WatchGreetings folks
I've been living in San Francisco for almost ten years now and am ready to check out - I've rented cheaply (never have paid more than $1K/month, most of the time living in a decent sized 1BR).
But, as you know, that rent money adds up, and after ten years and over $100K, I've got a lot of great memories and experiences but no equity. This is all fine - I've paid down school debts, I've saved, I purchased a car that will last me at least 10 years, and even if I had bought in the first year I could possibly afford something (2005), I'd almost certainly have seen the value of my purchase drop. So, no regets.
But now I think it may be time to move forward, and I am thinking about purchasing a condo. I'm of course educating myself on the potential pitfalls of condo ownership, but so far I'm still thinking a condo is about the only way for me to build up any kind of equity. And the only nearby area that fits my budget is Oakland. (I could comfortably afford $250K+, but would only serioulsy consider condos at half that price or lower). And yes, there does seem to be some places that seem halfway decent in that price range! Nothing fancy, of course, but remember I've rented on the cheap in SF for the past 10 years and am totally comfortable with that level of living. I like having spending money!
I understand there are many problems with Oakland, but I think some of these condos in the Adams Point / Lake Merritt areas are "reasonably" priced. PLus, these neighborhoods, as far as I've experienced, are about as safe as many neighborhoods in SF, based on crime stats, anyway.
What do you all think? I've had this idea for 2-3 years now, and have enjoyed watching prices decline, and I am so grateful I didn't jump into to something at the wrong time
But, I'm wondering if now is the time.
Finally, I wanted to share some realtor-speak with you all, see below. It is from an email list I joined at one point or another for an East bay realtor. Note the scare tactics re: offering more than the list price. I understand this is realtor-speak, but it may have some truth, based on the incredibly low inventories? There's a lot of folks like me who are priced out of SF to whom Oakland, particuarly downtown and Lake Merritt, seems a viable option.
Any thoughts/perspective you may have is appreciated.
Cheers
Scarcity continues, market recovery in full swing
Oakland tops the national list of year over year drop in inventory, down as it is 52 per cent in a new poll by Realtor.com that surveys single family homes, condos, townhouses and co-ops in markets across the country.
The poll confirms our experience: Shallow inventory, increasing prices and multiple offers on properties.
More desirable Oakland properties are remaining less time on the market. Median list price is $346,120 in all residential categories. Experts agree this cluster of factors must attend before a real estate market can begin the road to recovery – which ours certainly has. Four other west coast metropolitan areas made the top ten national list of substantially lower inventories: Fresno, Bakersfield, Portland Oregon/ and Vancouver, Washington and greater Seattle.
How to compete successfully now? We have about an 85% success record with clients who follow our offering price advice. Those whose offers are accepted make an offer not on the listing price but on an evaluation of value rather than listing, on what our calculations indicate will be the accepted sales price, which although of course higher still represents a significant value when compared with 2006 price levels. And clients who succeed are decisive and prepared with pre-approval in hand. Those who cleave to the listing price or a price slightly higher do not stand a chance.
Follow
Befriend (7)
37 threads
1,541 comments
Mountain View, CA
bmwman91's website
Premium
PockyClipsNow says
Dass only in da mownin!
Follow
Befriend (4)
996 threads
1,128 comments
San Antonio, TX
jvolstad's website
bmwman91 says
Do muffler shops cash welfare checks?
Follow
Befriend
1 threads
9 comments
San Jose, CA
I believe that many people on this site underestimate the risk of inflation. With all the money the FED is pumping in the system we (the savers) are almost forced (on purpose) into buying real estate. What are the alternatives:
1. Keep the money in the bank or buy bonds -> the inflation will destroy your savings
2. Invest in stocks -> and swallow hard when European economy goes down the sink dragging our stock market with it
I think that buying a house is a good idea in these conditions as long as you don't use more than 50% of your capital as a downpayment, and you manage to buy a property that will cost you about the same amount in mortgage+taxes+insurance as you are currently paying in rent (for a similar property). There are such houses available these days, just make sure that you can find a job, handle the comute, and be confortable with the neighborhood.
These being said, I also think that right now isn't the right time to buy. The best time to buy is during the slow months of winter, when you don't have that much competition. Prepare yourself, shop for a mortgage, start to know the RE market, and start your shopping in earnest in October/November. Good luck!
