WatchWill this be a good buy if I put a offer at this price?
http://www.redfin.com/CA/Milpitas/790-Alcosta-Dr-95035/home/1271152
I'm looking for a SFH home in milpitas area, seems everything is overpriced. Every open house I go, I see lot of people coming and seeing with their agents.
Why is milpitas and 95131 areas so hot? Lot of C & I buyers are flooding the OH's every weekend.
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
It's hot because Realtors are saying it's hot.
Follow
Befriend (13)
787 threads
1,542 comments
crazydesi says
LOL, what else did you expect?
crazydesi says
You can use this calculator and figure it out.
http://patrick.net/housing/calculator.php
More than likely, you'll be overpaying. I don't think you can get away with not overpaying especially in Bay area.
crazydesi says
Are you new to Silicon Valley?
Follow
Befriend (8)
1 threads
792 comments
Danville, CA
Premium
wthrfrk80 says
No, it's actually getting better. I don't want to say it's hot but the environment is improving especially in desirable parts of the Bay Area.
Milpitas is one of those places where the Chinese and Indians are buying in heavy because it's close to the job centers. I would never attempt to buy there. I can't afford it.
The house down the street from us in Danville was a foreclosure that smelled like mold. It was on the market for a week and is now pending.
Most Americans cannot afford and will never afford to live in the Bay Area. That's the bottom line.
Follow
Befriend (2)
4 threads
119 comments
wthrfrk80 says
Realtors always say everything is hot. That does not explain why OP observed a lot of people.
I think the price around $750k basically puts it within reach of the current FHA housing loans (3.5% down plus $729k FHA loan). That should drive a lot of people. Please anyone correct me if I have misunderstood this.
Follow
Befriend (8)
1 threads
792 comments
Danville, CA
Premium
drtor says
It wouldn't be in my range. I'm not crazy.
I don't inflation is coming. I think it's here...and again, this will force a change in monetary policy.
Another recession is coming. Get ready for it now. Meanwhile, I'm gonna dust off all my soft rock and country CDs from the early eighties. That stuff's gonna be in style again.
Follow
Befriend
448 comments
Campbell, CA
It's called Shitpitas for a reason =/
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
CrazyMan says
If it was called Milfitas I'd move there no matter what it cost.
Follow
Befriend (5)
10 threads
2,329 comments
crazydesi says
Even though that traffic is up,prices are heading down. Why?
Follow
Befriend (2)
14 threads
647 comments
CrazyMan says
also high end prices are still dropping in the bay area
http://dqnews.com/Articles/2012/News/California/Bay-Area/RRBay120315.aspx
http://www.socketsite.com/archives/2012/02/spcaseshiller_san_francisco_homes_slip_condos_dip_in_de.html
Follow
Befriend (2)
44 threads
66 comments
San Jose, CA
crazydesi's website
I said it is hot, because lot of people are showing up at OH's.
Typically, I do not take my agent when I visit a OH or see a new listing on redfin. I directly call the listing agent and say, my agent is out of country, so can you show me so I can decide. 99% of the time they agree and show the home without my agent. 1% are strict then I will look for OH schedule.
This particular house, they did not have any OH or the agent was not answering my phone calls. My agent was able to get hold of the listing guy and he showed me the property. It looks good, but in the same street, two houses got sold for $700k and they were south facing (I'm looking for a north facing one.)
I have been looking in milpitas area for over 2 years now. What ever I like is way overpriced and the funny part is it gets sold also. Some houses even got sold close to million. This is one of the reason, I do not go with my agent (as he always says we have to put offer more than a listing price).
Rentals are also not cheap in Milpitas area, If I look for 3b/2b townhouse also the asking price is above 2400$. Even high end apartments are also asking the same rents.
Seems 750 range is tempting for many people to enter housing market and Milpitas is one of the good location in SouthBay to buy in that price range.
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
These owner got it at a good time to buy. You my friend are out of luck. The last guy in the ponzi scheme that is being kept up by the fed and gov't like a castle of playing cards built in a wind storm.
