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It depends on your goals. If you plan to live here forever, then you should buy, no question. If you plan to stay for just a few years, the taxes, transaction f
by pdx6 12y ago
It depends on your goals. If you plan to live here forever, then you should buy, no question. If you plan to stay for just a few years, the taxes, transaction fees, and closing costs will eat you alive.
Now a better question is if you plan to stay 7 years or more, which is the "normal" amount of time people stay before moving on to a larger home from their starter home. Real Estate markets have about an 8 year cycle, so this fits well for this model of buying.
Also keep in mind are the taxes. In San Francisco, there is a special assessment if you sell a house worth more than 850k or so, and it steps up the more your house sells for (but there is a rebate if you get solar panels, hint hint). California takes 12.7% of your profit, which nearly kiss the $250k/$500k Fed tax exemption for living in a property for 3 out of 5 years.
- ChrisAntaki 12y agoWell said. If one's plan is to stay in SF long term, and they can afford a house they're happy with, they should go for it.
- klochner 12y agoPerhaps well said, but presented without evidence or even any attempt at a persuasive argument. It's not at all clear to me that one should buy a house in SF at this point in time regardless of one's expectations for staying. It's a crazy market. Do you want to go all-in on up to 500% of your net worth given the market is quite obviously not in equilibrium? The odds are against you getting some great deal here, and there's a very good chance you'll lose several (5-10?) years of accumulated earnings. Leverage goes both ways </rant>
- eclipxe 12y agoFirst it is 2 years for the exemption and CA has the same 250k/500k exemption rule as federal. Not sure where you're getting your data?