Follow
Befriend (4)
25 threads
1,523 comments
Laguna Beach, CA
Premium
Oakland, Compton, Detroit... no, just no unless you plan to have SWAT team members as room mates.
Follow
Befriend
19 threads
1,534 comments
Los Angeles, CA
Yes its generally always better to buy after the 'must buy before school starts' crowd is done IMO. however this doesnt apply as much to flyover or retirement areas like FL/NV.
By september the soccer moms will be shopping for new school clothes, then it halloween party and costume planning, then its T-Giving then xmas shopping - you gotta window from sept to jan/feb to avoid the spring premium in house price.
I did buy in spring my first house. The rest of the year I watched better deals come up constantly and this was 2001 an 'up year' for RE.
Follow
Befriend (3)
10 threads
166 comments
San Ramon, CA
NO! Look at the Redfin map for housing under 450K in the Bay Area. You will notice Oakland is flooded with available units. Why would you subject yourself to Oakland politics and a shrinking police force? Aren't the A's going to jump ship soon? It's also the city of choice for entirely too many violent protests.
I spent a lot of time in Oakland growing up, so it has a special place in my heart, but I would never buy there, even in the hills.
Follow
Befriend
34 threads
62 comments
Sebastopol, CA
I lived in Oakland for a number of years including three years in Adams Point. It's a nice area and walkable to shopping as well as having excellent access to mass transit. You might get in touch with Greg Fielding, he's a broker who posts here sometimes and he has a blog called "Bay Area Real Estate Trends". Condo's bottom faster than SFR and gain value more slowly but they can work well for some people. Oakland is a city of neighborhoods and the people here who consider it as a gang infested hellhole do not know what they are talking about. You might as well conflate the tenderloin with the avenues.
Follow
Befriend (4)
25 threads
1,523 comments
Laguna Beach, CA
Premium
Sorry Tom, but there's a reason Oakland has tons of inventory compared to other East Bay cities, people who live there have to tolerate rising violent crime, with a shrinking police force. Isn't Oakland #1 for violent crime in the state?
Not exactly a good formula for family friendly, or even lovers building a nest, home hunting.
Follow
Befriend
10 threads
419 comments
Don't CA has lots violent people?
Don't they all wish to live and die there?
Shouldn't Oakland house price more expensive?
Follow
Befriend
34 threads
62 comments
Sebastopol, CA
Goran, whether or not oakland is suitable for a particular person or not really depends on that person's needs. Adam's point is a nice area, it is likely to have more of a police presence than the fruitvale or diamond districts. With the current financial condition of California, many of its counties and too many cities being ugly, and the threat of an 8.0 on the Hayward Fault there are a lot of reasons to avoid large parts of the Bay Area. Is city government any better in SF or San Jose? And as far as crime, look at the neighborhood stats, not citywide.
Follow
Befriend (4)
25 threads
1,523 comments
Laguna Beach, CA
Premium
I'm not saying all parts of Oakland are bad Tom, Montclair is nice, so is Rockridge. The hills are nice.
But even somewhat okay areas like Temescal have lots of break ins, and car thefts.
Don't even get me started on West Oakland, or deep East Oakland, I think APOCALYPSE's cannibal anarchy has already begun in earnest over there.
Follow
Befriend (1)
11 threads
224 comments
San Francisco, CA
Check out www.crimemapping.com
Punch in an address and find out what type and how many crimes happen in a certain neighborhood or block. You can filter by date, etc.
Fascinating
Follow
Befriend
9 comments
There are two things that come to mind immediately:
1) I don't think there's a big reason to be in a rush -- there is every indication that interest rates will be stable for quite a while, prices have to continue dropping (or at least remain where they are for a while) to get back in line with long-term trends, etc. Inventories are on the low side now, but there's good reason to think that more places will be coming available within the year.
2) Are you looking at somewhere you plan to stay in for a long time? If you can honestly answer yes, then it may be a good idea: you may be able to buy a place such that the cost of renting money to purchase it is pretty close to the price of renting the place itself. If you're going to want to move to a nicer area, or get a bigger place, or move to a detached residence, or anything similar within a few years, you should definitely keep renting.