Nov 10, 1992 Sold (Public Records) $363,000 -- Public Records
You can rent the same house for about 2500 to 3000 in the same area. Then after 2 years buy this place for about 10-15% less in my opinion.
http://sfbay.craigslist.org/sby/apa/2899396275.html
http://sfbay.craigslist.org/sby/apa/2901396783.html
http://sfbay.craigslist.org/sby/apa/2890703419.html
http://www.housingmaps.com/ daily for rentals and be ready to cut work and meet the owner quickly. Unlike houses for sale that are sitting on the market forever, good rentals go very quickly. You only have to be there first once though. ;)
Follow
Befriend (7)
37 threads
1,525 comments
Mountain View, CA
bmwman91's website
Premium
The BA is on crazy pills. This place may well never make sense. Apparently fortune seeking douchebags will continue to flock here for "the weather" so that they aren't uncomfortable while outside (which consists of walking between their house & car, and their car & office).
$750k for a largely unremarkable house in Milpitas. LOL
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
crazydesi says
$2400 is cheap compared to buying for 750K. Crazy talk.
Follow
Befriend (2)
4 threads
119 comments
RentingForHalfTheCost says
I agree. Impossible to predict future prices but this would be my best guess as well.
Follow
Befriend (2)
44 threads
66 comments
San Jose, CA
crazydesi's website
I can understand $2400 is cheap compared to $750k buying ....
giving away 30K per year;;;thats 300k in 10 yrs....after tax dollars ...
Follow
Befriend
2 threads
5 comments
Fremont, CA
Milpitas is close to many employers. Cisco, Tech Companies along 237 and North San Jose. Many residents have dual income and want to live close to jobs. Kids go to multiple classes after school during the week. Living close to work helps them juggle it all. Alviso Garbage dump smell is intolerable during the Summer or whenever temperature crosses 70. It also depends on the wind direction.
Patrcik's Calculator shows estimated value as 670K
http://patrick.net/housing/calculator.php?uaddr=790+Alcosta+Dr%2C+95035
Assuming 2550 Rent. price decline -.67%, Rent increase 2% per year. 3.75 30 yr Mortgage, 28% tax bracket, 20% down, 1% purchase cost, 6% selling cost, .25% insurance, 1.25% tax, .25% maint, Length of ownership 15 years, After tax return on investment 3%.
Follow
Befriend (2)
44 threads
66 comments
San Jose, CA
crazydesi's website
>>Patrcik's Calculator shows estimated value as 670K
Yes thats right, one of the reason, I was planning to put a offer for 700k for this house. It is very close to the calculator numbers. I'm in 33% tax bracket and If I combine state too it is 42% tax.
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
crazydesi says
Damn them realtors. They have the masses repeating their mantras all over the place. Read slowly: If you don't own something outright. I mean actually hold the title, then you have two options.
1. You can rent the asset directly from the owner or pseudo owner (if they have a mortgage)
2. You can become a pseudo owner and rent the money from someone (bank) and pay them for that privilege in the form of interest.
You talk like one way is throwing you money a way, whereas the other is saving every cent. Completely not true. Both have large money losses per month. Right now I believe that owning at that price has way more losses than the 2400/mth figure. More like $4000/mth if you assume a 1-2% depreciation of the house asset going forward. If you punch in 5%, you will scare the bejeezes our of yourself.
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
jserachus says
Change your assumption slightly to 7 years (average time people in the BA own a home) it tells a different story.
House value is 470K! Ah, what is 200K anyway. That is only about 5-7 of saving every cent you can. Nothing really. People throw around these number in real estate like we are all millionaires. Crazy talk I tell yah.
Follow
Befriend (2)
4 threads
119 comments
RentingForHalfTheCost says
I am not sure I understand how the 470k is calculated.
And how is the loss 200k if the price decline is 0.67% per year for 7 years ~=5%?
Follow
Befriend
30 threads
555 comments
San Carlos, CA
Milpitas stinks. Literally.
