4 ms·

I'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF). However, I keep thinki

by spike021 10mo ago

I'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF). However, I keep thinking about how someone I know was laid off last year only two months after buying their first home. I'm a SWE making OK money here but not FAANG/unicorn-level, so it's tough to imagine buying and then being on the hook for a mortgage without a job even with some savings.

klysm 10mo ago
You could probably afford some really nice property not in the bay area then.
- TuringNYC 10mo ago
  >> You could probably afford some really nice property not in the bay area then. Sure, but doesn't really help if the job is in the Bay Area.
- spike021 10mo ago
  My job is no longer remote and I do enjoy my neighborhood.
OptionOfT 10mo ago
I was laid off 35 days after closing. Absolute hell. Now, thankfully we didn't over-extend, and live by the at-least-6-months-of-savings. We made it through, but just writing this down makes my heart rate spike.
- spike021 10mo ago
  exactly what I'm afraid of! Glad to hear you made it through.
harmmonica 10mo ago
I hate to repeat this old adage, but in case it helps to see it here: if you've been wanting to buy something, and you see yourself staying in the area and the place itself for many years, and you have some savings buffer if things go south, then buy. Don't do it because you want to magically have paper equity gains in the next 12 months. Do it because you like the place you're looking at, the neighborhood it's in, and because you have enough funds in place to get through a downturn if a layoff happened. Of course I say all of that and it's good to know what could happen if a terrible downturn does happen like in 2008 (even the nicest Bay Area hoods prices dropped 25%+). Last thing, single family houses, especially in the Bay Area, are typically more insulated from price drops (insulated not immune). If you can afford a small single family then it might be worth it, especially if there's expansion potential (either for yourself or the next buyer if you decide to move on). And even better if there are some cosmetic problems that are tractable because let's say you do get laid off there's nothing like building some sweat equity in the downtime. Just my two cents having gone through similar in the past.
- deadbabe 10mo ago
  So what you’re saying is, if you want a condo, just wait, because a price drop soon means your money will go a lot further. If you want a SFH, buy now, price drop will be small.
  - harmmonica 10mo ago
    Not quite what I was saying, but now that you've put that so succinctly, if it were me, knowing the Bay Area and what's happening in tech/AI at the moment, I would hold off on the condo. The single family with some grit I'd probably say have at it assuming the most important part of what I said holds true: it's not for equity upside, it's because you want to own that place, and in that location because that's where you will be happy living. If someone reads this thread once there's been another 2008-level reckoning in 2026 I'm not surprised the reckoning occurred.
- kakacik 10mo ago
  FOMO is a powerful emotion, but like all emotions its a bad idea to make it a primary decision maker for any important matters. Reading all this from distant Europe, its interesting (and logical) how in US the swings in prices are so extreme in both directions. In fact, most things in any regard are way more extreme in US compared to Europe. May be good for the lucky ones but long term stability or dependability this ain't.
  - harmmonica 10mo ago
    If you're taking what I said as FOMO I didn't intend it that way. The opposite in fact unless your sentiment is that anyone who wants to buy and live in property in the US is solely doing so because of FOMO. If you're saying that then that's a tautology and so how can I argue with it? But if that's not what you meant then there are few things we as people can do for "stability and dependability" that better accomplish those goals than owning property that you actually want to live in. Most importantly it puts a permanent roof over your head, which we all need in some way, shape or form to survive (no exaggeration there I don't think). And it makes the cost of that necessity predictable, especially in California where property taxes are almost perfectly-predictable. It pretty much de-risks the largest expense most people will have in their lifetimes. That's not to say that you don't lose something in the proposition, but calling that FOMO seems inaccurate.
aprilthird2021 10mo ago
I waited till I had the whole sale price in cash then bought, it's reduced my layoff anxiety 1000% and I'm sure it's not the savviest financial choice, but I'm happy with the security of knowing I can stay here for a long time no matter what
- DontchaKnowit 10mo ago
  Most people will never be able accomplish this because home prices increase so much. And meanwhile you have to live somewhere, and all the rent money is money you dont get to save or put towards home equity
  - aprilthird2021 10mo ago
    Maybe so, but I just have always been averse to debt and mortgage for exactly this kind of scenario
- LikeBeans 10mo ago
  It depends on the appreciation and in turn the property taxes. I own my house outright. Completely paid off. But the increases in property taxes is forcing us to sell and move, likely in the next 5 years. Too bad, love the neighborhood and the area.
  - aprilthird2021 10mo ago
    I don't understand. The increase in property tax is forcing you to sell? How much percent is the property tax? Alternatively won't you make a windfall in the sale (I assume property tax only go up when the value goes up)
    - jdhwosnhw 10mo ago
      In most places in the US (california being a notable exception) taxes are reassessed regularly based on market conditions. In some areas this can result in the property taxes rising to an appreciable fraction of the mortgage rate - or in the GPs case, what the mortgage would have been, if they hadnt paid it off already.
ramesh31 10mo ago
>it's tough to imagine buying and then being on the hook for a mortgage without a job even with some savings Key thing to remember here is that you always have to live somewhere, even if you're laid off. Unless you're ready to head out to BFE to save a few hundred bucks on rent, it doesn't get much better than owning in that situation. Plus you could potentially have equity to tap, get a hardship forbearance, or worst case scenario foreclosures take much longer than evictions. This was the lesson COVID era taught me; if you're losing your home it's considered a tragedy, and there are tons of resources to help you. But if you're being evicted from an apartment it's considered a personal moral failure, and you're treated like a criminal.
- oxag3n 10mo ago
  Not true. Down payment can support rent for years and years in HCOL, while owning is more expensive and lacks that cushion.
  - tomjakubowski 10mo ago
    Owning is only more expensive than renting if depreciation + interest + maintenance exceeds rent. And in most US cities, depreciation is negative in the long run. Lots of advantages to owning and having a mortgage too: deduct mortgage interest from taxes, use equity as a line of credit, you can actually make substantial changes to your living space, and so on.
    - oxag3n 10mo ago
      That was in the context of loosing a job - rent vs. mortgage makes a difference in a span of few years when unable to find similar paying job.
balderdash 10mo ago
its not easy to do, but being able to afford a year+ of mortgage payments and living expenses is pretty important to your peace of mind.
- spike021 10mo ago
  I think if I found the right place I could maybe do 6+ months expenses. Still cuts it real close for me.
tt2q345 10mo ago
}}}} I'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF). Posting this anon. At our last office, executives purposefully encouraged home ownership because it made people desperate, risk-avoiding, and easier to control.
- phendrenad2 10mo ago
  How do executives encourage home ownership? Slip a little zillow ad into the all-hands?
  - davey48016 10mo ago
    Every boss I've ever had has slipped a little life advice into our one on ones.
    - spike021 10mo ago
      my last boss said i needed more work-life balance because i would take my dog on a walk once during the workday. as in, i wasn't giving work enough of my time.
      - davey48016 10mo ago
        I've gotten everything from unsolicited relationship advice to unsolicited nutrition advice. Some of it was actually pretty good advice.

