Open season

[nickjong]

Sarah and I embarked on our housing search yesterday by attending a slew of South Bay open houses. Escaping our miserable Victorian flat in San Francisco is among our top priorities for 2011, so we were relieved finally both to feel well enough this weekend to get out of the house and get started. This time, we won't allow the amazing walk scores

Comments

house buying

[chamois]

Buying a house is terribly complicated and intimidating, yet somehow, once you start looking in earnest, it seems there are enough people interested in you succeeding, that the process becomes fairly easy to follow.

Re: house buying

[mdf356]

Neither buying nor selling a house is very hard or complicated after the first one or two.

My first house was okay, but as with writing software, I learned so much from the first one that the second one was much better.

Re: house buying

[nickjong]

Ha, yeah, I almost worry that too many of these interested parties might coax us into an unwise decision. We'll see and take it one step at a time. :-)

[medryn]

[begin unsolicited advice, bordering on obsession]

Don't do it! Rent/buy ratios are still seriously out-of-whack in the Bay Area. Keep renting and investing your excess cash, and you'll come out ahead in the long term.

[end unsolicited advice]

How soon do you think you might move south? We were hoping to see more of you and Sarah in the post-thesis era, since you do live less than 2 miles away :-)

[zml]

The advice here really depends on how much money you value for "quality of life", under the assumption that by owning your own home, you can improve quality-of-life by changing your home arbitrarily, versus within the confines of a rental agreement. However, rent/buy is so out of whack in your area that you have to *really* value home ownership. (A further consideration is that the total cost of ownership of a home is harder to compute, whereas a rental is fairly easy.. so you have to REALLY want it.)

That said, I also bought in a market where things are silly to buy, so I feel ya'.

Also also, I have faith in a real estate recovery, so it could be a good time to buy. I feel like there's a fairly high downside margin of safety on the investment, with a large potential upside.

[nickjong]

Yeah, every indication is that we might value home ownership more than the average couple. Particularly given that for Sarah's health we want the freedom to install or upgrade the home's air filtration and insulation.

On the other hand, I am wary of being too strident when assessing the risk we're adopting here. I think I've been very fortunate financially in my life, and I don't want just to assume that I'm immune to the risk that bit so many American homeowners in the last few years. But objectively our financial situation seems fairly robust....

[zml]

The health consideration sounds like a very good reason. This is advice I offered a friend recently, too, who was considering whether to remodel his house, partially for quality of life and partially for investment. As long as you're comfortable with the pricetag of the quality of life section, go for it! For things like health, it's hard to even put a price on it.

I think you're looking at a good time to buy, to be frank. My somewhat obtusely worded last comment was saying this: I think prices might drop slightly more, like the 10-20% range, but I think there's not a whole lot more room to drop (hence "margin of safety"). I think they'll stay flat for quite a while after that - there's a 3 year supply of bank owned foreclosures that need to get dumped before you'll see much appreciation - but long term, I'm bullish.

[cellio]

I don't think it's wrong to contemplate an offer early in the process if you've found a good candidate. However, you should first do enough research that you won't later feel that you made a bad deal.

Though this does depend on where you are on the shopping spectrum from "first acceptable is fine" to "how will I know it's the best deal if I haven't looked at each and every one available?".

[zml]

I meant to say this, too. I don't think there's particularly anything wrong with falling in love with one of the first places you look.

Remember, additional choice frequently brings unhappiness due to second guessing. :) A lot of people go a little crazy when they buy their first house and look at tons and tons of them. Don't let the perfect be the enemy of the good enough.

[zuleikhajami]

Whoa! W and I are seriously out of the loop. We had no idea you guys are in S.F. now. We thought you were still in Cupertino.

We'd love to see you guys now that you're all successfully defended and with more free time. :)