"Oh yeah, by the way, I probably should mention here the main thing that I always consider when entering into the city of Milpitas — whether or not I am downwind of the notorious mounds of dirt that disguise what are really big piles of garbage"
http://blog.redfin.com/sfbay/2007/04/milpitas_cant_you_smell_that_smell.html
Follow
Befriend
30 threads
555 comments
San Carlos, CA
90% say it bothers them
http://milpitas.patch.com/articles/poll-does-milpitas-stink
Follow
Befriend (2)
44 threads
66 comments
San Jose, CA
crazydesi's website
The area which falls in the block of
Milpitas Blvd, calavaras bld, Hwy 680 and jaclkin road
is not bad. The wind most of the time flows towards dixon landing, warm springs.
Follow
Befriend (7)
37 threads
1,525 comments
Mountain View, CA
bmwman91's website
Premium
I love the Bay Area.
"The trash dump smell probably won't be too bad, as long as the wind blows the way I think it does. Besides, I might be able to talk the sellers down to $700k! For that kind of money, I really can't expect my neighborhood to not smell like a trash dump."
crazydesi, don't take this as a personal attack. I just find it amusing the lengths that we all go to to justify living here at prices that almost the entire rest of the nation would see as ludicrous. I should be making plans to leave this damn area, but I also have strong reasons for staying & putting up with the insanity!
Follow
Befriend (2)
44 threads
66 comments
San Jose, CA
crazydesi's website
>>I also have strong reasons for staying & putting up with the insanity!
Same thing with me too, I want to leave BA too, but where should I go .... all the Semiconductor companies are here (and it is easy to switch jobs)
I do not want to justify the price, smell etc ... its only my frustration after waiting so long and looking to buy ....
Follow
Befriend (7)
37 threads
1,525 comments
Mountain View, CA
bmwman91's website
Premium
If your only reason for staying is the jobs, then you should give that some hard thought. Yeah, you can easily pull $100k here in high tech. That is good for fun gadgets, eating out and a fun car. However, when a really high percentage of people are pulling $100k+ (and $200k+ per household), that "big" paycheck suddenly becomes worth a hell of a lot less when you start looking at housing. Rent is expensive here, and real estate is still stupid-expensive. There are a number of places in the country where the cost of living is 50% of what it is here, and you wouldn't have to take a 50% pay cut (maybe 20-40%) since there are tech jobs there. Sure, the weather isn't as nice, but I guess you have to really ask yourself how much you take advantage of the weather in the first place. Are you an avid outdoorsman, or do you just prefer a comfortable walk to your car from the office?
The availability of high-paying engineering jobs is a plus, although I can see how it is severely hampered by the fact that so many people make as much or more money than me. I have 80% of my extended family here, was born & raised here, and I routinely get out into the SC mountains for hiking/running/biking/climbing. So, the fact that the Bay Area has only one season (anyone that says that there is weather here needs to travel more) is a huge plus for me since I try to spend 5-10 hours per week outdoors, mentally recovering from having an engineering desk job. Having Yosemite / Tuolumne only 4-6 hours away is also a large plus.
Maybe the BA just isn't the place for someone that wants to live their life in peace without constantly pushing the profit-envelope, or that just doesn't see their job as being their passion in life. There are more people that prefer to spend every waking moment at work making money than there are decent houses available for sale, so perhaps this is just the way things are always going to be here.
Follow
Befriend
16 threads
4,426 comments
crazydesi says
The HQ is here, their ops are elsewhere. Intel, Folsom, Oregon, Arizona, upstate new york. AMD much is in Austin Tx. Etc etc etc.
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
drtor says
You plug the assumptions, 2550 rent on the rent side. All the buying costs and assumptions on the owner side. Then say you will sell in 7 years (like the average holding time). Then put in 470,000 on the purchase price side. The overall cost on both sides for the full 7 years is then equal. So the house is worth 470K in my mind. Not a cent more!
