Where to buy in Bay Area, California?

[2HOTinPHX]

"Be sure to keep an open mind that $1.2m won't buy a lot in Silicon Valley. If you are willing to remodel, you might get a better deal" The Bay Area... "home of the million dollar fixer upper".........sorry that just sounds crazy.

I lived there most of my life and loved growing up there. Always lots to do and great weather.

I think you get conditioned to home prices in the area you live. When we started looking for a slightly larger home in the Bay Area in 2005 upgrading from a 2 bedroom 1 bath home to 3 bedroom 2 bath home it was going to be at least $600,000.........but that seems like a deal there now. My wife and I sold our house and relocated to Phoenix for the "half off home sale prices". It was just getting to crowded and expensive in the Bay Area.

Also something else to think about is property taxes...they are FOREVER!!! The house below shows $14,492.00 a year in property taxes...that's $1208.00 a month forever while working and in retirement....and we all know they will likely increase....

This one blows my mind:1691 Santa Lucia Dr, San Jose, CA 95125 | MLS #ML81520306 | Zillow[tracking]&utm_campaign=1702

From the ad for this $1,139,000.00 fixer upper....
House is located in a great community. But needs some work. Seller had plumber out a couple months ago. Major water leak. Sealed off water pipe. Plumber said both bathrooms need to be redone. House has to be repainted. Seller said water leaked when it rained in the bathroom. Roof looks OK but might need some repairs. Under neath kitchen sink major water damage, could be some mold issues. Had a lot of rats. Killed a lot of rats with poison. House smells a little. can't believe they actually posted that.

We still have family in the bay area and visit once a year or so. For us the old saying "nice place to visit but we wouldn't want to live there" fits pretty well these days...
Good luck with the home search. I know its really $$$$ to even rent in the Bay Area right now as we have two nephews who make really good money there but pay over $2000.00 a month rent for small apartments....I feel for them.

 

[photoguy]

Also something else to think about is property taxes...they are FOREVER!!! The house below shows $14,492.00 a year in property taxes...that's $1208.00 a month forever while working and in retirement....and we all know they will likely increase....

Actually that's not exactly true. During the downtown, the Santa Clara tax authority substantially reduced the assessed value our house for tax purposes. So our property bill went down significantly (the percentage decrease was inline with market value decline).

But on the upside, Prop13 limits tax increases to to 2% per year. So long time residents benefit tremendously. You have people in million dollar plus homes paying only $1 or $2k in yearly taxes. This capping of property tax is a great feature for early retirees.

 

[38Chevy454]

I have refrained from the discussion, lived in east bay area (Livermore) most recently 2002-2009. Kept my house there and finally sold it in 2013 when prices jumped a bunch and my good tenants had moved out. East bay is lower cost housing than south bay. South bay is crazy busy traffic and expensive housing. Not familiar enough with south bay specific communities to say what OP should do. I can only say for me that I am very happy to be out of CA, and SF Bay Area specifically. Even with the higher paying jobs in Silicon Valley, it seems very hard for a young family now.

One thing I have noticed though, people that grow up there and have the "conditioning" to the costs and politics have a different perspective about it. They just accept it and since they have not lived elsewhere, they are happy to stay. I think many could do better if they moved, but you have to be willing to make the move and uproot from the familiar.

Another observation was people generally have a very big portion of their retirement savings that is stuck in the house. Since the house costs so much, they do not have as much savings. When you spend all you have to just to put a roof over your head, it does not leave as much available for additional savings.

 

[M Paquette]

I grew up here, and except for a few years in Idaho (Navy... No, really!) I've always lived in the SF Bay Area. In that time, it's gone from affordable in spots to really, really expensive. As in million dollar fixer-upper expensive, even in what were considered suburbs at one time.

Some of the current peak can be blamed on the tech boom, but having lived through the boom/bust cycles here, I'll note that each time around, we see higher highs and higher lows in housing prices.

Someone looking for an 'affordable' place here is pretty much limited to:
* A tiny condo
* a serious fixer-upper in the outer suburbs, away from public transit like BART stations
* Competing for small quantities of 'affordable' housing San Francisco is requiring as part of new construction (This gets cutthroat...)
* Living in the exurbs with a 2 hour commute (each way)

(I'm not bashing. It really is that bad. Worse than NYC, and approaching Tokyo.)

In looking at moving to locations away from the urban core where I could afford to live, something like Christchurch, New Zealand looks pretty reasonable as long as I don't have to commute any more...