Follow
Befriend (12)
10 threads
3,516 comments
Oakland, CA
leo707's website
Premium
PockyClipsNow says
The areas in Oakland that are being considered have shitty to mediocre schools. So, I don't think anyone worrying about buying before school is targeting those neighborhoods.
Follow
Befriend (12)
10 threads
3,516 comments
Oakland, CA
leo707's website
Premium
Tom Stone says
Goran_K says
Yeah, there are some nice neighborhoods where, if I was in a different life position, I would consider buying.
That said I would never buy a condo with a first floor window or a balcony that could be reached by someone standing on one of the trashcans conveniently left on the street once a week. Also, a gated garage -- they still get in from time to time -- or a beater car to park on the street.
The condos that are being considered in the OP, at that price range, are basically crappy apartments that you own. I have been in several during open houses. However, at those prices they are approaching -- or perhaps under -- the cost of rent.
Follow
Befriend (28)
171 threads
4,227 comments
Premium
If you get anything in Oakland, make sure the exits can be engaged in a fire fight from the windows or porches.
Follow
Befriend (2)
33 threads
3,465 comments
Lots of hyperbole here. When people start talking about firefights on the porch and SWAT teams, some people who just randomly read this article may take this literally and get a totally wrong idea.
Maybe one should be more concerned that someone who would pick the moniker "bayarearenter" is a concern-troll. You know, someone posing as a renter but wondering out loud whether "it is now a good time to buy, to build some equity".
Generally speaking, people are a lot more susceptible to this type of propaganda than if a Realtroll(TM) comes out waving both arms and spouting the most recent false anecdotes and NAR sales propaganda.
Just saying.
Follow
Befriend (4)
25 threads
1,523 comments
Laguna Beach, CA
Premium
For West Oakland and deep East Oakland, the firefights are real, except they happen between gang members, not neo nazi cannibals.
Follow
Befriend (28)
171 threads
4,227 comments
Premium
Goran_K says
Give a little time.
Follow
Befriend (12)
10 threads
3,516 comments
Oakland, CA
leo707's website
Premium
APOCALYPSEFUCK is Tony Manero says
Well, that just makes good sense anywhere you live.
Follow
Befriend (13)
103 threads
3,768 comments
Whatever you buy, do not overpay.
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
Make sure to factor HOA costs and maintenance into it by moving your purchase appreciation down to 0 or negative.... at least that's how it works out in my real life scenario and I live in a townhouse/condo.
And of course adjust property taxes accordingly. And just a heads up they will go up by 2% annually in CA, 2% of the initial tax value... meaning if you are paying 2000 one year, next year it will be 2020, and next year up again, and so on...
Equity is an overblown hype when it comes to a commercially sold product, don't kid yourself too much with it. Your only potential to make it worthwhile is if buying is cheaper or equal to renting.
Follow
Befriend (1)
15 comments
San Jose, CA
FortWayne says
No, it won't. Come on, are you just trolling?
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
The proposition decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year. It also prohibited reassessment of a new base year value except for (a) change in ownership or (b) completion of new construction.
Follow
Befriend
3 threads
15 comments
San Francisco, CA
OP here. I appreciate the input from all. I agree with those who say there's no rush even if I wanted to buy (interest rates will remain low, inventory currently artifically low, springtime is not the time to buy, etc etc). That makes sense.
But I am pretty familiar with the Adams Point area and I would be comfortable living there. I fully acknolwedge the crime problem Oakland has. And I am most persuaded by the posts that point out the low number of cops and the ineffectual city leadership. But again, Adams Point has about the same amount of crime as most of the places I've lived in SF and elsewhere (Chicago, Boston).
@Justme - I'm not a troll, I'm just not very creative when it comes to picking a username. Always good to take everything you read on the interwebs with a grain of salt though.
Finally, I'll say that one of the reasons I posted is b/c I have lately heard from several different people who have moved to that area as an alternative to SF's currently rising rents...obviously hearing from 5-10 people that they are moving there does not a trend make, but I thought it intriguing enough to seek further info....
Follow
Befriend (3)
50 threads
368 comments
Oakland, CA
You won't get a fair opinion of Oakland from anyone living outside of Oakland. Although people are quick to point out that Oakland has some of the worst slums in the nation, it's also a big city with over 400,000 people and it has some very sought after real estate as well (Oakland Hills, Rockridge, Montclair, Piedmont for example).
