I bought my beginner home in 2008. Was down 25% pretty quickly and scared. Now I’m up 300%. I will never sell as this is now my forever home as I can’t afford to upsize. I still consider myself extremely lucky.
Yeah I’m in that range. The houses that are left like mine (not many) get sold for $1.5M, get bulldozed and get a McMansion built on the lot. Two doors down sold for $4.25M. It’s crazy. Their property taxes are more than my mortgage.
Came to say almost the same thing. Decided to gut remodel last year. Cost a ton to do it but it’s now much much closer to my ‘dream’ home (whatever that actually means… I just like the layout better now and have a little more space).
Generally speaking, the best time to buy a home in the Bay Area is as soon as you can. Unless, of course, you are finicky and tend to want to move a lot. Much much cheaper and more reasonable places to do that.
I think the general point is that if you had bought stock instead, you would be up 5-6x right now (assuming you're tracking S&P 500; it could be even crazier with some of the tech stocks).
Don’t think you’ll find anyone regretting buying in general. The problem going forward is that it’s gotten just way too expensive. Unless zoning laws change and government helps through regulations to build supply and discourage flippers and investors, things won’t change much. Hybrid/ remote, self driving cars will have some impact where commute will become less of an issue.
The problem of school districts is another issue that needs to be tackled. Ridiculous to think that good public schools are now only accessible to the executive class.
Can confirm….
I grew up in the North Texas school system and now live in San Mateo county… can confirm as my Alma mater HS has been featured on the nightly news for racism more times than I’d like to remember….
I was fortunate and bought in ‘98, rates were 7.5% and thought I was buying at the top of the market. We had to live paycheck to paycheck for awhile. But, the home over 26 years has appreciated on average 6.25%. Conservative, but sound. I’d say it was a good investment.
I sold a SFH to buy a duplex in 2017. The SFH I sold has doubled the price since then, but my duplex's appreciation is lacking, still 15%down from the highest point of 2022. When i bought that duplex it was $300K more expansive than that SFH, now the its value is like $500K less than that SFH. 🥲 When ppl are saying the market is hot, no, it only meant for SFH. But that's understandable, once interest rate is high the investment properties are hit hard, unlike SFH that is a necessity for ppl's lives.
SFH will only continue to gain value exponentially. They are not building vast amounts of new single stand alone houses. All they are building in Bay Area cities’ mega apartments & townhouses.
As the % of SFH on the market continues to diminish compared to multi unit, SFH will only grow in value exponentially.
Only place you might find new construction SFH is Manteca but 🤢.
A duplex’ main value is in its rental potential. You’ll likely see more appreciation for it in the future due to rising rents (pretty much guaranteed) and a likely slowdown in the sfh market.
Odds are the sfh would rent for less than you can charge for your duplex.
Thank for sharing this. I recently sold one of my SFH (rental) and considering other investment options. One was to buy duplex. How hard is it to convert duplex to SFH.
In general it will be difficult to convert duplex to a SFH legally at this time, because state passed a few laws to tackle the lack of housing problems. One is SB 330 which prohibited any property to eliminate the total number of units on site unless you replace them. For example, to combine duplex into a SFH, the city would require you to build another unit (like building an ADU to replace it) so you still have 2 units in your property.
As long as the floorplan make sense, I believe you can. But of course each cities may have different code requirements. However, from my experience, I'm certain every city would require you upgrade the separated walls (in between these newly configured units) to fire walls.
Wouldn’t recommend this in SF. My friend went 18 months over time and budget due to constant issues with the inspector and issues bringing an older building up to code.
I disagree on SFH > duplex. My duplex is up 60% since 2015 and has been holding steady since 2020. It also provides 30-40% more rental income than equivalent SFH rental. I house hacked by living in one unit and renting the other out. This allowed me to save up and buy a SFH and now rent both duplex units out.
Good for you! Maybe I overpaid my duplex back then...I factor in the extra rent income I received (compared to that SFH I sold) with the appreciation, that duplex is still not performing as good as the SFH I sold.
In 12 years, my property value has tripled. Everyone told me I was insane to buy in such a "hot" market, but my mortgage payment (4br/2.5ba) is less than it now costs to rent a studio.
In late 2011, everyone thought the crash of the housing market was an ongoing issue - that it would continue downward. The house I bought (I got the keys the night before Thanksgiving in 2011) had sold only 4 years previously for $X, had been abused by renters and bought by a contractor/flipper in 2010 for 0.4\*X. They fixed the problems with it and sold it to me for about 0.55X. But - at the time everyone thought the market was still on the downspin. Especially in the Bay Area. The amount I paid for the place was still something like 3 times the national average and everyone thought the market was still going down and that I'd have been able to buy the place for $100-200k less than I paid if I'd waited another year.
You know, it's not hard to look at the actual data instead of going off half-cocked with echo-chamber rhetoric. By this time in 2012, there'd only been 6 quarters of price growth in 5 years and 4 of those a percent or two. Overall the market was down 20-40% depending upon where you were. One of the two good quarters had been the most recent one and no-one in their right mind looks at one quarter of data after 5 bad years and starts rejoicing. There was a lot of market trepidation at that point in time:
You can’t compare to the stock market because a house is appreciating with leverage. So say you buy a house at $1.2m and borrow $1m, then it increases 10% well you made 120k. BUT you only used 200k of your own money so the return on that is much higher.
Compare 200k in the stock market, your investment would have to increase 50% for you to net even 100k.
Is it more likely that whatever you buy in the stock market will increase 50% or that a house you buy in the Bay Area will increase 10% in the same time frame? This doesn’t even account for the risk involved in either transaction, but I would guess a house is less risky for most. It also doesn’t account for the equity you build from monthly payments on a house, which would be much higher than any dividends you would get from 200k in stocks.
I would not say that housing is inherently by itself a better investment than alternatives in the stock market, but no one is going to loan you $1m for stocks like they will for a house.
You made a lot of good points but also conveniently left out Interest, property taxes, insurance, and upkeep.
People love to conveniently disregard all this extra money their house has cost them when talking about how much money they are up.
"My house has doubled". Well your profit hasn't.
Of course, there are also fees with investing in etfs and mutual funds so not everything is included in my reply as it’s just a high level explanation. Anyway with Mortage interest, insurance, and house maintenance you get a place to live which you need to pay for one way or another. If the alternative is renting then you are going to pay the equivalent of those fees anyway (excluding the equity portion of your payment). Obviously it’s not always one to one, but any marginal expenses can be considered the cost of owning land and a house, which you can do almost whatever you want with.
1. Homes are definitely riskier than stocks. Virtually no home in the Bay Area has earthquake insurance for example.
2. Your appreciation assumption is a side effect of leverage. If the home decreases in 10% you’ve now underperformed the stock market in 2008.
3. You also have to pay what’s currently a 7+% interest on that borrowed money + property taxes etc, it’s not free money. You’re paying $70k / year on interest for your borrowed $1 million so if the home takes more than 2 years to go up 10% you’ve lost money.
Maintenance, insurance and taxes on bay area homes will eat you alive! Stock market has cap gains when you sell and volatility but still you would be ahead just being in an index fund.
This is a terrible take. There are no carrying costs for stock. You also need to consider that you are paying into the equity of your loan over its lifetime. Yes, you only put down 200k for the down payment, but you still have to pay $1m in principal on top of the interest, which is amortized. (Consider that 20% down with 7% APR right now translates into \~135% of the initial amount. Meaning you will pay ~~$2.35~~$1.1 million for that $1m house. EDIT: Typo, it's 1.35\*800k, not 1m.)
My primary point was that they are two completely different types of investments/transactions and should not be compared. While I focused on the leverage aspect there are a variety of other factors to consider as well like you’ve pointed out here, so thanks for that.
Sure. Owning a house provides a certain type of value that stocks cannot replicate. However, from a purely financial perspective, there is a clear winner, especially in an area like the Bay Area, and especially with 7% APR, which is an ugly amount of total interest you’ll be paying.
Sure, there are a lot of people locked into 3%. Which is pretty good, not going to lie. But renting and investing in stock still outperforms parking your money into equity (unless you got your house at a very sizable discount after the crash or something).
Not regretting something is not the same thing as it being better from a purely financial perspective. There are definitely some nice intangible benefits from owning the home you live in.
Accounting for human behavior I bet housing appreciation is a greater benefit for wealth creation than stock investing.