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
bmwman91 says
And a windowless cubicle feels the same in Paterson, NJ as it does in San Jose.
Follow
Befriend (2)
4 threads
119 comments
RentingForHalfTheCost says
I think there is a certain amount of contradiction / double-counting going on here. Didn't you also assume -0.67% price change per year? So in effect your analysis is saying:
"If the price were 470k, then prices would fall an *additonal* ~7x0.67% ~= 23k during the 7 years I am there. But it is OK that I lose 23k on the house, because I would save so much money on mortgage vs rent over the 7 years"
Why would rents go up and house prices go down if buying and renting are economically equivalent in the first place?
The way to find the true equilibrium price for buying is to plug in the same rate for both price appreciation and rent increases, and see at what level that leads to breakeven.
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
RentingForHalfTheCost says
Follow
Befriend
16 threads
4,426 comments
drtor says
Inflation rate...as often is the case before the bubble, contracts often allow rate increases based on inflation rates.
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
bmwman91 says
Yep. Which means you actually live in your cubicle, not your house. The house is just for sleeping. It's amusing that people pay so much for a place they'll spend most mostly in a subconscious state. And, oh yeah, you have to pay $4 (soon $5 in CA) per gallon of gas to get to and from your sleeping trophy.
Ditch the house and car. Sleep in your cubicle. Then you can retire at age 40 and have $ left over to see the world.
Follow
Befriend
16 threads
4,426 comments
bmwman91 says
All these things were true in the past, including dual income families, but home prices never inflated as they have since 2000. Eventually they will continue to fall for real sobering reasons...yes people are sobering up.
Today, no one except the RE interest groups and individual keep believing the nonsense and keep pushing it in the media.
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
bmwman91 says
You'll need to stay away from the DC-to-Boston corridor too.
However, there's a strip of civilization just west of that axis which I think is nice: from Concord, NH down to Charlottesville, VA. There's some culture, it's not too liberal or too conservative, there are good jobs, housing is reasonable (at least compared to the SF Bay Area), and there's decent climate with seasons. The Ocean isn't too far away (and it actually gets warm enough to swim in during the summer), and the mountains are just to the west. If you hate cold, move to the southern part of that area. If you hate humidity and/or like to ski, move to the northern part of that area.
Follow
Befriend
16 threads
4,426 comments
bmwman91 says
All these things were true in the past, including dual income families, but home prices never inflated as they have since 2000. Eventually they will continue to fall for real sobering reasons...yes people are sobering up.
Today, no one except the RE interest groups and individual keep believing the nonsense and keep pushing it in the media.
Follow
Befriend (2)
4 threads
119 comments
thomas.wong1986 says
Sorry I don't understand what you mean.
Re chart. Bay Area wages have gone up much more than inflation in general since 1980. That explains to a large extent (but not completely) why houses and rents have gone up much more as well.
Follow
Befriend
16 threads
4,426 comments
drtor says
Well for starters, we eliminated the bottom half which includes wages for manufacturing.. that moved avg salary up by 1990.
Second, we lost half of our pubic companies since year 2000, to around 200 today. It was 400 in 2000 and over 300 by 1994.
Third we moved many jobs outside the region leaving the top posts and on average only 1000 or so headcount which are the higher salary employees.
Fourth, after 2000 we have imported alot of ME TOO crowd from the East Coast with their IVY leage degrees who demand (ugh!) mega million salaries... as if that was ever the norm.
So yes, we have higher AVERAGE salaries today, since you cut out so many people out since 1980. Second we have faced increased competition globaly, which put pressure on salary spending.
Follow
Befriend
16 threads
4,426 comments
drtor says
Follow
Befriend (8)
38 threads
1,996 comments
Pleasanton, CA
Premium
drtor says
Completely agree. However, if I actually put in what I think. That rents and house prices will decline around 4% annually, then the house is only worth about 220K if you sell after the average of 7 years. I didn't want to give the people that already bought a heart attack. Better to break the numbers to them slowly.