If you would like to talk about Oakland condos further, feel free to email me. I know a thing or two about Oakland condos, and no I am not a realtor, lol.
Follow
Befriend (12)
10 threads
3,516 comments
Oakland, CA
leo707's website
Premium
BayArea says
True, true... but I say this after having watched cops in riot gear line up during my lunch break and people in the office just rushed to the window to see what that loud bang might have been.
BayArea says
Why not discuss it here?
Follow
Befriend
41 threads
907 comments
Ross, CA
BayArea says
I've lived in Oaktown and may move back someday. Buying in nicer neighborhoods there can make sense. But this thread is talking about buying a condo in Oaktown. That is not a wise financial decision.
Follow
Befriend (3)
50 threads
368 comments
Oakland, CA
rowemoore says
And how can you make that statement without knowing the location, the price, the rent to price ratios, etc etc etc.
Follow
Befriend (7)
37 threads
1,541 comments
Mountain View, CA
bmwman91's website
Premium
I lived in Stockton for 5 years for college, and I can say without a shadow of a doubt that it is a scarier place than Oakland. Stockton/Modesto/Manteca are way more dangerous, and you are a lot more likely to be burglarized there than in Oakland. There are definitely parts of Oakland that are dangerous, and those elements spill out into the nicer areas. That happens in every city. Houses in Willow Glen get broken into by people from other parts of the city, too.
As with anywhere, you need to exercise common sense. Don't have valuables or expensive goods visible from any windows. Lock all doors and windows, and if you MUST leave a window cracked, be sure that it has a deadbolt pin that can't be popped up by a stick that is reached in the 3" opening. Keep the exterior of your house clean, but don't go overboard and remodel it so that it looks drastically more expensive than your neighbor's place. Have a big loud alarm on the front of the house, and magnetic pickups on doors & windows. Get to know your neighbors and inform them when you will be away for travel so that they can keep an eye out for moving trucks or other vehicles that don't belong in your driveway.
Follow
Befriend (28)
171 threads
4,227 comments
Premium
This is why you should take out a couple of burglars right after you move in and leave the bodies to rot on the front lawn.
Occasionally walk out, howl at the sky and put a couple of fresh rounds into them to let the scum sucking burglars still at large know you mean business and are ready to rock.
Follow
Befriend (5)
1,070 comments
Santa Cruz, CA
The best way for your to "build equity" if your rent is reasonable is to buy stock mutual funds, assuming you have enough income to save something.
If you have a high income, the mortgage interest deduction may be an incentive. I think condos in general have pitfalls, the unending HOA fees mean that you are essentially paying an extra $100K mortgage forEVER.
I think Oakland has many negatives but I haven't spent much time around there so I'm no expert.
If the area you are considering has lots of sec8 housing, housing "projects", etc. nearby, forget it. This area will NEVER improve. This will be a constant war zone and future criminal breeding center.
Want to build wealth? Buy real investments. Buy AAPL today and let your money double and THEN consider looking for something to buy.
AAPL will double in a year or so. Real estate will double in 40 years or so, or never. You pick.
Follow
Befriend
41 threads
907 comments
Ross, CA
BayArea says
It's a fucking condo in Oaktown! There are MANY, MANY (did I say many?) MANY better ways to spend your money. Like betting on dog races in RI comes to mind.
Buy a house in Oaktown. Not a condo.
Follow
Befriend (4)
25 threads
1,523 comments
Laguna Beach, CA
Premium
I think APOCALYPSE's cannibal anarchy has started. There are burning police cars in Oakland's downtown right now, part of the Occupy Oakland 2012 riots apparently.
Follow
Befriend (3)
50 threads
368 comments
Oakland, CA
rowemoore says
Ok, your third "many" convinced me. You win.
Follow
Befriend (28)
171 threads
4,227 comments
Premium
Goran_K says
Yes, the Realtor®s in Oakland call this a 'delightful belated Easter celebration tradition'
Follow
Befriend (12)
140 threads
1,355 comments
Emeryville, CA
I still like Oakland, really. I think the crime issue, while real, is also entirely overblown and manipulated.
When I was a Chicagoan, crimes on the Gold Coast didn't get reported with the same zeal or frequency that a crime on the South or West Side would. I always suspected that they played into racial stereotypes, as well as desired to keep the tourists flocking in.