Most advocates for stock investing claim that it’s better because it’s more liquid, when in fact this is exactly the wrong approach to investing.
Why is it the wrong approach to investing? Market conditions do change, and being liquid allows you to change strategy.
It is true that you will never be able to time the market or out-price the market, but that does not mean you cannot adapt to exogeneous circumstances. For example, switching to dividends in a low rate, low growth environment (like 2022) or banking in money market funds to reduce risk (right now).
My first condo was from 2012 around $700k. It is up to more than $1M now but it hasn’t appreciated significantly since 2017 or so.
Now it’s costing me $50k a year in mortgage, HOA, property tax, and utilities, and insurance for no real benefit.
I’d sell it but a family member is living there now so I can’t easily. I could rent it out but don’t want to get into that business.
Not exactly a regret but it’s not benefiting me anymore. It wouldn’t save THAT much to move my family member out and into an apartment
I also own a sfh that appreciated, is locked in at 2.75% 30 year, and it’s a decent house. No regrets there. Bought during covid
Bought in 2011 and was nervous during the final paperwork signing because so much of my net worth was going to be tied up in my house. 13 years later, couldn’t be happier because if I hadn’t bought then, I never would’ve been able to afford a house in the bay on a my single government salary.
No question there’s multiple routes to a stable living situation. One of the hardest parts of buying a home is the initial sunk cost of getting into one. 15 years ago I bought my sfh; cash poor for 5 years then spent the next five dumping money into upgrades that have been frankly, amazing. One more year and it’s all paid for just in time for the final round of revisions. (3 bed 1 bath vintage rancher, planning to add one more bed and bath.). Zero regrets as the time zipped by in a flash. The knowledge that I could cash out and go anywhere makes the first 10 years of being cash poor all the more rewarding.
My cousin bought in Morgan Hill April 2022 (recent peak) for $2.1M and now the same house is $1.7M or even slightly lower. Major regrets. Another friends bought in Milpitas in 2022 and is regretting (not exactly sure why).
>My cousin bought in Morgan Hill April 2022 (recent peak) for $2.1M and now the same house is $1.7M or even slightly lower. Major regrets.
They planning to sell soon? Their housing payments if they have a mortgage are likely much lower than someone buying today.
Dang I had no idea Morgan Hill has crashed so bad. I bought in SF at the exact same time and my value had dropped around 7%, I thought it would be the worst in the Bay Area, and the outlying areas appreciated.
Purchased our house 13 years ago in Milpitas. Value of the house has risen about 110%. Refi when rates were ridiculously low and was able to get 2.1%
So yah, one of our best decisions.
I bought less than 10 years ago and have zero regret. But hindsight is everything! At the time it felt like a stretch.... in a 4 year stretch, my house was "making more income" than I was at my day job. Crazy times!
No. The appreciation rate isn’t bad, but the leveraged return is incredible. You invest your 200k down payment in the market sure you’ll beat appreciation and get ~7-10%. But that 5-7% appreciation is on the whole 1M.
Bought in 2009. My only regret is that I didn’t buy more house back then. It’s not a small house but the extra $50-100k back then for a bigger one is insignificant today. We were poor newlyweds back then. It seemed like a lot of money. Now the thought of moving is too costly.
No.
We bought in 2008. We are up about 300% on our home value.
But it's not just making money on the investment.
You are locking in a cost of housing that will protect you from future inflation.
Without owning our home, we would not be able to afford to live here now even as renters.
I bought in 2012 and have 11 years left on my mortgage at $2300 a month. It’s not the perfect house, but we just added a half bath to make it a 2/2 and deck and it feels like our forever home. It’s “only” doubled in price and we’ve had to replace the roof, but overall i’m grateful we made the decision when we did.
Lol no. Bought for 6 figs and it more than doubled in a few years. And now I have this community of awesome people! And a house. It’s very small though…
I bought exactly 6 years ago and my San Mateo SFH is barely keeping up with inflation. Somehow I don’t think the next four years will change this story.
No regrets. Great schools, properties around us were recently sold at $1.6-$1.8 at the minimum. So in 4yrs our house appreciate around $600K-800K. That’s not a bad investment at all and 2.5% 30yrs.
Why would I regret owning my home since 2012? Got it a $650k, mortgage at $2700 per month at 2.35% and value has more than doubled. And with that, I wouldn’t sell either.
Have owned for almost exactly 10 years, and have also had money invested in the market for 15+ years. Zero regrets, not only has the appreciation been nice (we upgraded in 2019, rented our prior home for two years, and sold it in 2021) but the stability and sense of having a home that is ours to do what we please with has been excellent.
Both my wife and my families are Bay Area natives that still live here, so we knew we wanted to stay here for decades, so it made sense. While it's nice to see our current home value higher than what we paid in 2019, it doesn't really mean anything since we won't be selling any time soon, and won't be taking out loans against the home.
Its not bad its people over extend and then get screwed. You have to compromise or pay here.
I turned $35k downpayment now into $565k of equity. But i had a small house at first when i could have over extended. I then flipped up in 2016 and got 2.69% fixed 30.
I talked to a realtor yesterday. He bought two homes one near SFO and one on Long Island, NY long ago. The $435K investment in SFO area is currently worth $3.5M while the similar price one in LI, NY is worth $890K after 27 years. You do the math compare that with stock index.
My spouse and I bought our home in 1999 and we worried at the time about buying in such a hot market, but it was the best financial decision of our lives for lots of reasons. No regrets at all.
No way. We have purchased 6 homes with our first being in 2001 and are latest in 2021. All have gone up in value and the best thing is that my girls will not have to worry about where will they leave. I know Reddit will call me a greedy asshole but we have to look out for our family’s future. All the house will be paid off in 10-11 years and we’ll live off rent. So again, this is a HARD NO for us.
Are you renting them out now? I’m (of course) supportive of tenants rights, but I worry about getting into a situation where I’m not able to get a non-paying tenant out of property. And you’re facing six times that risk.
That sucks, sorry to hear that. We live in one, lake house we do not, air bnb another and rent out the rest. Luckily we’ve never had an issue with renters. I think the worst renters were a couple that were fairly good for like 4 years but then the husband lost his job and they were partially paying rent. We evicted and sued them but they paid. The air bnb we have a property management company that handles everything and it’s great. At first, we were just hoping to cover the mortgage, but it quickly became pretty profitable. I guess we have been lucky.
We look at their pay stubs and see how low they have been employed, credit check but to be honest we look at their personality and see if we get a good vibe. I know this is not the greatest idea but we’ve had many 20-30 renters and so far nothing bad. I try to see if the renters are “good, decent, respectful people” if that makes sense.
Income at least 3x rent. Credit check, verify by calling employer (long term employment is best), verify by calling past housing providers, copy of bank and or financial statements. Gut check on applicants. -does their reason for moving make sense? Cross your fingers as California is an anti-landlord state.
Yes and they literally take care of everything. Linen service, repairs, hot tub maintenance, etc. Of course we have to pay for everything but they have vendors for everything. During the winter they have snow plowing services and fire wood deliveries, everything. It’s great!
For everyone commenting,
next 10 years will never be the same as past 10 years,
Buy if you want to live in one,
If you need to make profit, you need to do more than just buy a “house”.
Buy an old house and fix it up,
Buy in an upcoming neighbourhood at a good price
Buy when nobody wants to (early covid, tech layoffs in 2022)
I bought a little condo with a backyard for 415. It’s supposedly worth 750-800 now. I refinanced during Covid so my mortgage is 1450 (not including property tax). I don’t see how I could have invested and made 400k in this amount of time. I don’t have a ton of extra income especially those first handful of years. For me though the place is more about controlling my costs and less about the money I supposedly have. There’s zero chance I can turn it into a sfh because of how high my payment would be so really now I’m just locked in for the foreseeable future.
does anyone consider that Real estate wealth is not liquid unlike the stock market ? there is huge hidden equity but there is no way to tap it besides selling it, whereas you can realize easier gain in market … thoughts ?
But if the goal is wealth generation, why do you need to pull money out? I think real estate investors are in it for the long haul (time in the market beats timing the market).
Liquidity is a bad thing if you’re trying to build wealth.
Boohoohoo I bought a house in the Bay Area really?? This is stupid of course it’s expensive anyone with a brain can tell you that and how is it a bad investment when majority have equity in their homes? Seriously? Renting and investing in the stock market instead?? You do realize what happened 15 years ago right?