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[haha]

Another observation was people generally have a very big portion of their retirement savings that is stuck in the house. Since the house costs so much, they do not have as much savings. When you spend all you have to just to put a roof over your head, it does not leave as much available for additional savings.

One who works in SV and is a homeowner actually has two jobs, his or her actual work and the other job of speculating on the house potential cash-out price. Given the very high going- in prices, it will certainly be safer and may also have a better bottom line as well as lifestyle to find an upscale apartment complex very near to work, and if the family includes a child giving access to quality schools, and just plan to rent. In that case, a housing break will work for him or be neutral.

My long ago memory is that with trust deeds and California law, there is not going to be a deficiency judgment no matter how bad one's luck is in buying, but still it's nice to walk away clean if things go poorly. Somebody has to be able to pay rent in upper middle class developments, and Bay Area tech workers will never find themselves in Section 8. This is what I would do. Fund all the tax advantaged vehicles, get all the matches available, but don't speculate on house prices.

Nothing is forever, except of course the love of a good woman.

Ha

 

[wolf]

Parts of Sunnyvale, Santa Clara, Campbell, San Jose have single family houses within your budget. Depending on which part, the commute and schools are good to acceptable.

Be sure to keep an open mind that $1.2m won't buy a lot in Silicon Valley. If you are willing to remodel, you might get a better deal.

Redfin is one of my favorite real estate web site. Enter location like Santa Clara County. Then narrow search by adding Filters like property type, price. Zoom in to narrow location further.
https://www.redfin.com/

I also used real estate sites like Zillow, Realtor, Trulia

Find out what school district an address belongs to
https://www.sccassessor.org/

Map of school district
Boundary Maps

2013 API scores, can't find any more recent ones, maybe this is the most recent
API County List of Schools

> 900 excellent academic and usually highly competitive schools
> 800 good academic schools
> 700 ok academic schools
Probably don't want to consider below 700

Goo Luck

Agree. also, check out Northpoint. Cupertino. Will be years before you have to consider high school. Townhouse, and Condo are different.
well with in your budget. Good area.

Townhouse, usually have enclosed attached garage, and only one common wall with neighbor.

Condo, very similar to apt living.

 

[2HOTinPHX]

Actually that's not exactly true. During the downtown, the Santa Clara tax authority substantially reduced the assessed value our house for tax purposes. So our property bill went down significantly (the percentage decrease was inline with market value decline).

Sooooo... when do you expect the next big downturn in the Bay Area. Maybe the OP should wait to buy....

 

[daylatedollarshort]

One thing to keep in mind in picking out a neighborhood is to look at how the home prices fared in 2008. Some areas saw huge declines and others barely dropped in price. In general the outer suburbs got hit the hardest.

Or follow Ha's advice to rent. Even though rents are high, I would rather be out rent money than get laid off and be stuck with a $1M mortgage on a house now worth $500K, unless you pay cash for a house or have a big nest egg to get through the next job / housing bust.

 

[photoguy]

Sooooo... when do you expect the next big downturn in the Bay Area. Maybe the OP should wait to buy....

I have no clue. People are talking about bubble but I haven't looked at any valuation measures. But is renting until there is a decline a bad strategy?

The big benefit with prop 13 is that any year inflation is greater than 2% means a real decline in your prop tax. This is just awesome for long time homeowners.


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[explanade]

Had a realtor ring my bell the other day. Asked me if I knew of anyone interested in selling because inventory is low.

I just told him I'm not in the market, which is probably what he wanted to know.

I'm probably sitting on at least $500-600k in gains but if I sold, I would just raise my property tax base way up, unless I moved out of state. My place is a 1300-1400 sq. ft. townhouse and I see people buy homes which are palatial in comparison for under $500k in other parts of the country.

And rents around here are probably even worse. My mortgage is well under $1000 and no way I can find rents anywhere near that and the apts. would be tiny.

 

[Another Reader]

Well, it WOULD mean that, except every local government agency and school district has figured out how to pass fees and parcel taxes in the low turnout elections. The idea behind Prop 13 was that taxes would eventually decline to 1 percent of assessed value, as bonds were paid off and the hurdle to pass new bonds would prevent most from passing. My tax bill is now more like 1.6 percent of assessed value.

 

[haha]

I'm probably sitting on at least $500-600k in gains but if I sold, I would just raise my property tax base way up, unless I moved out of state. My place is a 1300-1400 sq. ft. townhouse and I see people buy homes which are palatial in comparison for under $500k in other parts of the country.