I think Oakland and Richmond have become the "place where crime happens" in this megalopolis we call the Bay Area. There were bank robberies in downtown SF, but they were much more enthused about restaurant takeover robberies in Oakland. Why?
Follow
Befriend (28)
171 threads
4,227 comments
Premium
Oakland probably has a lot of foreclosed properties that are well worth squatting, to save some money and get in some training for Cannibal Anarchy. True, you'll have to shoot your way to your car every morning, maybe even engage in fatal hand to hand combat with the starving homeless chewing on your tires but imagine the cost of paying for this kind of defense training.
Follow
Befriend (4)
20 threads
108 comments
San Francisco, CA
Malkovich's website
I know two people in a newer condo building in Oakland. One is a buddy that has been nagging me to buy a condo in his building.
I prefer to find a duplex or triplex in a decent area of Oakland. My friend tells me of the nightmares in maintenance I will encounter as a home owner. And perhaps he is right. But I can't picture myself in a condo as I don't play well with others and, as mentioned earlier in this thread, paying an HOA on top of your mortgage seems crazy.
My friend counters that the HOA is worth it (he pays $500 a month) because they maintain the building and the utilities come with, etc. Yet, I was over there a few days ago and there is obvious work needed on this 10yo building. Paint coming off, wood railings that are rough (don't dare put your hand on them for fear of splinters), redwood lounge chairs that are falling apart. I was thinking "wow, is this where the HOA fees are going?"
But, let me get to the point: As my friend has been suggesting I get a condo in his building, I have been watching prices in his and other condo buildings in OAK. They are trending downward.
Even my friend, who a couple years ago was patting himself on the back for getting such a great deal (he bought with cash) is reversing his boastful attitude with rationalizations like "well, I bought because I wanted a place to live."
The other person I know who happen to buy a condo in the same building in 2009 was proudly telling me how she paid cash for a unit at $XXX amount and that she "stole it." I've been tracking sales and the same size units are selling for the same or lower.
I don't think condo prices are going anywhere and, if anything, probably down. Especially when interest rates start to tick up (though who the heck knows when that will be).
Follow
Befriend (28)
171 threads
4,227 comments
Premium
The HOA fees go into the management companies' pockets and fuck all else. The trusts have to sue the management companies to get anything. When Realtor®s get their certificates yanked, they do two things - cook meth and start property management companies.
Follow
Befriend
40 threads
856 comments
Oakland, CA
Oakland is #6 in the top markets for house price appreciation
http://www.realtor.com/blogs/realtor-com-names-top-turnaround-towns-may-2012-data/
6. Oakland, CA is showing the vital signs of a turnaround based on Realtor.com’s first quarter 2012 data. With an unemployment rate of 8.7%, far below California’s 11.4%, Oakland’s economy is growing. In the first quarter of 2012, median list prices in Oakland are up 7.07% compared to the same time last year, and inventory is moving 46.43% faster during the same time period. These factors were enough to move Oakland into the sixth spot on the Realtor.com list of Top Turnaround Towns. Also, in January 2012 the New York Times ranked Oakland fifth on its list of 45 places to go in 2012. Today, Oakland’s market is a huge contrast to the -41.6% decline in median sale price it saw from first quarter of 2006 to the third quarter of 2010.
Major draws: From foodies to history buffs, Oakland offers something for everyone. Every January, the city hosts Restaurant Week where gourmets explore the exciting culinary scene. Jack London buffs can experience the call of the wild on the history walk named for the author, which leads to his favorite waterfront spots.
Follow
Befriend
6 threads
18 comments
Cupertino, CA
$500 in HOA dues is not worth it, no matter where it goes. Typically HOA fees go up not down. Here's an estimated calculation of what your friend is actually paying for his place with those kinds of dues.
Per year: $500 x 12 = $6000
Part of the HOA is yard work, repairs, maintenance, common area insurance, etc. Let's say that is $2000 a year if your friend bought a house and paid out of pocket for those.
$6000 - $2000 = $4000 is extra your friend is paying.
Mortgage interest at 4% , so if he borrows $10k he's paying $400 a year in interest.
4000/400 = 10
This means that if you buy a detached single house which costs 100k more than the condo, you pay almost same mortgage as the condo (mortgage + HOA).
The $500 a month is equivalent to an additional $100k estimate.