klysm 10mo ago

You could probably afford some really nice property not in the bay area then.

TuringNYC 10mo ago
>> You could probably afford some really nice property not in the bay area then. Sure, but doesn't really help if the job is in the Bay Area.
spike021 10mo ago
My job is no longer remote and I do enjoy my neighborhood.

OptionOfT 10mo ago

I was laid off 35 days after closing. Absolute hell. Now, thankfully we didn't over-extend, and live by the at-least-6-months-of-savings. We made it through, but just writing this down makes my heart rate spike.

spike021 10mo ago
exactly what I'm afraid of! Glad to hear you made it through.

harmmonica 10mo ago

I hate to repeat this old adage, but in case it helps to see it here: if you've been wanting to buy something, and you see yourself staying in the area and the place itself for many years, and you have some savings buffer if things go south, then buy. Don't do it because you want to magically have paper equity gains in the next 12 months. Do it because you like the place you're looking at, the neighborhood it's in, and because you have enough funds in place to get through a downturn if a layoff happened. Of course I say all of that and it's good to know what could happen if a terrible downturn does happen like in 2008 (even the nicest Bay Area hoods prices dropped 25%+). Last thing, single family houses, especially in the Bay Area, are typically more insulated from price drops (insulated not immune). If you can afford a small single family then it might be worth it, especially if there's expansion potential (either for yourself or the next buyer if you decide to move on). And even better if there are some cosmetic problems that are tractable because let's say you do get laid off there's nothing like building some sweat equity in the downtime. Just my two cents having gone through similar in the past.