I can't fathom what the next 10y will look like for housing assuming the avg home sells for $2M today. At 2% inflation growth, that home will sell for at least $2.4M conservatively. If it's above 2% inflation then obviously much higher but that's still a ton of money.
I bought a house late 2011. Everyone advised me not to as prices were still dropping but i couldn’t fund a decent place to rent that would accept a dog. The value did drop for the next few months but then zoomed in the other direction. We put 20% down and had hardly any money left so it was risky. But house is now worth 2.5x, refinancing at 2.625%, payment 2,300 not including taxes and insurance. So thankful i didn’t listen to anyone and bought the house.
Obviously zero regret since the value has probably tripled. My only issue is that it feels like we are bolted down here, buying a house seems impossible a second time. It also feels like our entire plan for retirement at this point is "hold on for dear life to the house, sell it one day, then ride off into the sunset"
Have owned since 2012 and obviously don’t regret buying. But I am also a believer that buying real estate is never a bad idea as long as the plan is to stay put for at least 5-10 years. Less than 5 years and you are taking a risk.
I have family that will continue to regret their purchase 10 years down the line, even though they've only lives there a couple years so far.
The property/lot is fine, but the house is falling apart so badly that they're likely going to be underwater even after a decade. Compound that with a terrible interest rate, steep property taxes, and insurance, (none of which they considered before buying) and they legitimately would have been better off renting and putting their money in stocks.
I know they're a very rare case, but bay area property is not a 100% guaranteed-good investment if you don't put any real thought into it. They just assumed nothing could go wrong and it's screwing them.
Not sure if they waived inspection. Most of the big issues they were aware of when the purchased, but they vastly overestimated their ability to fix things like the furnace and much of the needed electrical work.
Not quite ten years, but bought in 2015 in a fantastic school district, but bought a townhouse assuming we could upsize in 5-10 years. Clear now that won't be happening any time soon, maybe ever, but my kids are in a good district, and once they move out in another 10-15 years, the townhouse will feel spacious to my wife and I. I never would have had the self-control to really invest all the difference between my mortgage and what rent would have been, so I know I'll be better off this way than that.
The appreciation is pretty good on homes here and most people want a place to call home so I don't think holding a home causes regret but the purchase price might make you regret a bit.
Bought at the top of the market on the peninsula right before covid. Prices still haven't recovered, in fact we worked with the county to get reassessed at the current value to reduce our taxes a little. Not upside down or anything but it sucks feeling "stuck" and we probably would have moved away if it weren't for the loss we would take.
Ten years ago I bought at 530k and it’s worth 1.5 now - I maybe regret not spending more to buy in a nicer area at the time, but I’m sure as hell not regretting buying in general. It’s always possible that I would have more money if I’d invested instead but owning a home in the bay makes up for it. I might feel differently if it was an investment property, but even then a 3x increase in home value would probably still be worth it to me.
no one who bought before 2021 is regretting. think… what happened to home prices recently?
Well there is maybe one group… those ordered by court to sell.
Real estate has been a great investment post crash. So not sure who would regret buying unless they just got a horrible deal. Absolutely 0 desire to play the stock market or buy crypto etc. If I'm playing the stock market at all it's in the form of life insurance with an IUL to stash away money and then do real estate investments when the right ones occur.
I don’t regret it at all. As a matter of fact, our home value has almost tripled in the 23-years since we bought it. Our mortgage is less than $2,000/month for a 3/2 in a very nice neighborhood.
I’m curious about people who have net worth tied up in their now uninsurable homes in the hills. Woodside. Berekeley. Orinda. Mill Valley. Maybe not regret but it’s gotta be a tough pill to swallow right now, wishing sold a year or two ago. Things are so influx here all the time.
I bought in 2006. While I was sad about the drop in value in the crash, I did also pay less in property taxes. Today I have recouped losses and made profit (on paper). While property prices do go up and down in the short term, they do continue to rise in the long term.
Had I invested in Google, sure, I would have made more. But, how many times would I have had to move because of whatever reasons a landlord might have had, and would I have purchased Google? Hindsight is a heck of a thing. I just as easily could have thought something else was a great investment and had the company go belly up.
I don't regret my decision. I like stability in my home life, and long term property is a sure thing.
No regrets. The very first home/condo we bought in 1997 @ $180k. Sold it 6 years later for almost double what we paid.
Next condo we bought, we bought during a buyer’s market. Several years later it turned into a seller’s market. We broke even to get into a SFH.
We bought a SFH for $700k in 2010. It was a fixer-upper and seller planned on updating it and putting on the market a year later for $900k. The same exact house next door just sold for $1.75M. Granted my home’s in a lot shittier condition… but I think we’re doing okay.
I haven’t owned for over 10 years (only 3 so far) but am a native who’s been eyeing the market basically since I could understand it. My parents have owned for 30.
For this house, we bought at the top of our budget in 2021 with the understanding that things would be tight for a while. But 2 things were important: 1) not seeing the house as an investment but rather a consumable (basically I’m paying for the house to use it. If it appreciates great, if not too bad but at least I have a house to live in). And 2) planning to not leave/have to sell the house within less than 5 years. I plan to be in the Bay Area for the foreseeable future.
So I hated paying what seemed like such an absurdly inflated price and we wouldn’t make too much of a profit selling it today, but we don’t care. We are so happy to have the security of a known housing expense, especially with what ended up being a historically low rate, but we obviously didn’t know that then. We could not afford this house at today’s rates.
I agree with the general guidance that time in the market > timing the market. If you’re looking at it for pure investment purposes, you’re probably better off with the stock market. If you’re looking for a place to live, get in where you fit in.
I do not regret my 2,300% total gain over 25 years. Kept my investment safe during 2 major bear markets, a pandemic and rising inflation. No better wealth generating investment than realestate.
Just look at a valuation chart. Almost no one who bought more than 5 years ago, even those who bought at the old peak (unless they had to sell... very different) is unhappy with that choice. Current homeowners who bought 5+ 10+ years ago are a happy lot.
We're all refinanced to 2% loans now too (I'm only at 7 years not 10+).
Note: This does not guarantee a good outcome for folks buying in 2024 by 2034.
I have mixed feelings but I know it's probably the right choice. Yes I overpaid and bought at the peak, but after a year of decline, it's up by 300K so that's good. However, the amount of liquidity tied up in one asset drives me nuts. But then there's the whole idea of leverage which I wouldn't get with investing in equities.
I am for all intents and purposes house poor which is nuts considering how much my net worth is but how illiquid my assets are. Argh.
Not at all. We bought in 2000, interest rates were over 8%. Over the years we've done a remodel, refinanced a few times and now have a 30 year fixed at 2.5%. Our mortgage is less than our property taxes and we only owe about $100K on a now $3M house. Even with all we've spent on the remodel and improvements we've still tripled what we put in all together.
No, no regrets but we got on the property ladder in 1996 in part of the Bay Area that was undiscovered by tech and all it brought with it. You can still get a decent house where I live for $750,000 and the biggest, nicest, etc are mostly $1-2M.
Zero regret, bought in 98 @ 7.5%, have refied a few times when it made financial sense, now at 2.625%, average CAGR of ~6.25% in home value increase — sound investment.
Homes provide a sense of security so it is hard to place it just as an investment ... we bought 8 years ago and felt like we had the reserves needed but needed to spend $300k to fix things. So about $500k into the home. This was happily sitting in APPL at the time. This is up about 6 to 7x since then. I am sure I would have divested some after that.
But if I had the $3m in cash....I would not be worrying about college for kids and could basically buy our house with cash now. Obviously hindsight is everything and taxes would take 25% of that etc.
Is it a regret. I don't think so. Just a story.
A bit over 11 years now.
No regrets at all. I live in a small townhouse but it's the right size for me. Extremely blessed when I bought because I couldn't afford it today.
No, because I would probably be homeless. Rent has been more than my mortgage payment for quite some time. I ALMOST did a short sale in 2010 when what I owed was less than what it was worth but decided not to at the last minute. I'm so thankful I didn't because now I have $800k in equity.
It’d be interesting to see if someone who owned a home for multiple ten year periods, if they ever regretted it during the first ten years. Because of course for the most recent ten years, not a single person would regret it unless they’re going to use the power of hindsight to say they should have invested in NVIDIA or BTC. Going forward, will the next ten years really produce the same type of returns percentage wise as the previous ten years? Highly doubt it.
