This home is set back from the street with a circular driveway. Sale Price: $2,125,000. Assessed Value: $2,300,475. Real Estate Taxes: $56,220. 15 Woodland
Is it a good time (Summer 2011) to start thinking about buying real estate in the Bay Area?
Hindsight is a great thing… I bought a house in downtown Palo Alto in early 2012, before Facebook’s IPO. Since then, prices in the neighborhood have risen roughly another 20% to 30%. I don’t think this is a housing bubble – Google, Facebook, Stanford, Sand Hill VCs etc only growing, and they aren’t moving anywhere – and new housing is not being built at a rate fast enough to keep up with the area’s population growth. There are still another few IPOs in the pipeline, too (including Palantir) generating more house-hunting wealth. Our real estate agent – in 2013 – is still having a busy time, with houses regularly getting 10-20 offers, bidding wars etc etc and selling within a week of going on the market (yes, even $1-2M houses). I can rent out my house for crazy amounts of money to cover the mortgage and tax.
2011 would have been a great time to buy a place – especially if you were on the bubble of affordability, since prices have only risen since then and it’s not entirely clear to me that they’ll go back down…
It is interesting to see how pessimistic some of the answers (from 2011) on this thread were. I do not share in their pessimism, and I am glad I didn’t in 2011/2012. I think that the economy has re-structured itself around information technology in such a significant and fundamental, way that Silicon Valley and SF will continue to be centers of wealth and wealth creation long into the future.
Tangentially, I’d add that some of these answers sound as if they might have been written with self-interested @in mind more than an actual sound analysis of the economics – i.e. “I have decided not to buy/I can’t afford to buy, here are reasons that make me feel good because they back up why this is a good decision for me”. As it turns out, 2011 would have been a great time to buy.
EDIT: I realize that I have my own set of confirmation biases, but I also am now a couple of hundreds of thousands of dollars richer on paper and I own a home 🙂 It seems to me that the other responses on this thread seem to be from people who didn’t buy and were convincing themselves that it was the right decision – and perhaps it was the right decision for them, at the time. There doesn’t yet appear to be an answer from an actual homeowner, which is why I added my two cents. Moral of the story: everyone has opinions, take them *all* with a grain of salt. If buying is in your life plan, and you have some cash, or you can get a mortgage to make it work then go for it, otherwise you’ll be forever thinking up excuses about why it wasn’t the right time etc etc.