Yes, but that is other parts of the country, and for the most part these parts all suck relative to good parts of SF Bay, especially if one is a software/tech worker. Not only will his pay be better there, but his other opportunities are all around, and perhaps best, he is in a place where he will always be learning and improving his career. Last but not least, these so called palatial homes are generally ugly as sin, and everybody else has one too, so you get no points. Plus, you are either freezing or boiling too often.

And rents around here are probably even worse. My mortgage is well under $1000 and no way I can find rents anywhere near that and the apts. would be tiny.

Your situation is much different from a new entrant into the market, and for the most part unless you are soon planning to leave the area for good, you are much better off holding. Market timing with homes breaks up marriages, makes everybody mad, and usually does not work.

Ha

 

[daylatedollarshort]

Well, it WOULD mean that, except every local government agency and school district has figured out how to pass fees and parcel taxes in the low turnout elections. The idea behind Prop 13 was that taxes would eventually decline to 1 percent of assessed value, as bonds were paid off and the hurdle to pass new bonds would prevent most from passing. My tax bill is now more like 1.6 percent of assessed value.

Our property tax bill is .04 percent of market value these days. Prop 13 has worked out for us, but it does keep older homeowners like us from downsizing. If we moved to a lock and go condo and didn't like it, there is no going back to the kind of house we have now without paying a lot more in property taxes. So like many of our retired neighbors, we stay put and that lock in effect adds to the housing shortage.

 

[Brat]

DD lived on Maranta Ave in Sunnyvale. Although she sold before the kids started school she had no concerns about those that they would attend. Most homes in that area are split-levels typical of the 80s. Hard to say what a particular home would sell for today.

I just looked at Zillow. Her home sold for $1.8M April 2015. It is a pristine house but, Gulp!!

 

[Accidental Retiree]

Had a realtor ring my bell the other day. Asked me if I knew of anyone interested in selling because inventory is low.

I just told him I'm not in the market, which is probably what he wanted to know.

I'm probably sitting on at least $500-600k in gains but if I sold, I would just raise my property tax base way up, unless I moved out of state. My place is a 1300-1400 sq. ft. townhouse and I see people buy homes which are palatial in comparison for under $500k in other parts of the country.

And rents around here are probably even worse. My mortgage is well under $1000 and no way I can find rents anywhere near that and the apts. would be tiny.

Whether your property taxes would go up in CA would depend on where you now live and where you moved. There are 10 counties (last time I looked) that let you take your prop tax assessment with you. If you're interested, check out Props 60 and 90.


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[rodi]

Whether your property taxes would go up in CA would depend on where you now live and where you moved. There are 10 counties (last time I looked) that let you take your prop tax assessment with you. If you're interested, check out Props 60 and 90.


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That's if you're 55 or older and moving to a home of lesser value. It was specifically to address older folks not moving /downsizing because of the property tax hit. It does not address square footage - just closing sales prices of the sold and purchased homes.

When my stepmom sold her home 2 years ago the transaction had the buyer paying ALL of the closing costs - including the ones normally paid by the seller like realtor fees. This was to get the price low enough for the buyer to transfer the property tax rates under prop 90.

 

[Accidental Retiree]

That's if you're 55 or older and moving to a home of lesser value. It was specifically to address older folks not moving /downsizing because of the property tax hit. It does not address square footage - just closing sales prices of the sold and purchased homes.



When my stepmom sold her home 2 years ago the transaction had the buyer paying ALL of the closing costs - including the ones normally paid by the seller like realtor fees. This was to get the price low enough for the buyer to transfer the property tax rates under prop 90.

Yes, thanks for adding the age requirement and home purchase of lesser value. I didn't go into enough detail.


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[TallTim]

Back to the point and the OP's Q:

DW's more or less whole family live in the bay area at this point, and we used to (left after 8 yrs for LA, of all places (work move)) ... and we would go back now as RE to be close to family - if only we could find somewhere almost reasonable to live.

We lived in the East Bay (Pleasanton/Dublin), and it's a very kid-friendly area with good schools. It is probably 50-60 min to SF on BART, probably 60-75 min to SJ on CalTrain. If you need to get to SV proper, it's probably not a good fit. You can still buy almost reasonable housing in that area.

There is also the Piedmont/Montclair area right up the hill from Oakland. Nice houses and (*relatively*) reasonable prices, but commute only really works for OAK and SF, not SJ or SV and the schools are pretty atrocious at least after elementary.

Also you might consider areas further north like Lafayette or Walnut Creek or even Clayton depending on where you have to drive for work. If you can stay off the peninsula for work, then these may make sense, if not then IMO they do not.