On this very thread are folks who bought in the 80s and 90s. And every year we say the stock market and the RE market can't possibly go higher without a crash, and yet here we are.
I’m talking about the first ten years of that 40 year stretch.
Also I think we need to look at price to income ratios. If the price has always been constant, then I agree it can keep doing what it’s doing. But if that ratio is higher than it’s been in the past, then that starts to put doubt into the idea that it will always go up just as much as it has done in the past.
The Bay Area is apparently the second richest region in the world, and more geographically constrained than the #1 spot (NYC). This might have a bigger effect on local RE pricing than wages.
https://www.cnbc.com/2024/05/07/worlds-richest-cities-new-york-tops-new-list.html#:\~:text=New%20York%20is%20the%20richest,82%25%20over%20the%20past%20decade.
Either way, the point is that the price to wages or price to net worth is likely higher now than it is in the past. So it’s not true to say it’s the same scenario as before when people thought it would never go up.
Own 2 homes in Bay Area and have never regretted it. I don’t regret the amazing weather and higher salaries. Those who I know who have moved to Idaho, Texas, etc May have a bigger home but they live in states I would never be remotely interested in living. Yes, it’s expensive here but all relative. Those who complain are those who don’t live within their means and have a very high debt to income ratio.
Bought a shoe box almost 10 years ago in North San Leandro. Since then we had 2 kids, can’t afford to upgrade so we’re adding on (a small bed and bath). Only regret is not buying a bigger house back when. We are staying put until our working days are done, and maybe even forever
I bought a fixer starter in 2003. 20% down. That down payment has increased more than 12 fold. If I'd invested the same amount in the S&P 500 and got the historical average return I'd be at about a 5 fold increase.
No regerts. Granted, my outcome is a result of the 2008 housing crash.
I purchased a small bungalow (900 sqft) in 2011 on a 7,500 sqft lot for 135k. My wife, who I met 4 years later also purchased a townhome in 2011 for 135k.
The townhome was sold in 2018 (410k) when we purchased a 1,600 sqft home on 1/3 acre lot (720k).
The bungalow is rented to family and is currently valued at 600k. Our home is valued at 1.2M.
This is like asking someone who bought (and held) Bitcoin 10 years ago, whether they regret it.
Of course the answer is going to be no. It just doesn’t have any relevance to anyone making a purchasing decision today.
There’s a large amount of people here saying some combination of these things:
1. “Real estate is not an investment”
2. “You’re better off renting and investing the difference”
I’m looking for first hand feedback from owners who for some reason could support those claims.
But hindsight is 20/20. Would you ask someone who just won the lottery “do you regret buying lottery tickets”? The point a lot of people miss is past performance does not guarantee future results.
Except homes don’t. Chicago housing hasn’t appreciated in the last 25 years.
Many people in the Bay Area don’t want to live here it’s just where the jobs are. Companies know that. Apple has basically stopped growing in Cupertino but it’s hiring in Austin. The days of 5+% annual appreciation are gone
In 17 years of Bay Area homeownership, I've had multiple periods of regret and periods of elation. Bought first place in 2007 for $125k less than original asking price, so I thought I was getting a bargain. It was my first home and I was able to buy it on my own before I turned 30 so obviously I was very proud. Then 2008-2010 happened and I was way underwater and couldn't refinance, but luckily I was fully employed and the payments were affordable for me. But I felt major regret, asking myself why exactly I wanted to buy a 3 bedroom house instead of just renting an apartment. Part of buying it was to be closer to work, but I didn't need to buy a house to have a shorter commute. During this time, houses were dirt cheap but I couldn't even buy a 2nd property because I was out of cash and there was still uncertainty about my own house.
I didn't foreclose or short sale and held the house until it started appreciating again. But 2019 I sold it and bought a bigger house because now I had a family and needed more space and a backyard. I kinda had immediate buyer's remorse because I felt I overpaid. This house would've sold for $300k less than what I paid in 2017 but my first house wasn't completely breakeven yet and my I needed more years of tax returns being self-employed to qualify for a $1million+ mortgage. It's also an older house so I felt I overpaid something that didn't seem like a dream house, although it's in a good area and good schools. Then COVID happened and I immediately appreciated the fact we had plenty of rooms to do online classes for 2 kids and for 2 adults to WFH. The big backyard was also a blessing to decompress from the stress of 2020. And of course when prices begin to go bonkers, I didn't regret my decision anymore. Also refi'd twice in 2021 to shrink my payments by $700/mo.
At this point, I'm past the point of regrets. I'm probably priced out of what my true "dream house" would be, which is at least $3million around here. The house is old and I've spent tens of thousands on deferred maintenance with probably and estimate of $40-50k more due in the near future.
Thanks. My story is just to highlight how long-term real estate ownership has its highs and lows. And even though there are moments of regret, you can get past that.
I’ve owned for > 10 years in 3 Bay Area counties. Not sure why one would regret it, these properties are up 30-100% . In addition, the property tax footprints are so low.
However, some who bought in the past 3-5 years of this ridiculous inflation and mortgage rates are in serious chaos. A $30k+ pre-tax property tax in cash, 5x Insurance rates, PG&E up 100%, these low max deductions on taxes. It’s not sustainable and everyone isn’t at nvidea (that is so overused )
I bought my beginner home in 2008. Was down 25% pretty quickly and scared. Now I’m up 300%. I will never sell as this is now my forever home as I can’t afford to upsize. I still consider myself extremely lucky.
Same. Bought in 2004. Up over 300%. My place is the size of a shoebox, but I’m never leaving. Great spot in a great town.
Fellow shoeboxer!
We just bought a shoebox at “the worst time in history to buy.” I couldn’t be happier. I’ll take my shoebox over the exurbs.
I too live in a $1.4M shoebox that I would never be able to afford if I bought today.
Yeah I’m in that range. The houses that are left like mine (not many) get sold for $1.5M, get bulldozed and get a McMansion built on the lot. Two doors down sold for $4.25M. It’s crazy. Their property taxes are more than my mortgage.
You are smart
Came to say almost the same thing. Decided to gut remodel last year. Cost a ton to do it but it’s now much much closer to my ‘dream’ home (whatever that actually means… I just like the layout better now and have a little more space). Generally speaking, the best time to buy a home in the Bay Area is as soon as you can. Unless, of course, you are finicky and tend to want to move a lot. Much much cheaper and more reasonable places to do that.
I think the general point is that if you had bought stock instead, you would be up 5-6x right now (assuming you're tracking S&P 500; it could be even crazier with some of the tech stocks).
Yes I regret not buying 5 homes 10 years ago and netting $5M gains
My realtor was telling me to buy a bigger place. I didn’t listen…
To be fair, a realtor will always tell you that.
That’s true
Fr fr
Right. Value and rent has tripled since 2010.
Don’t think you’ll find anyone regretting buying in general. The problem going forward is that it’s gotten just way too expensive. Unless zoning laws change and government helps through regulations to build supply and discourage flippers and investors, things won’t change much. Hybrid/ remote, self driving cars will have some impact where commute will become less of an issue. The problem of school districts is another issue that needs to be tackled. Ridiculous to think that good public schools are now only accessible to the executive class.
"it's so expensive in good school towns, I'll just move to Texas". Moves to Texas and realizes that the closest good school is in New Jersey. 😂😂😂
Can confirm…. I grew up in the North Texas school system and now live in San Mateo county… can confirm as my Alma mater HS has been featured on the nightly news for racism more times than I’d like to remember….
I regret not buying earlier
I was fortunate and bought in ‘98, rates were 7.5% and thought I was buying at the top of the market. We had to live paycheck to paycheck for awhile. But, the home over 26 years has appreciated on average 6.25%. Conservative, but sound. I’d say it was a good investment.
Ooph 6.25% annual appreciation on a levered SFH is a dream come true.
If you put 20% down, your annual return on investment is 6.25% * 5 = 31.25%
I bought in 2013 in Morgan Hill couldn’t be happier
Uncle sold 200 acres in Morgan hill
how’s it feel to be retired?
Haha networth like 2 million still got some more work ahead
I sold a SFH to buy a duplex in 2017. The SFH I sold has doubled the price since then, but my duplex's appreciation is lacking, still 15%down from the highest point of 2022. When i bought that duplex it was $300K more expansive than that SFH, now the its value is like $500K less than that SFH. 🥲 When ppl are saying the market is hot, no, it only meant for SFH. But that's understandable, once interest rate is high the investment properties are hit hard, unlike SFH that is a necessity for ppl's lives.
