burst" a la Japan style.

 

[zoiks]

Originally posted by: beer

Originally posted by: Metron

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

I grew up in Dallas - Plano, actually.
I went to school in Austin.
Please don't lecture me on companies based in Dallas. Yes, I know ExxonMobil is in Irving.

However, if I wanted to live in 80 miles of east-west suburban sprawl, passing through the wretched ghettos of Fort Worth and Dallas, I'd consider DFW. If I wanted to live a suburban life in the burbs with the only three establishments consisting of Fridays, Starbucks and expensive malls I'd consider north dallas. I'd live in Austin again LONG before I set foot in Dallas - you can't even walk around in greenville/deep ellum in the past three years without being shot. Not to say SF is exactly safe, but Dallas just has nothing going for it from the prespective of things that make a city great. Austin's much, much better and I'll probably end up there when it does become house-purchasing time. But until then.....

So until then, I'll continue renting with 2 rooommates a $2700/month flat in a $1.3mil multifamily home in SF and take my views of the bay bridge and morning fog and cost 51-59 temperature ranges and be content.

/rant

Yea. I used to work for Computer Associates and one day they decided to move our division to Plano. Having been to that area, I had no desire in moving there and dedicating my life living in an area that has 100deg temps over 100 days out of the year and dickheads running around in trucks all day.
Quit my job, found another job that paid 30% more right away here in SF.

Check the Craigslist job section for Bay area jobs and compare that with the Dallas Fort Worth area. You'll notice the difference right away of how much opportunity is available in each place.

 

[erub]

Originally posted by: shuttleboi

Originally posted by: Metron

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

Interesting. I would never work for any of those companies. Never.

My brother lived in the Dallas/Forth Worth area during the 80s/90s. He said it was the most racist place he had ever been in.

What's racist about Dallas? We keep all the black people on the south side, white people live up north..err wait, a second, haha. And do those companies paychecks bounce? Or are you just a limited techie?

I also love how you people complain about urban sprawl in the DFW metroplex..what is CA, if not wall to wall houses, traffic, hippies?

In other related news, everybody and their sister is now in love with Austin. I might end up moving there just because it appears that every single one of my friends wants to live there, and most of them will. I've spent more than 100 nights in that city and I don't really see what makes it so special.

 

[LS20]

even if the bubble doesnt bust and houses retain their price.. property more than 4x salary is a huge stretch

 

[PaNsyBoy8]

i think housing prices are okay at this point. you can actually negotiate prices which is a lot different than it was a few years back.

www.movoto.com

its a great place to see real estate in your area.

 

[Chadder007]

Originally posted by: brtspears2
I would never buy a one bedroom condo/loft/studio. They are tougher to sell later.

Agreed. At least 2 or 3 bedroom for resale.

 

[Metron]

Originally posted by: beer

Originally posted by: Metron

Originally posted by: beer

Originally posted by: KillerCharlie
For $700k in the midwest, you could buy a mansion on 100 acres of wooded land. Do you REALLY want to live in California?

Great, next time Cisco/nvidia/apple/intel/adobe/amd decide to headquarters in the midwest, come back.

kthxbye.

You californians are so ethnocentric (almost as bad as manhattanites). Try Dallas...

How about the largest company in the world (by revenue)? ExxonMobil

7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, American Airlines, Frito Lay and JCPenney... to name a few others with corporate headquarters in Dallas.

I grew up in Dallas - Plano, actually.
I went to school in Austin.
Please don't lecture me on companies based in Dallas. Yes, I know ExxonMobil is in Irving.

blah blah blah blah blah

/rant

I really don't care where you grew up... don't care how you feel about the job market.

You asked for an example (any example in the midwest)...

I answered...

You were owned.

/discussion

 

[senseamp]

If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

 

[Vic]

Originally posted by: senseamp
Terrible time now. "It's different this time" is the most dangerous phrase when it comes to investing.
These bubbles take many years to burst, not months. Japan is a good example. Did you know that at the peak of their bubble, the Japanese imperial palace land was worth more than all of the real estate in CA? And that their bubble is just now finished bursting after 15 years.
http://transparentre.com/images/33632-31387/JapanLandPrices.jpg

Really, that's not comparable. The Japanese imperial palace and grounds are priceless. Trying to put a value on it would be like trying to put a value on Windsor Castle, the Louvre, or St. Peters. How much is the Parthenon worth? It can't be done. And excuse me, but the fact that you implied that it could is proof enough that you know zilch about real estate.
Plus, housing prices in the US are nowhere near what happened in Japan.

