Buying a 1 million dollar home in the Bay Area - Good, Bad, or Ugly - Page 2

Thremp · #11 01-27-2007, 07:47 PM

SB,

I wouldn't sweat it this much. The home may be overvalued now, but unless you think you'd lose a chunk more than what they pay you to buy. Its really kinda moot.

Strickly Bidness · #12 01-27-2007, 07:49 PM

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SB,

I wouldn't sweat it this much. The home may be overvalued now, but unless you think you'd lose a chunk more than what they pay you to buy. Its really kinda moot.

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Yah i guess u have a point. Not only will they pay me to buy (>100K in subsidies), but they will also buy my mortgage down to 4% from the market rate of 6.5%

SB

pig4bill · #13 01-27-2007, 07:53 PM

Well, that is the nice part of Foster City, basically in the lagoon. It gets a lot of morning fog though. Very nice if you're into boating, especially sailing.

100k sounds like a lot but it's only 10% of the value of the house. A downturn in real estate values is not unusual at all in the Bay area. Around 1990, home values fell 20% and didn't fully recover until the late 90's.

"Richest company in the Bay area" sounds like Intel. Is the office you're assigned to in Foster City? Most of their sites are in the south bay, which is a good half-hour commute, or more. That area in Foster City is somewhat upscale. There are cheaper areas to live in.

Strickly Bidness · #14 01-27-2007, 07:56 PM

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Well, that is the nice part of Foster City, basically in the lagoon. It gets a lot of morning fog though. Very nice if you're into boating, especially sailing.

100k sounds like a lot but it's only 10% of the value of the house. A downturn in real estate values is not unusual at all in the Bay area. Around 1990, home values fell 20% and didn't fully recover until the late 90's.

"Richest company in the Bay area" sounds like Intel. Is the office you're assigned to in Foster City? Most of their sites are in the south bay, which is a good half-hour commute, or more. That area in Foster City is somewhat upscale. There are cheaper areas to live in.

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Not Intel, and perhaps not really the richest when u consider what's down in San Jose (forgot about Google and such), but its a biotech company and has a huge market cap. And I do love boating, I have a boat that I like to play with a lot out in the marina and stuff...As for the lagoon, can u explain that? So you mean its closer to water so its a better location in foster? Is foster considered nicer than South San Fran ?

Thanks,

SB

Edit: The company I work for is in South San Francisco, not too far away.

Thremp · #15 01-27-2007, 08:01 PM

SB,

Based off what you have said. I can't think of any possible way this is -EV. I'd jump on it like a thai hooker on a white dude.

Strickly Bidness · #16 01-27-2007, 08:03 PM

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SB,

Based off what you have said. I can't think of any possible way this is -EV. I'd jump on it like a thai hooker on a white dude.

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Thanks bro, this is what I was thinking...there just isn't any land or new construction here in the bay anymore...I just don't get how the bubble can really bust if the supply stays stagnant and companies in the area continue to explode and hire new people.

SB

Scorpion Man · #17 01-27-2007, 08:38 PM

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House values will never drop over 10% in value. IMO

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Idiot.

Scorpion Man · #18 01-27-2007, 08:41 PM

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Well, that is the nice part of Foster City, basically in the lagoon. It gets a lot of morning fog though. Very nice if you're into boating, especially sailing.

100k sounds like a lot but it's only 10% of the value of the house. A downturn in real estate values is not unusual at all in the Bay area. Around 1990, home values fell 20% and didn't fully recover until the late 90's.

"Richest company in the Bay area" sounds like Intel. Is the office you're assigned to in Foster City? Most of their sites are in the south bay, which is a good half-hour commute, or more. That area in Foster City is somewhat upscale. There are cheaper areas to live in.

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Piggy makes a great point that you need to investigate. The Bay Area is really weird. THere are "micro climates". You can go like a mile and its like being in a different state. Make sure you are comfortable with the microclimate and the fog -- I am sure piggy is not exaggerating.

Scorpion Man · #19 01-27-2007, 08:42 PM

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What is the down payment as % of your net worth? What is comparable rental rate for what you are buying? Do you have enough income to take full advantage of home mortgage deductions? Can you do this without running afoul of AMT? Do you have a steady job? Are you married? Do you really want to trade up within those 5-10 years?
How much are you putting down as % of home value?

Then maybe i can start to answer.

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Ok a quick summary....I work for the richest company in the bay area and my wife and i bring in a very solid six figure salary. Thing is, I have to buy so renting is not an option. This is because my company will hook me up with huge incentives if I buy due to the fact that I am moving from Indiana and they will give me over 100K in subsidies for purchasing a new home. Thus, I am really worried about the bubble out there and whether or not the value of those homes will go down over 5 years or so....So in short, I do have the income to benefit from interest deductions, and renting is not an option-I need to buy to get subsidies. I guess its more of a real-estate bubble/valuation question here.

Thanks bro,

SB

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Just like my wife. I ask one question and get an answer to a different one. I was asking about rent because I am trying to determine yield on the home, not because I am suggesting you rent.

Strickly Bidness · #20 01-27-2007, 08:47 PM

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What is the down payment as % of your net worth? What is comparable rental rate for what you are buying? Do you have enough income to take full advantage of home mortgage deductions? Can you do this without running afoul of AMT? Do you have a steady job? Are you married? Do you really want to trade up within those 5-10 years?
How much are you putting down as % of home value?

Then maybe i can start to answer.

[/ QUOTE ]

Ok a quick summary....I work for the richest company in the bay area and my wife and i bring in a very solid six figure salary. Thing is, I have to buy so renting is not an option. This is because my company will hook me up with huge incentives if I buy due to the fact that I am moving from Indiana and they will give me over 100K in subsidies for purchasing a new home. Thus, I am really worried about the bubble out there and whether or not the value of those homes will go down over 5 years or so....So in short, I do have the income to benefit from interest deductions, and renting is not an option-I need to buy to get subsidies. I guess its more of a real-estate bubble/valuation question here.

Thanks bro,

SB

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Just like my wife. I ask one question and get an answer to a different one. I was asking about rent because I am trying to determine yield on the home, not because I am suggesting you rent.

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Yes I know this, but I didn't really want to evaluate the investment that way since renting is out of the question for me. Sorry about circumventing, however. Thanks for this advice I think its great.