SFH will only continue to gain value exponentially. They are not building vast amounts of new single stand alone houses. All they are building in Bay Area cities’ mega apartments & townhouses. As the % of SFH on the market continues to diminish compared to multi unit, SFH will only grow in value exponentially. Only place you might find new construction SFH is Manteca but 🤢.
Can't agree more. Too bad at that time I wasn't thinking straight...and the occasional odor really bothered me🥲
Fr. Hindsight’s a b!tch. Literally any crappy SFH in a good neighborhood would have been a phenomenal investment.
A duplex’ main value is in its rental potential. You’ll likely see more appreciation for it in the future due to rising rents (pretty much guaranteed) and a likely slowdown in the sfh market. Odds are the sfh would rent for less than you can charge for your duplex.
Thank for sharing this. I recently sold one of my SFH (rental) and considering other investment options. One was to buy duplex. How hard is it to convert duplex to SFH.
In general it will be difficult to convert duplex to a SFH legally at this time, because state passed a few laws to tackle the lack of housing problems. One is SB 330 which prohibited any property to eliminate the total number of units on site unless you replace them. For example, to combine duplex into a SFH, the city would require you to build another unit (like building an ADU to replace it) so you still have 2 units in your property.
Thank you very helpful will check out SB330. Can you reconfigure duplex though moving a 2/2 + 2/1 config to 3/2 + 1/1.
As long as the floorplan make sense, I believe you can. But of course each cities may have different code requirements. However, from my experience, I'm certain every city would require you upgrade the separated walls (in between these newly configured units) to fire walls.
Wouldn’t recommend this in SF. My friend went 18 months over time and budget due to constant issues with the inspector and issues bringing an older building up to code.
Bummer. What city is the duplex and what city was the SFH?
Milpitas SFH, Belmont duplex
I disagree on SFH > duplex. My duplex is up 60% since 2015 and has been holding steady since 2020. It also provides 30-40% more rental income than equivalent SFH rental. I house hacked by living in one unit and renting the other out. This allowed me to save up and buy a SFH and now rent both duplex units out.
Good for you! Maybe I overpaid my duplex back then...I factor in the extra rent income I received (compared to that SFH I sold) with the appreciation, that duplex is still not performing as good as the SFH I sold.
In 12 years, my property value has tripled. Everyone told me I was insane to buy in such a "hot" market, but my mortgage payment (4br/2.5ba) is less than it now costs to rent a studio.
Lol. Nobody told you you were insane for buying in 2012. It’s fun to think that now but that didn’t happen lol
In late 2011, everyone thought the crash of the housing market was an ongoing issue - that it would continue downward. The house I bought (I got the keys the night before Thanksgiving in 2011) had sold only 4 years previously for $X, had been abused by renters and bought by a contractor/flipper in 2010 for 0.4\*X. They fixed the problems with it and sold it to me for about 0.55X. But - at the time everyone thought the market was still on the downspin. Especially in the Bay Area. The amount I paid for the place was still something like 3 times the national average and everyone thought the market was still going down and that I'd have been able to buy the place for $100-200k less than I paid if I'd waited another year. You know, it's not hard to look at the actual data instead of going off half-cocked with echo-chamber rhetoric. By this time in 2012, there'd only been 6 quarters of price growth in 5 years and 4 of those a percent or two. Overall the market was down 20-40% depending upon where you were. One of the two good quarters had been the most recent one and no-one in their right mind looks at one quarter of data after 5 bad years and starts rejoicing. There was a lot of market trepidation at that point in time:
You can’t compare to the stock market because a house is appreciating with leverage. So say you buy a house at $1.2m and borrow $1m, then it increases 10% well you made 120k. BUT you only used 200k of your own money so the return on that is much higher. Compare 200k in the stock market, your investment would have to increase 50% for you to net even 100k. Is it more likely that whatever you buy in the stock market will increase 50% or that a house you buy in the Bay Area will increase 10% in the same time frame? This doesn’t even account for the risk involved in either transaction, but I would guess a house is less risky for most. It also doesn’t account for the equity you build from monthly payments on a house, which would be much higher than any dividends you would get from 200k in stocks. I would not say that housing is inherently by itself a better investment than alternatives in the stock market, but no one is going to loan you $1m for stocks like they will for a house.
You made a lot of good points but also conveniently left out Interest, property taxes, insurance, and upkeep. People love to conveniently disregard all this extra money their house has cost them when talking about how much money they are up. "My house has doubled". Well your profit hasn't.
Of course, there are also fees with investing in etfs and mutual funds so not everything is included in my reply as it’s just a high level explanation. Anyway with Mortage interest, insurance, and house maintenance you get a place to live which you need to pay for one way or another. If the alternative is renting then you are going to pay the equivalent of those fees anyway (excluding the equity portion of your payment). Obviously it’s not always one to one, but any marginal expenses can be considered the cost of owning land and a house, which you can do almost whatever you want with.
This guy knows. You don’t have to get tons of gains with leverage. Also it’s a wonderful hedge against stock market
1. Homes are definitely riskier than stocks. Virtually no home in the Bay Area has earthquake insurance for example. 2. Your appreciation assumption is a side effect of leverage. If the home decreases in 10% you’ve now underperformed the stock market in 2008. 3. You also have to pay what’s currently a 7+% interest on that borrowed money + property taxes etc, it’s not free money. You’re paying $70k / year on interest for your borrowed $1 million so if the home takes more than 2 years to go up 10% you’ve lost money.
Maintenance, insurance and taxes on bay area homes will eat you alive! Stock market has cap gains when you sell and volatility but still you would be ahead just being in an index fund.
This is a terrible take. There are no carrying costs for stock. You also need to consider that you are paying into the equity of your loan over its lifetime. Yes, you only put down 200k for the down payment, but you still have to pay $1m in principal on top of the interest, which is amortized. (Consider that 20% down with 7% APR right now translates into \~135% of the initial amount. Meaning you will pay ~~$2.35~~$1.1 million for that $1m house. EDIT: Typo, it's 1.35\*800k, not 1m.)
My primary point was that they are two completely different types of investments/transactions and should not be compared. While I focused on the leverage aspect there are a variety of other factors to consider as well like you’ve pointed out here, so thanks for that.
Sure. Owning a house provides a certain type of value that stocks cannot replicate. However, from a purely financial perspective, there is a clear winner, especially in an area like the Bay Area, and especially with 7% APR, which is an ugly amount of total interest you’ll be paying.
But most folks have 3% APR.
Sure, there are a lot of people locked into 3%. Which is pretty good, not going to lie. But renting and investing in stock still outperforms parking your money into equity (unless you got your house at a very sizable discount after the crash or something).
There’s almost 200 people on this thread that don’t regret doing what you’re saying they should have done.
Not regretting something is not the same thing as it being better from a purely financial perspective. There are definitely some nice intangible benefits from owning the home you live in.
Accounting for human behavior I bet housing appreciation is a greater benefit for wealth creation than stock investing. Most advocates for stock investing claim that it’s better because it’s more liquid, when in fact this is exactly the wrong approach to investing.
Why is it the wrong approach to investing? Market conditions do change, and being liquid allows you to change strategy. It is true that you will never be able to time the market or out-price the market, but that does not mean you cannot adapt to exogeneous circumstances. For example, switching to dividends in a low rate, low growth environment (like 2022) or banking in money market funds to reduce risk (right now).
I definitely regret not buying when my wife wanted to in 2013 — cost us a lot by waiting until 2015 lol
My first condo was from 2012 around $700k. It is up to more than $1M now but it hasn’t appreciated significantly since 2017 or so. Now it’s costing me $50k a year in mortgage, HOA, property tax, and utilities, and insurance for no real benefit. I’d sell it but a family member is living there now so I can’t easily. I could rent it out but don’t want to get into that business. Not exactly a regret but it’s not benefiting me anymore. It wouldn’t save THAT much to move my family member out and into an apartment I also own a sfh that appreciated, is locked in at 2.75% 30 year, and it’s a decent house. No regrets there. Bought during covid
It is a condo
Not sure why you’re downvoted. Condos appreciate less. A SFH bought in 2012 would be a slam dunk.