As far as south bay, I would second the recommendation for Campbell and Willow Glen areas in San Jose, but be very careful about school district. Same in Mountain View - but there you will most certainly be confined to renting.

If you're open to a 40-50 min drive to SV from the south, could look in Santa Cruz. It's certainly cheaper and has a v specific vibe you'll want to check out before living there. if it's your cup of tea (college town, big surf community, beach city and a bit cut off by the coastal range from SJ/SF), then it may be a fit.

Bottom line, most in the Bay Area spend ~40-50% of their take home pay on housing and housing related (insurance, taxes) items. That's not necessarily a prescription to RE, but it is possible (we managed somehow).

Also highly recommend renting for a bit so you can get a real feel for a place and then buy if/when the next downturn comes. Buying in now is probably a little speculative IMHO.

 

[mpeirce]

As far as south bay, I would second the recommendation for Campbell and Willow Glen areas in San Jose, but be very careful about school district. Same in Mountain View - but there you will most certainly be confined to renting.

Also keep in mind that the high school district is different from the elementary/middle school district around there.

When we lived in West San Jose (next door to Campbell) we had the "Moreland School District" which was elementary and middle schools. They were OK, my step daughter went to Moreland MS and it was adequate. She did OK there, but in hindsight, not great.

The HS district scared us. So we opted for the one of the local Catholic high schools (Archbishop Mitty) which had an very good college prep program - and was quite welcoming for our jewish kid (funny story, her Dad was freaking out about "catholic school" until his rabbi mentioned that he sent his kids to a Catholic HS, green light after that).

Anyway, my point is that the districts get complicated. You need to know the details - if you care about the schools.

Also, most of our Rose Garden neighbors sent their kids to catholic school K-12...

 

[Another Reader]

0.04 or 0.4 percent? Mine are running about 0.65 percent of market value, including all he special assessments. I have owned the house almost 27 years. I have an inherited property with a 1975 base year transferred from another property that runs about 0.23 percent of market value, including all the add-on fees and special assessments.

I think that there are 8 or 9 counties left accepting Prop 90 base year transfers. San Diego is probably the most attractive of the lot.

 

[explanade]

0.04 or 0.4 percent? Mine are running about 0.65 percent of market value, including all he special assessments. I have owned the house almost 27 years. I have an inherited property with a 1975 base year transferred from another property that runs about 0.23 percent of market value, including all the add-on fees and special assessments.

I think that there are 8 or 9 counties left accepting Prop 90 base year transfers. San Diego is probably the most attractive of the lot.

Yeah I've played around with this idea, did some online browsing of properties there. There was also a long thread about SD areas and real estate.

Just haven't gotten down there to look around though.

 

[Accidental Retiree]

0.04 or 0.4 percent? Mine are running about 0.65 percent of market value, including all he special assessments. I have owned the house almost 27 years. I have an inherited property with a 1975 base year transferred from another property that runs about 0.23 percent of market value, including all the add-on fees and special assessments.



I think that there are 8 or 9 counties left accepting Prop 90 base year transfers. San Diego is probably the most attractive of the lot.

There are 10 counties as of 2014.


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[daylatedollarshort]

0.04 or 0.4 percent? Mine are running about 0.65 percent of market value, including all he special assessments. I have owned the house almost 27 years. I have an inherited property with a 1975 base year transferred from another property that runs about 0.23 percent of market value, including all the add-on fees and special assessments.

I think that there are 8 or 9 counties left accepting Prop 90 base year transfers. San Diego is probably the most attractive of the lot.

Sorry, I meant .4 percent.

 

[wingone]

If you're only thinking about kids now and they won't be of school age until several years down the road, I'm not sure buying into an expensive school area and suffering a poor commute is worthwhile. I would find a place closer to work, build some equity and deal with the school situation later

Evergreen is a fantastic school district with really great elementary and middle schools, comparable to the best schools in the State. But the commute up the valley is typically on 101 and to downtown that's 30 min and Sunnyvale it's 45-60 during commute hours. To suffer that on a daily basis on a premise that you might have kids will be tough for the longest time

Evergreen has some great and newer houses. If you look outside of the Silver Creek country homes, you'll find places that are less than 1.2 MM or close to that with access to those great schools. But I fear the commute and grind may wear you down

 

[mpeirce]

Evergreen is a fantastic school district with really great elementary and middle schools, comparable to the best schools in the State.

Comparable to other public schools in the state. See, that's a problem given that it's California. Just saying...