 

[Pho King]

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

Senseamp, everything you're saying makes sense to me. I have the exact same concerns and its the reason I haven't bought yet - but then again the whole bayarea housing market is irrational to me. I just seems like it's a damn that's about to burst ....

 

[Vic]

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

$100k/yr = $8,333/mo.

$600k sales price - 20% down = $480k mortgage @ 5.25% 30 year fixed = $2,650/mo. P&I + est. $500/mo. for T&I = $3,150/mo. PITI = 38% DTI

I agree the price is outrageous, but your specific argument is lacking.

 

[trmiv]

Originally posted by: Vic

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

$100k/yr = $8,333/mo.

$600k sales price - 20% down = $480k mortgage @ 5.25% 30 year fixed = $2,650/mo. P&I + est. $500/mo. for T&I = $3,150/mo. PITI = 38% DTI

I agree the price is outrageous, but your specific argument is lacking.

I would wager that 99% (yes I made that up on the spot, 72% of all statistics are made up. ) of the young people in this area making decent money that are buying 600K condos are putting no where near 20% down, if they are putting anything down at all.

 

[vi edit]

Originally posted by: trmiv

Originally posted by: Vic

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

$100k/yr = $8,333/mo.

$600k sales price - 20% down = $480k mortgage @ 5.25% 30 year fixed = $2,650/mo. P&I + est. $500/mo. for T&I = $3,150/mo. PITI = 38% DTI

I agree the price is outrageous, but your specific argument is lacking.

I would wager that 99% (yes I made that up on the spot, 72% of all statistics are made up. ) of the young people in this area making decent money that are buying 600K condos are putting no where near 20% down, if they are putting anything down at all.

Not to mention that $100k a year is only $5500 a month after taxes. Gross income is nice to look at. But your take home is what pays the bills.

 

[Vic]

Originally posted by: trmiv

Originally posted by: Vic

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

$100k/yr = $8,333/mo.

$600k sales price - 20% down = $480k mortgage @ 5.25% 30 year fixed = $2,650/mo. P&I + est. $500/mo. for T&I = $3,150/mo. PITI = 38% DTI

I agree the price is outrageous, but your specific argument is lacking.

I would wager that 99% (yes I made that up on the spot, 72% of all statistics are made up. ) of the young people in this area making decent money that are buying 600K condos are putting no where near 20% down, if they are putting anything down at all.

I won't argue that point, note that I used a 30 fixed rate. An 80/20 interest only ARM payment wouldn't be much more, assuming good terms (say around $3,500 mo. 1st/2nd PITI, or 42% DTI). And sure, those ARM's will eventually adjust, but *OMG shocker* rates are still low, so it's not like they're going to adjust to the moon (once again, assuming good terms, not the isolated illiterate who signs an ARM with a monster margin).

 

[Vic]

Originally posted by: vi_edit

Originally posted by: trmiv

Originally posted by: Vic

Originally posted by: senseamp
If you are buying a $600K condo now in San Jose, be prepared to lose up to $200K in equity. We are just in the beginning of a multiyear bear market in real estate.
You know the area, think about it. People buying condos here are like you and I, younger engineers making around $100K/year. So if they have to take out ARMs just to buy a condo, who is going to support the prices in the long term, especially when higher interest rates kick in on their mortgages.

$100k/yr = $8,333/mo.

$600k sales price - 20% down = $480k mortgage @ 5.25% 30 year fixed = $2,650/mo. P&I + est. $500/mo. for T&I = $3,150/mo. PITI = 38% DTI

I agree the price is outrageous, but your specific argument is lacking.

I would wager that 99% (yes I made that up on the spot, 72% of all statistics are made up. ) of the young people in this area making decent money that are buying 600K condos are putting no where near 20% down, if they are putting anything down at all.

Not to mention that $100k a year is only $5500 a month after taxes. Gross income is nice to look at. But your take home is what pays the bills.

Gross income is how lenders calculate debt ratio. To do otherwise would violate ECOA, Fair Lending, etc.

Keep in mind also that a mortgage of that size would provide roughly $25,200 in tax deductible interest each year, plus an additional ~$4800 in tax deductible property taxes.