patrick.net

Thanks! Please keep us updated on how things go.

I feel your pain, I sold my house because the property taxes were nearing 4k, and I only make about 60k pre tax. I'm single, but for one, nothing is really all that affordable anymore, and I even live in the midwest. Instead I rent for a couple thousand more than that with all utilities included. Yes, I decided food was more important. Still, my wages stagnated, and I'm in my 40's, my best earning years are behind me, and I did not even have a decent job until I was 30 anyways. Go live with her folks, save lots of money. Hard to believe how much more everything cost than it did back in the 70's before we had our initial bout with inflation soon after going off the gold standard, I would say, get ready for the ride of your life but I can't tell the future.

varmint says

The last one I bid 22k (5%) over asking and weren't even selected as a backup.

this has been the normal for the past few months.

some of new constructions have a 1 year occupancy requirement meaning investors can't touch them. so that eliminates half of your competitions. it's best to ask them about this before make the offer.

Why would you buy a house with your girl friend? Isn't this something to do after you are married?

everything says

Go live with her folks, save lots of money.

No way, that's awful. I like her folks and all but I've been on my own since I left for college 15 years ago. Doubt they would want us there either.

If that is what people feel like they have to do, it's really sad. I'd like to own a house to have more space, be able to modify my living quarters as I want, have a yard I can do what I want in/to, etc. I'm willing to pay more (within reason) than rental prices to do it and take on the financial risk of the mortgage loan etc. Sacrifices past that are crap and make you wonder what kind system we're running here.

I'm sorry you are going through all this. But the fact is, you are trying to purchase a home in the midst of a very dysfunctional market. Between underwater values, artificially low interest rates, manipulated supply-side economics, Wall Street deciding to become landlords, foreign investors with more money than sense, and desperate realtors... things are pretty messed up to say the least. The question is... Is this temporary? It's hard to imagine that it could last forever.

Land in sfba is in short supply and lots of people want to live there, I mean, its so effing cool and all. It is what it is, there's zero chance of that, or any other highly demanded city for that matter, of having a return to reasonable prices. You pay a premium to own things that everyone else wants that can't be produced en masse.

My advice is either rent, or leave the area. This is a big country and a bigger planet, there's plenty of other opportunity to be had, without sacrificing a quality of life just to hold a mortgage while the bank holds the deed and the local government raises their protection fees into perpetuity.

Get over it and move on with your life

Get a house in Florida for 60k or 70k. Mint. Nice weather. You'll save so much money you can take flights to see the folks as often as you want.

In the east bay, I don't see prices dropping much for houses under 500K as rates are staying so low. By spring time, if rates are this low, year over year change will give buyers perceived buying power. Houses over 750K have peaked at this point. Houses over 1M might actually correct as people realize that higher taxes are here to stay.

This market sucks. I don't think what's going is right, but little good can happen to change what's going on. If something bad happens to drop the prices lower, then we are probably even in bigger trouble in economy.

In 2005 -2006 when I posting on here, I was pretty sure that the market would right itself. At this point my understanding of the "market" has changed. I am no longer sure that the market will do what's :right".

Great!

I'm glad you stepped up.

If it were me, and I wanted only two bedrooms, I would drive neighborhoods I want, and look for houses that looked like they have been lived in a good long while, like ten years.

Second I would look for six bicycles, or tricycles in the yard of that house. I would be looking for a couple who has out grown the current house, and may want to move up. Then I would knock on the door, or send them a letter.

You can also blanket a form letter to any house that looks like it might be worth taking a run at.

It's hard in a multiple offer situation to find anything, and I would recommend you wait out the hysteria, but it doesn't mean you can't look on your own.

Move up sellers may want flexibility, and you can offer that, as well as the incentive of the 6% commission that they will save.

I hear you, varmint. I grew up here and have 31 family members within a 30 minute radius here in the South Bay. I would really like to stick around to be close to all of them, and being avidly into the outdoors, the complete lack of weather here is a giant plus. Yet, the housing market is beyond dysfunctional at this point. Honestly, my outlook for RE in the SFBA is worse than it was in 2005. At least at that point there was hope of a crash. Now, our own government has mandated that housing shall remain expensive, that debt shall reign supreme and that fiscal prudence is for fools.

My wife and I are in the 96th income percentile (nationally) and there is literally nothing for sale that doesn't involve us putting all of our disposable income into it. Thanks, FHA, for doling out $730k loans to anyone with $25k in cash and a credit score of 580. Thanks, Fed, for fucking with treasuries so that Wall Street steams full-speed into equities and real estate.

Complaining is fun! But at the end of the day, you have to see that you can't fight the system. The best chance you have is to get a RE agent license, join the CAr and see if you can scoop a deal before it hits the "fair market." I am in the process of doing that myself.

I’m not sure if it still works (the rules of the game keep changing) but you may want to try contacting some of the smaller local banks in your area, see if they have any inventory that hasn't hit the market yet.

