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Tyler D.
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Help me understand the Bay Area/ SF

Tyler D.
Posted Nov 26 2020, 14:47

I work in SF, and have rented as I am wary of the seemingly unsustainable prices. I would like to buy a house (to owner-occupy) if it makes sense, but I can't get a clear picture of whether or not it makes sense to buy here. Often, I hear one of two extremes:

The Pro-Bay Area extreme:

"The bay area has always been expensive. I could barely afford to buy my house when I bought it, and I couldn't afford to buy it now. Get in while you can."  

Problem: Extreme appreciation can't continue into purpetuity. Eventually, you'll hit a point where everyone is priced out. Seems a lot like 2000s era stock investors saying that the market can only go up.

The Anti-Bay Area extreme:

"$1.5m for a house? How can anyone afford to live there? I paid $100k for my house here in Ohio. There are homeless everywhere and poop on the streets. I don't care if I could get paid 2x the salary there, it's just too expensive."

Problem: Ignores factors such as high salaries that lead to higher prices. Brushes aside the career opportunities and massive amount of money in the area.

I'm looking for a more sober middle-ground, or perhaps a more convincing explanation for either of the extremes if they happen to be true. Personally, I would like to believe that home prices will continue to go up, but I haven't heard an argument convincing enough that I would bet $1.5million on it. Experienced bay area investors/ residents, let me know your thoughts on this complex topic!

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