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Adam Kuszczak
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Is Bay Area market crazier than normal?

Adam Kuszczak
Posted Apr 5 2021, 21:48

New to the forum, but not a total newbie. I wanted to hear people's opinion about housing market around Bay. 

I've been looking into Brentwood, CA which seems to be last area with house prices that make some sense. 

Math:

- 4 bed, ~2000 sq ft, ~5000+ sq ft lot, good schools 6+, 1990+

- 630-670k asking price

- property tax 1.3-1.6%, mortgage 3.2%

- after running some numbers, it gives me 3.3k-3.6k per month to own (mortgage, insurance, property tax, sometimes HOA, not counting utilities and maintenance)

- rents in the area are closer to 3k tho, but everything goes within a week or two, so I bet if you are patient, you could rent it with cashflow (saw couple houses that went on Zillow for rent 3d after closing and were rented out with cashflow after 7d)

So there is this upper limit of ~700k above which owning costs are way higher than avg rent (for same reason locations inside Bay do not make sense, I think). The case would be to buy to live in, and I know you should not mix investment with home to live in, but still, knowing that you can move somewhere else and rent this one out without loosing too much money is much more compelling. So then you can stick to 30y fixed and treat it as free money as some Youtubers say:D

However, there seems to be like 10 buyers per house, making it very competitive and final sales going for 30-100k above asking price (especially when it seems a trend to artificially lower asking price to get more people into the race).

I've only been looking at this since beginning of March and real estate agents told me that this crazy thing is going on for over a year and it is just getting worse, that you had to bid more and more, essentially driving prices up and up. 

I do realize this is worse scenario to buy RE if you even remotely think about it as investment but I want to stop paying someone's else mortgage:D

What are others thoughts about that market? Was it always that crazy? Would you stay away and buy 5 SFH with cashflow in other states?

Adam 

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