Mike and I have been talking a lot lately about buying a house. With prices going up the way they are in the bay area if we don't buy now, and they keep going up like this, before too long we won't be able to afford one. Plus with prices going up the way they are it could be a really good investment even if we are just here a few years, if the prices keep going up.
Last week I started to notice how every thought I had about buying a house included the same phrase "if prices keep going up the way they have been." Of course we are hearing rumors of a bubble, that coupled with my own feeling of a frenzied push to buy a house before I can't afford one stopped me and told me there is something really wrong with this picture.
Mike and I make good money, we are both engineers. The median family income in Walnut Creek is $83,303 which we are well above, and the average home price is $497,111. How many people with that income can afford that house? I would think not many. If Mike and I are going to be priced out of the market just because we just moved here, what will happen to the young people growing up here? If this area continues to go this way eventually people will stop moving here or will move away.
When realtors start to say things like this, like one did on a message board I go to sometimes. I think it makes even more sense that we not buy. It's in her best interst to keep the frenzy going so I would not expect her to do anything but try and push people towards overextending themselves and buying. But she is just proving my point about how soon no one will be in a position to buy a house that doesn't already own one.
. . . I'm a Realtor in the Los Altos area and I thought I'd share some of the prevailing thoughts within the RE community . . .I do not think the bubble will burst for the greater SF Bay Area. . .In 2003 and 2004, we had approx. 20% appreciation annually in the Bay Area w/ some areas having even strong appreciation. . .So far, it looks like 2005 will experience a similar appreciation rate. If that is true, by waiting many people will price themselves out of the market unless their money is earning 20% interest somewhere (if so, tell me where! LOL). I absolutely understand everyone's concern's and disbelieve. I know how hard it is on buyers but the ones who can just get into something are the ones who will be in a stronger position a year from now, 3 years from now and even more.
Any market that is going to price out everyone who does not already own a home to me just sounds like trouble. No one will be able to afford to buy a house anymore. Since Mike and I are not sure we are going to be here for the long term, and the only thing we could afford right now and still have any kind of life (and by that I mean not eating rice and beans, and being able to see our families for the holidays) would be a tiny condo. What kind of place is this that two engineers with good salaries can't even afford a small starter home? And if we are thinking like this, so are other people. Eventually the buying will end, it has to, and people like us will start leaving. Let's see where your market goes then!