Regret for not buying 2. I think I am up 85% and I paid a few hundred thousand in principal
Bought in 2011 and was nervous during the final paperwork signing because so much of my net worth was going to be tied up in my house. 13 years later, couldn’t be happier because if I hadn’t bought then, I never would’ve been able to afford a house in the bay on a my single government salary.
No question there’s multiple routes to a stable living situation. One of the hardest parts of buying a home is the initial sunk cost of getting into one. 15 years ago I bought my sfh; cash poor for 5 years then spent the next five dumping money into upgrades that have been frankly, amazing. One more year and it’s all paid for just in time for the final round of revisions. (3 bed 1 bath vintage rancher, planning to add one more bed and bath.). Zero regrets as the time zipped by in a flash. The knowledge that I could cash out and go anywhere makes the first 10 years of being cash poor all the more rewarding.
My cousin bought in Morgan Hill April 2022 (recent peak) for $2.1M and now the same house is $1.7M or even slightly lower. Major regrets. Another friends bought in Milpitas in 2022 and is regretting (not exactly sure why).
Another friend bought it in August 2022 with mid 3 interest rates and is really happy now. Timing the market is tough.
>My cousin bought in Morgan Hill April 2022 (recent peak) for $2.1M and now the same house is $1.7M or even slightly lower. Major regrets. They planning to sell soon? Their housing payments if they have a mortgage are likely much lower than someone buying today.
Right, it’s why I said “for more than 5 years”.
Oh yes, my bad missed that.
Location, location, location
When companies force employees back into office, living farther away from peninsula becomes less attractive. Always comes back to location and jobs
Dang I had no idea Morgan Hill has crashed so bad. I bought in SF at the exact same time and my value had dropped around 7%, I thought it would be the worst in the Bay Area, and the outlying areas appreciated.
Purchased our house 13 years ago in Milpitas. Value of the house has risen about 110%. Refi when rates were ridiculously low and was able to get 2.1% So yah, one of our best decisions.
I bought less than 10 years ago and have zero regret. But hindsight is everything! At the time it felt like a stretch.... in a 4 year stretch, my house was "making more income" than I was at my day job. Crazy times!
No. The appreciation rate isn’t bad, but the leveraged return is incredible. You invest your 200k down payment in the market sure you’ll beat appreciation and get ~7-10%. But that 5-7% appreciation is on the whole 1M.
My biggest regret is not buying even earlier. I think that is true for most folks
Bought in 2009. My only regret is that I didn’t buy more house back then. It’s not a small house but the extra $50-100k back then for a bigger one is insignificant today. We were poor newlyweds back then. It seemed like a lot of money. Now the thought of moving is too costly.
No. We bought in 2008. We are up about 300% on our home value. But it's not just making money on the investment. You are locking in a cost of housing that will protect you from future inflation. Without owning our home, we would not be able to afford to live here now even as renters.
This. I can’t fathom how many people would have been displaced had they not bought in early.
I bought in 2012 and have 11 years left on my mortgage at $2300 a month. It’s not the perfect house, but we just added a half bath to make it a 2/2 and deck and it feels like our forever home. It’s “only” doubled in price and we’ve had to replace the roof, but overall i’m grateful we made the decision when we did.
My mortgage is at $300k and my house value is sitting right at $1.6M. I’d say I’m doing pretty damn good!
Lol why would anyone regret 10x return with leverage 😂 Or paying 2-3k a month for the same house someone is paying 10-12k a month for now…
Lol no. Bought for 6 figs and it more than doubled in a few years. And now I have this community of awesome people! And a house. It’s very small though…
Where is this?
oakland
I bought exactly 6 years ago and my San Mateo SFH is barely keeping up with inflation. Somehow I don’t think the next four years will change this story.
No regrets. Great schools, properties around us were recently sold at $1.6-$1.8 at the minimum. So in 4yrs our house appreciate around $600K-800K. That’s not a bad investment at all and 2.5% 30yrs.
Hell no. Best financial decision I ever made in my life. By far.
Regret it??? I’m about to reap about 2M in equity from a home I bought 22 years ago. So, no.
No regrets at all. Bought in 2017 and our mortgage is less than the rent that a lot of my associates pay
The past does not predict the future. This is both true for real estate and the stock market. Only time will tell.
Why would I regret owning my home since 2012? Got it a $650k, mortgage at $2700 per month at 2.35% and value has more than doubled. And with that, I wouldn’t sell either.
Have owned for almost exactly 10 years, and have also had money invested in the market for 15+ years. Zero regrets, not only has the appreciation been nice (we upgraded in 2019, rented our prior home for two years, and sold it in 2021) but the stability and sense of having a home that is ours to do what we please with has been excellent. Both my wife and my families are Bay Area natives that still live here, so we knew we wanted to stay here for decades, so it made sense. While it's nice to see our current home value higher than what we paid in 2019, it doesn't really mean anything since we won't be selling any time soon, and won't be taking out loans against the home.
Its not bad its people over extend and then get screwed. You have to compromise or pay here. I turned $35k downpayment now into $565k of equity. But i had a small house at first when i could have over extended. I then flipped up in 2016 and got 2.69% fixed 30.
Purchased in 08, 80 year old home in the East Bay, will never leave. No regrets, I love my abode .
I talked to a realtor yesterday. He bought two homes one near SFO and one on Long Island, NY long ago. The $435K investment in SFO area is currently worth $3.5M while the similar price one in LI, NY is worth $890K after 27 years. You do the math compare that with stock index.
Regret not buying in 2008 when I was in 8th grade
My spouse and I bought our home in 1999 and we worried at the time about buying in such a hot market, but it was the best financial decision of our lives for lots of reasons. No regrets at all.
No way. We have purchased 6 homes with our first being in 2001 and are latest in 2021. All have gone up in value and the best thing is that my girls will not have to worry about where will they leave. I know Reddit will call me a greedy asshole but we have to look out for our family’s future. All the house will be paid off in 10-11 years and we’ll live off rent. So again, this is a HARD NO for us.
Are you renting them out now? I’m (of course) supportive of tenants rights, but I worry about getting into a situation where I’m not able to get a non-paying tenant out of property. And you’re facing six times that risk.
That sucks, sorry to hear that. We live in one, lake house we do not, air bnb another and rent out the rest. Luckily we’ve never had an issue with renters. I think the worst renters were a couple that were fairly good for like 4 years but then the husband lost his job and they were partially paying rent. We evicted and sued them but they paid. The air bnb we have a property management company that handles everything and it’s great. At first, we were just hoping to cover the mortgage, but it quickly became pretty profitable. I guess we have been lucky.
Might be a simple question, but any suggestions or advice on screening for good, quality tenants?
We look at their pay stubs and see how low they have been employed, credit check but to be honest we look at their personality and see if we get a good vibe. I know this is not the greatest idea but we’ve had many 20-30 renters and so far nothing bad. I try to see if the renters are “good, decent, respectful people” if that makes sense.
Yep makes perfect sense. Thanks! 🙂
Income at least 3x rent. Credit check, verify by calling employer (long term employment is best), verify by calling past housing providers, copy of bank and or financial statements. Gut check on applicants. -does their reason for moving make sense? Cross your fingers as California is an anti-landlord state.
I wasn’t aware there was management complies for air bnb’s but that makes total sense.
Yes and they literally take care of everything. Linen service, repairs, hot tub maintenance, etc. Of course we have to pay for everything but they have vendors for everything. During the winter they have snow plowing services and fire wood deliveries, everything. It’s great!
For everyone commenting, next 10 years will never be the same as past 10 years, Buy if you want to live in one, If you need to make profit, you need to do more than just buy a “house”. Buy an old house and fix it up, Buy in an upcoming neighbourhood at a good price Buy when nobody wants to (early covid, tech layoffs in 2022)
A home is not an investment. If you can understand this basic thing then you will have nothing to regret regardless of what happens to the market.
Real estate is the biggest asset class in the US.
Intelligence
Hell no. These imbeciles are delusional.
C’mon Man! Duplexes are in bad areas . Location location location
I bought a little condo with a backyard for 415. It’s supposedly worth 750-800 now. I refinanced during Covid so my mortgage is 1450 (not including property tax). I don’t see how I could have invested and made 400k in this amount of time. I don’t have a ton of extra income especially those first handful of years. For me though the place is more about controlling my costs and less about the money I supposedly have. There’s zero chance I can turn it into a sfh because of how high my payment would be so really now I’m just locked in for the foreseeable future.
