Did you miss the window? With all the articles in the SF Chronicle recently about “Homes Sales Jump to 6-Year High”, has the Buyer’s train in Berkeley/Oakland already left the station? The answer is NO...not if you’re buying a house for the right reasons.
The "right reasons" are these:
- You’re buying a Berkeley/Oakland house to live in as a long-term investment. By long term, we mean 3-4 years or more … not the 1-year and refi from the go-go days. Once we arrive at an equilibrium point of prices in the East Bay, which we are probably approaching, houses will still likely appreciate -- albeit at 2-3% per year, not the 10% we’ve seen the last six months. Still, over time, that’s a great investment. With 20% down, that works out to a 10-15% annual return on your cash, which is better than most stocks.
- An East Bay house is an investment you can enjoy. You can live in a house. You can’t live in a stock portfolio.
- A Berkeley/Oakland house you live in gives you a sense of security. It’s like putting down roots from which you can grow. You’re in control of your own destiny, rather than the whim of a landlord. You can make a house your own.
That said, buying a house is not for everybody. Again, it’s long-term commitment. If you can’t commit to at least 3-4 years, don’t bother. If your credit is in still in the tank or if you’re just surfacing after a foreclosure or short sale, wait until you’re really on stable footing again. And, most importantly, if you can’t afford the mortgage and keeping up the East Bay house on your present income, wait until you can. Don’t speculate on the house going up in value in order to afford it. That’s what got us into trouble the last time.
All in all, the Bay Area is a great place to buy a house. Unlike Texas or Nevada, we have a finite supply of houses in our area and more people moving in than out. The laws of supply and demand will usually be on our side.
So you haven’t missed the boat. Interest rates are as low as they’ll ever be. Prices are still lower than in 2007. It’s the Bay Area! It’s still a great time to buy a house!
For a consultation on luxury homes in the East Bay, feel free to call me in my office: 510-847-2409.
Originally posted on my Elmwood Homes real estate blog here: http://elmwood-home.com/late-buy-house/.