deadbabe 10mo ago
So what you’re saying is, if you want a condo, just wait, because a price drop soon means your money will go a lot further. If you want a SFH, buy now, price drop will be small.
- harmmonica 10mo ago
  Not quite what I was saying, but now that you've put that so succinctly, if it were me, knowing the Bay Area and what's happening in tech/AI at the moment, I would hold off on the condo. The single family with some grit I'd probably say have at it assuming the most important part of what I said holds true: it's not for equity upside, it's because you want to own that place, and in that location because that's where you will be happy living. If someone reads this thread once there's been another 2008-level reckoning in 2026 I'm not surprised the reckoning occurred.
kakacik 10mo ago
FOMO is a powerful emotion, but like all emotions its a bad idea to make it a primary decision maker for any important matters. Reading all this from distant Europe, its interesting (and logical) how in US the swings in prices are so extreme in both directions. In fact, most things in any regard are way more extreme in US compared to Europe. May be good for the lucky ones but long term stability or dependability this ain't.
- harmmonica 10mo ago
  If you're taking what I said as FOMO I didn't intend it that way. The opposite in fact unless your sentiment is that anyone who wants to buy and live in property in the US is solely doing so because of FOMO. If you're saying that then that's a tautology and so how can I argue with it? But if that's not what you meant then there are few things we as people can do for "stability and dependability" that better accomplish those goals than owning property that you actually want to live in. Most importantly it puts a permanent roof over your head, which we all need in some way, shape or form to survive (no exaggeration there I don't think). And it makes the cost of that necessity predictable, especially in California where property taxes are almost perfectly-predictable. It pretty much de-risks the largest expense most people will have in their lifetimes. That's not to say that you don't lose something in the proposition, but calling that FOMO seems inaccurate.

aprilthird2021 10mo ago

I waited till I had the whole sale price in cash then bought, it's reduced my layoff anxiety 1000% and I'm sure it's not the savviest financial choice, but I'm happy with the security of knowing I can stay here for a long time no matter what

DontchaKnowit 10mo ago
Most people will never be able accomplish this because home prices increase so much. And meanwhile you have to live somewhere, and all the rent money is money you dont get to save or put towards home equity
- aprilthird2021 10mo ago
  Maybe so, but I just have always been averse to debt and mortgage for exactly this kind of scenario
LikeBeans 10mo ago
It depends on the appreciation and in turn the property taxes. I own my house outright. Completely paid off. But the increases in property taxes is forcing us to sell and move, likely in the next 5 years. Too bad, love the neighborhood and the area.
- aprilthird2021 10mo ago
  I don't understand. The increase in property tax is forcing you to sell? How much percent is the property tax? Alternatively won't you make a windfall in the sale (I assume property tax only go up when the value goes up)
  - jdhwosnhw 10mo ago
    In most places in the US (california being a notable exception) taxes are reassessed regularly based on market conditions. In some areas this can result in the property taxes rising to an appreciable fraction of the mortgage rate - or in the GPs case, what the mortgage would have been, if they hadnt paid it off already.

ramesh31 10mo ago

>it's tough to imagine buying and then being on the hook for a mortgage without a job even with some savings Key thing to remember here is that you always have to live somewhere, even if you're laid off. Unless you're ready to head out to BFE to save a few hundred bucks on rent, it doesn't get much better than owning in that situation. Plus you could potentially have equity to tap, get a hardship forbearance, or worst case scenario foreclosures take much longer than evictions. This was the lesson COVID era taught me; if you're losing your home it's considered a tragedy, and there are tons of resources to help you. But if you're being evicted from an apartment it's considered a personal moral failure, and you're treated like a criminal.

oxag3n 10mo ago
Not true. Down payment can support rent for years and years in HCOL, while owning is more expensive and lacks that cushion.
- tomjakubowski 10mo ago
  Owning is only more expensive than renting if depreciation + interest + maintenance exceeds rent. And in most US cities, depreciation is negative in the long run. Lots of advantages to owning and having a mortgage too: deduct mortgage interest from taxes, use equity as a line of credit, you can actually make substantial changes to your living space, and so on.
  - oxag3n 10mo ago
    That was in the context of loosing a job - rent vs. mortgage makes a difference in a span of few years when unable to find similar paying job.

balderdash 10mo ago

its not easy to do, but being able to afford a year+ of mortgage payments and living expenses is pretty important to your peace of mind.

spike021 10mo ago
I think if I found the right place I could maybe do 6+ months expenses. Still cuts it real close for me.

tt2q345 10mo ago

}}}} I'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF). Posting this anon. At our last office, executives purposefully encouraged home ownership because it made people desperate, risk-avoiding, and easier to control.

phendrenad2 10mo ago
How do executives encourage home ownership? Slip a little zillow ad into the all-hands?
- davey48016 10mo ago
  Every boss I've ever had has slipped a little life advice into our one on ones.
  - spike021 10mo ago
    my last boss said i needed more work-life balance because i would take my dog on a walk once during the workday. as in, i wasn't giving work enough of my time.
    - davey48016 10mo ago
      I've gotten everything from unsolicited relationship advice to unsolicited nutrition advice. Some of it was actually pretty good advice.