Better yet, if you have access to the ownership records. (In my area all of that is online) you can search for a specific bank, target a few homes they have in their backlog that may meet your needs, and fax offers direct (make the offer subject to satisfactory inspection of course).

dump the buyers agent, call listing agent the day of list and have them write it up. no need to outbid!

I appreciate the comments. A few thoughts:

errc says

My advice is either rent, or leave the area. This is a big country and a bigger planet, there's plenty of other opportunity to be had, without sacrificing a quality of life just to hold a mortgage while the bank holds the deed and the local government raises their protection fees into perpetuity.

I don't see why I should leave. I grew up in this area, my parents grew up in this area, and their parents as well. They are getting older and I don't want to not be around. Also this is one of the best areas to work in my industry. Other centers are in San Diego and New England. Not exactly bastions of affordability.

Maybe renting is the best course, but rents are escalating as well, at least they are much higher than when I last looked in 2006 or so. At least in 2006 one could easily see that buying was the suckers bet. Now it looks like buying may be feasible or at least not laughably worse.

Call it Crazy says

Another thought... she is your girlfriend, is marriage in the future? Trying to split a mortgage, title and deed can be a bitch in the future if it doesn't work out. How about kids??? Whatever you decide to buy, make sure you can carry it on one paycheck in case she gets pregnant.

Marriage is in the future, but the mortgage will on my check. We would prefer to use her income to fund other expenses, among them a future child.

PockyClipsNow says

dump the buyers agent, call listing agent the day of list and have them write it up. no need to outbid!

Tried to make a first day offer on the last house. The listing agent would not look at it, preferring to set an offer date and incite a bidding war. They got the best price for the client which is their job.

EastCoastBubbleBoy says

I’m not sure if it still works (the rules of the game keep changing) but you may want to try contacting some of the smaller local banks in your area, see if they have any inventory that hasn't hit the market yet.

Better yet, if you have access to the ownership records. (In my area all of that is online) you can search for a specific bank, target a few homes they have in their backlog that may meet your needs, and fax offers direct (make the offer subject to satisfactory inspection of course).

I'm not quite understanding what you mean. I have a listing of foreclosed homes that have not come to market. Should I be contacting the bank and see if they will work with me directly?

Seems like it would be a good plan. From what I have seen the banks waste money on lipsticking foreclosures before listing them. It's more trouble to undo the mess they created (windows painted shut, etc.) than to do the fixes right.

varmint says

I don't see why I should leave. I grew up in this area, my parents grew up in this area, and their parents as well. They are getting older and I don't want to not be around. Also this is one of the best areas to work in my industry. Other centers are in San Diego and New England. Not exactly bastions of affordability.

Based on your description, it sounds like a fairly simple situation of you not being able to afford to buy in your area. It doesn't really matter if your grandparents and parent could afford to buy. You can't, even though you might be more highly educated than your grandparents/parents and have a better job. It sucks and it's unfair, but there's nothing you can do about it.

San Diego County is, for the most part, significantly cheaper than the Bay Area. Take a weekend trip down there and compare an average house in San Diego with an average house in your area. Chances are the San Diego house will be a lot nicer, especially if it's a little inland.

varmint says

Marriage is in the future, but the mortgage will on my check. We would prefer to use her income to fund other expenses, among them a future child.

California is a community property state. Once you're married, your money is her money and vice versa. So the mortgage and kid expenses are on both of you, regardless of who pays.

varmint says

We would prefer to use her income to fund other expenses, among them a future child.

Are you absolutely sure that she will return to work after having said child?

turtledove says

you are trying to purchase a home in the midst of a very dysfunctional market

The East Bay area is a dysfunctional market. For that amount of money, would buy a really nice place on a decent piece of land in 98% of the United States. I purchased my house near Atlantic City for 400k in 2008 and it's 3200 sq ft finished, over 2000 sq ft unfinished on 2 1/2 acres of land built in 1991. It's only worth about 320k with the market slide, only slightly more then the outstanding mortgage. California is a market exception, most housing markets aren't like CA.

varmint says

Should I be contacting the bank and see if they will work with me directly?

Seems like it would be a good plan.

Might be the way to go, if you could cut out the middle man (the realtor's) a 6% sales commission on a 400k house is $24,000.

If you dont have kids and are dual income, what the heck are you whining about?

ducsingle5313 says

Based on your description, it sounds like a fairly simple situation of you not being able to afford to buy in your area. It doesn't really matter if your grandparents and parent could afford to buy. You can't, even though you might be more highly educated than your grandparents/parents and have a better job. It sucks and it's unfair, but there's nothing you can do about it.

He has a good point here, just because your family has always lived in the area doesn't give you any more rights than new comers to the area. Perhaps a compromise is in order. If want to live near your parents and they want to live near you, perhaps the parents can sell there house and you all move to an area you both can afford.