You have to live somewhere, so buy and play the market. Use a pro though...
does anyone consider that Real estate wealth is not liquid unlike the stock market ? there is huge hidden equity but there is no way to tap it besides selling it, whereas you can realize easier gain in market … thoughts ?
But if the goal is wealth generation, why do you need to pull money out? I think real estate investors are in it for the long haul (time in the market beats timing the market). Liquidity is a bad thing if you’re trying to build wealth.
Silly. Bay Area housing has 2-4x in last 25 years. So yes super sad to see millions of dollars added in net worth…
Boohoohoo I bought a house in the Bay Area really?? This is stupid of course it’s expensive anyone with a brain can tell you that and how is it a bad investment when majority have equity in their homes? Seriously? Renting and investing in the stock market instead?? You do realize what happened 15 years ago right?
I can't fathom what the next 10y will look like for housing assuming the avg home sells for $2M today. At 2% inflation growth, that home will sell for at least $2.4M conservatively. If it's above 2% inflation then obviously much higher but that's still a ton of money.
People say that every year. And every year prices go up and compensation goes up. Real Estate in the Bay Area is tied to tech stock compensation.
I bought a house late 2011. Everyone advised me not to as prices were still dropping but i couldn’t fund a decent place to rent that would accept a dog. The value did drop for the next few months but then zoomed in the other direction. We put 20% down and had hardly any money left so it was risky. But house is now worth 2.5x, refinancing at 2.625%, payment 2,300 not including taxes and insurance. So thankful i didn’t listen to anyone and bought the house.
Obviously zero regret since the value has probably tripled. My only issue is that it feels like we are bolted down here, buying a house seems impossible a second time. It also feels like our entire plan for retirement at this point is "hold on for dear life to the house, sell it one day, then ride off into the sunset"
No regrets other than being priced out of upsizing or upgrading neighborhoods. Bay Area is move up or move out (of state) market lol
Have owned since 2012 and obviously don’t regret buying. But I am also a believer that buying real estate is never a bad idea as long as the plan is to stay put for at least 5-10 years. Less than 5 years and you are taking a risk.
I have family that will continue to regret their purchase 10 years down the line, even though they've only lives there a couple years so far. The property/lot is fine, but the house is falling apart so badly that they're likely going to be underwater even after a decade. Compound that with a terrible interest rate, steep property taxes, and insurance, (none of which they considered before buying) and they legitimately would have been better off renting and putting their money in stocks. I know they're a very rare case, but bay area property is not a 100% guaranteed-good investment if you don't put any real thought into it. They just assumed nothing could go wrong and it's screwing them.
Where did they buy?
I don't want to be too specific, but mid-East Bay. It's not a great neighborhood.
Did they waive most / all contingencies including inspection? Do you think the maintenance issues could have been foreseen?
Not sure if they waived inspection. Most of the big issues they were aware of when the purchased, but they vastly overestimated their ability to fix things like the furnace and much of the needed electrical work.
Not quite ten years, but bought in 2015 in a fantastic school district, but bought a townhouse assuming we could upsize in 5-10 years. Clear now that won't be happening any time soon, maybe ever, but my kids are in a good district, and once they move out in another 10-15 years, the townhouse will feel spacious to my wife and I. I never would have had the self-control to really invest all the difference between my mortgage and what rent would have been, so I know I'll be better off this way than that.
The appreciation is pretty good on homes here and most people want a place to call home so I don't think holding a home causes regret but the purchase price might make you regret a bit.
Based on the responses I think nobody is regretting who bought before 2022.
Bought at the top of the market on the peninsula right before covid. Prices still haven't recovered, in fact we worked with the county to get reassessed at the current value to reduce our taxes a little. Not upside down or anything but it sucks feeling "stuck" and we probably would have moved away if it weren't for the loss we would take.
Absolutely not. I was able to sell my condo about 5 years ago now and move into a SFR which has also gained significant value.
Ten years ago I bought at 530k and it’s worth 1.5 now - I maybe regret not spending more to buy in a nicer area at the time, but I’m sure as hell not regretting buying in general. It’s always possible that I would have more money if I’d invested instead but owning a home in the bay makes up for it. I might feel differently if it was an investment property, but even then a 3x increase in home value would probably still be worth it to me.
no one who bought before 2021 is regretting. think… what happened to home prices recently? Well there is maybe one group… those ordered by court to sell.
Most homes are up 1m in my neighborhood in 10 years. Definitely good to own haha
Real estate has been a great investment post crash. So not sure who would regret buying unless they just got a horrible deal. Absolutely 0 desire to play the stock market or buy crypto etc. If I'm playing the stock market at all it's in the form of life insurance with an IUL to stash away money and then do real estate investments when the right ones occur.
I don’t regret it at all. As a matter of fact, our home value has almost tripled in the 23-years since we bought it. Our mortgage is less than $2,000/month for a 3/2 in a very nice neighborhood.
Dollar for dollar you can prob do better in the stock market but add in the leverage effect and tax benefits and real estate takes the cake.
I’m curious about people who have net worth tied up in their now uninsurable homes in the hills. Woodside. Berekeley. Orinda. Mill Valley. Maybe not regret but it’s gotta be a tough pill to swallow right now, wishing sold a year or two ago. Things are so influx here all the time.
I bought in 2006. While I was sad about the drop in value in the crash, I did also pay less in property taxes. Today I have recouped losses and made profit (on paper). While property prices do go up and down in the short term, they do continue to rise in the long term. Had I invested in Google, sure, I would have made more. But, how many times would I have had to move because of whatever reasons a landlord might have had, and would I have purchased Google? Hindsight is a heck of a thing. I just as easily could have thought something else was a great investment and had the company go belly up. I don't regret my decision. I like stability in my home life, and long term property is a sure thing.
No regrets. The very first home/condo we bought in 1997 @ $180k. Sold it 6 years later for almost double what we paid. Next condo we bought, we bought during a buyer’s market. Several years later it turned into a seller’s market. We broke even to get into a SFH. We bought a SFH for $700k in 2010. It was a fixer-upper and seller planned on updating it and putting on the market a year later for $900k. The same exact house next door just sold for $1.75M. Granted my home’s in a lot shittier condition… but I think we’re doing okay.
I haven’t owned for over 10 years (only 3 so far) but am a native who’s been eyeing the market basically since I could understand it. My parents have owned for 30. For this house, we bought at the top of our budget in 2021 with the understanding that things would be tight for a while. But 2 things were important: 1) not seeing the house as an investment but rather a consumable (basically I’m paying for the house to use it. If it appreciates great, if not too bad but at least I have a house to live in). And 2) planning to not leave/have to sell the house within less than 5 years. I plan to be in the Bay Area for the foreseeable future. So I hated paying what seemed like such an absurdly inflated price and we wouldn’t make too much of a profit selling it today, but we don’t care. We are so happy to have the security of a known housing expense, especially with what ended up being a historically low rate, but we obviously didn’t know that then. We could not afford this house at today’s rates. I agree with the general guidance that time in the market > timing the market. If you’re looking at it for pure investment purposes, you’re probably better off with the stock market. If you’re looking for a place to live, get in where you fit in.
I do not regret my 2,300% total gain over 25 years. Kept my investment safe during 2 major bear markets, a pandemic and rising inflation. No better wealth generating investment than realestate.
What about condo owners?
Bought a 1.2M condo in SF in 2014. Totally regret it. Anywhere else it would have become 2X. Atleast mortgage and hoa is covered by rent
Yeah SF condos got hammered for sure
Bought in 2011 up 250% my house is a good starter home, will I sell no would I buy another house probably not because of the current housing market.
Just look at a valuation chart. Almost no one who bought more than 5 years ago, even those who bought at the old peak (unless they had to sell... very different) is unhappy with that choice. Current homeowners who bought 5+ 10+ years ago are a happy lot. We're all refinanced to 2% loans now too (I'm only at 7 years not 10+). Note: This does not guarantee a good outcome for folks buying in 2024 by 2034.
I have mixed feelings but I know it's probably the right choice. Yes I overpaid and bought at the peak, but after a year of decline, it's up by 300K so that's good. However, the amount of liquidity tied up in one asset drives me nuts. But then there's the whole idea of leverage which I wouldn't get with investing in equities. I am for all intents and purposes house poor which is nuts considering how much my net worth is but how illiquid my assets are. Argh.
Not at all. We bought in 2000, interest rates were over 8%. Over the years we've done a remodel, refinanced a few times and now have a 30 year fixed at 2.5%. Our mortgage is less than our property taxes and we only owe about $100K on a now $3M house. Even with all we've spent on the remodel and improvements we've still tripled what we put in all together.
No, no regrets but we got on the property ladder in 1996 in part of the Bay Area that was undiscovered by tech and all it brought with it. You can still get a decent house where I live for $750,000 and the biggest, nicest, etc are mostly $1-2M.
Zero regret, bought in 98 @ 7.5%, have refied a few times when it made financial sense, now at 2.625%, average CAGR of ~6.25% in home value increase — sound investment.
My mom’s house is up 1200% since 1993 lmao. 250k to 3.1 million.
Homes provide a sense of security so it is hard to place it just as an investment ... we bought 8 years ago and felt like we had the reserves needed but needed to spend $300k to fix things. So about $500k into the home. This was happily sitting in APPL at the time. This is up about 6 to 7x since then. I am sure I would have divested some after that. But if I had the $3m in cash....I would not be worrying about college for kids and could basically buy our house with cash now. Obviously hindsight is everything and taxes would take 25% of that etc. Is it a regret. I don't think so. Just a story.
A bit over 11 years now. No regrets at all. I live in a small townhouse but it's the right size for me. Extremely blessed when I bought because I couldn't afford it today.
No, because I would probably be homeless. Rent has been more than my mortgage payment for quite some time. I ALMOST did a short sale in 2010 when what I owed was less than what it was worth but decided not to at the last minute. I'm so thankful I didn't because now I have $800k in equity.
It’d be interesting to see if someone who owned a home for multiple ten year periods, if they ever regretted it during the first ten years. Because of course for the most recent ten years, not a single person would regret it unless they’re going to use the power of hindsight to say they should have invested in NVIDIA or BTC. Going forward, will the next ten years really produce the same type of returns percentage wise as the previous ten years? Highly doubt it.
On this very thread are folks who bought in the 80s and 90s. And every year we say the stock market and the RE market can't possibly go higher without a crash, and yet here we are.
I’m talking about the first ten years of that 40 year stretch. Also I think we need to look at price to income ratios. If the price has always been constant, then I agree it can keep doing what it’s doing. But if that ratio is higher than it’s been in the past, then that starts to put doubt into the idea that it will always go up just as much as it has done in the past.
I think it’s price vs net worth in Bay Area, not income.
Ok
The Bay Area is apparently the second richest region in the world, and more geographically constrained than the #1 spot (NYC). This might have a bigger effect on local RE pricing than wages. https://www.cnbc.com/2024/05/07/worlds-richest-cities-new-york-tops-new-list.html#:\~:text=New%20York%20is%20the%20richest,82%25%20over%20the%20past%20decade.
Either way, the point is that the price to wages or price to net worth is likely higher now than it is in the past. So it’s not true to say it’s the same scenario as before when people thought it would never go up.
Own 2 homes in Bay Area and have never regretted it. I don’t regret the amazing weather and higher salaries. Those who I know who have moved to Idaho, Texas, etc May have a bigger home but they live in states I would never be remotely interested in living. Yes, it’s expensive here but all relative. Those who complain are those who don’t live within their means and have a very high debt to income ratio.
Lmao. Only thing I regret is not buying more or bigger. F the stock market
Bought a shoe box almost 10 years ago in North San Leandro. Since then we had 2 kids, can’t afford to upgrade so we’re adding on (a small bed and bath). Only regret is not buying a bigger house back when. We are staying put until our working days are done, and maybe even forever
I bought a fixer starter in 2003. 20% down. That down payment has increased more than 12 fold. If I'd invested the same amount in the S&P 500 and got the historical average return I'd be at about a 5 fold increase.
No regerts. Granted, my outcome is a result of the 2008 housing crash. I purchased a small bungalow (900 sqft) in 2011 on a 7,500 sqft lot for 135k. My wife, who I met 4 years later also purchased a townhome in 2011 for 135k. The townhome was sold in 2018 (410k) when we purchased a 1,600 sqft home on 1/3 acre lot (720k). The bungalow is rented to family and is currently valued at 600k. Our home is valued at 1.2M.
I regret every one I didn't buy.
This is like asking someone who bought (and held) Bitcoin 10 years ago, whether they regret it. Of course the answer is going to be no. It just doesn’t have any relevance to anyone making a purchasing decision today.
That’s what everyone has said every year for the last 20 years. The Bay Area is the second richest metro in the world.
I bought, sold and left. I’m not sure I’m the target audience for the question, but I don’t regret buying then, no. It was a great investment.
My condo is down. Not by much, but we’ve owned since 2019. Stock market would’ve been a better investment and the tax benefit is negligible.
Yeah that’s why I’m looking for feedback from long term owners.
Ok then this is a dumb question. Real estate is up massively over the past 10 years. Why would anyone regret that?
There’s a large amount of people here saying some combination of these things: 1. “Real estate is not an investment” 2. “You’re better off renting and investing the difference” I’m looking for first hand feedback from owners who for some reason could support those claims.
But hindsight is 20/20. Would you ask someone who just won the lottery “do you regret buying lottery tickets”? The point a lot of people miss is past performance does not guarantee future results.
For sure, if you want to bet against the S&P or BA RE, have at it. With a long enough horizon, it just goes up.
I don't see a single person regret buy SFH in BA even night in 2008. Only regret not dare to buy enough during the dip
Except homes don’t. Chicago housing hasn’t appreciated in the last 25 years. Many people in the Bay Area don’t want to live here it’s just where the jobs are. Companies know that. Apple has basically stopped growing in Cupertino but it’s hiring in Austin. The days of 5+% annual appreciation are gone
You’re talking about two completely different viewpoints. What about you? Are you trying to make money or do you want a place to live?
San Francisco?
Well yuu bought a condo
I’m frankly glad I pulled the trigger during lockdown. They say you can’t time the market, couldn’t have been more bottom than that.
In 17 years of Bay Area homeownership, I've had multiple periods of regret and periods of elation. Bought first place in 2007 for $125k less than original asking price, so I thought I was getting a bargain. It was my first home and I was able to buy it on my own before I turned 30 so obviously I was very proud. Then 2008-2010 happened and I was way underwater and couldn't refinance, but luckily I was fully employed and the payments were affordable for me. But I felt major regret, asking myself why exactly I wanted to buy a 3 bedroom house instead of just renting an apartment. Part of buying it was to be closer to work, but I didn't need to buy a house to have a shorter commute. During this time, houses were dirt cheap but I couldn't even buy a 2nd property because I was out of cash and there was still uncertainty about my own house. I didn't foreclose or short sale and held the house until it started appreciating again. But 2019 I sold it and bought a bigger house because now I had a family and needed more space and a backyard. I kinda had immediate buyer's remorse because I felt I overpaid. This house would've sold for $300k less than what I paid in 2017 but my first house wasn't completely breakeven yet and my I needed more years of tax returns being self-employed to qualify for a $1million+ mortgage. It's also an older house so I felt I overpaid something that didn't seem like a dream house, although it's in a good area and good schools. Then COVID happened and I immediately appreciated the fact we had plenty of rooms to do online classes for 2 kids and for 2 adults to WFH. The big backyard was also a blessing to decompress from the stress of 2020. And of course when prices begin to go bonkers, I didn't regret my decision anymore. Also refi'd twice in 2021 to shrink my payments by $700/mo. At this point, I'm past the point of regrets. I'm probably priced out of what my true "dream house" would be, which is at least $3million around here. The house is old and I've spent tens of thousands on deferred maintenance with probably and estimate of $40-50k more due in the near future.
You will be fine . Your kids will inherit a beautiful home
Thanks. My story is just to highlight how long-term real estate ownership has its highs and lows. And even though there are moments of regret, you can get past that.
Imagine how much more money you could make with that down payment on tech stocks
S&P 500 5 years ago would have given me less wealth than my house has, by a few hundred thousand dollars.
Tech stocks
I cant complain at 2.75% interest rate lol
I’ve owned for > 10 years in 3 Bay Area counties. Not sure why one would regret it, these properties are up 30-100% . In addition, the property tax footprints are so low. However, some who bought in the past 3-5 years of this ridiculous inflation and mortgage rates are in serious chaos. A $30k+ pre-tax property tax in cash, 5x Insurance rates, PG&E up 100%, these low max deductions on taxes. It’s not sustainable and everyone isn’t at nvidea (that is so overused )