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You can live your whole life in fear. Best thing to do is diversify your assets and have 6mo-1yr of emergency funds saved.
Just the fact that the mortgage is equal to current rent is a big green flag, go own a home! 😊
One thing to note, even during 2008 collapse, real estate in SF didn’t dip that much and are one of the only areas in the country that are higher than their 2007 prices.
Buy the house
I’m worried that buying now vs when the market is low, could mean I would get something much nicer, and that the value of the property could drop $100k or more if it’s as bad as it was in 2008.
Also worried that a recession might make me redundant at work, and I’d be unable to find something new for a while, but still have a big mortgage to take care of.
BTW, the crackdown on big tech, will only help the tech sector at large. Right now you have these 3 giants throwing their weight around and killing competition and innovation.
Thanks for all the replies! Appreciate it.
Just saw on Zillow that the area is expected to depreciate 5% next year, and it depreciated 4% the last 12 months.
I’ll let you know what we decide on. ✌️
I’m not an economist, but I went through the last recession in the ad industry. Generally, larger cities felt the impact less than smaller ones. For example, IF they had layoffs at an agency in the Bay Area because the clients are impacted, there are other companies who may not be as impacted and can absorb some of those who’ve been laid off. This is not the case in smaller towns. You should research a potential recession’s impact on tech and the specific clients you work on. My gut says (at least with tech) it’s a cushioned impact.
Offer less
You could save some of your cash, not do 20%, and take pmi. Be open w your mortgage banker about these fears of recession, they can help u move the $ around so the rate, down payment, etc work. And if there is a dip in the market, and you lose your job, move out and rent it to someone at a slightly higher fee than you’re paying. You could also open a heloc as soon as you buy and sit on it just Incase there is a downturn....By owning you’re building debt that you can leverage later on. Some debt is good.
I’ve bought more than once and this is what I know. You can’t time the market or accurately predict depreciation. Like the stock market, real estate has dips but always goes up over time. But most importantly, you have work now and can get the mortgage. If you don’t have work during a recession, you won’t get the mortgage.
I just bought a house in the Bay Area not too long ago. Here's the thing, interest rates are also stupid low, and if they go any lower we'll be at record lows. This fact alone made it possible for us to afford a place that was originally out of budget. Also remember that property taxes are what'll kill you, not really the mortgage - so factor that into your monthly budget.
Definitely make sure you have 2-3% of the home purchase price in addition to the down payment to cover closing costs. That number really snuck up on us. And having an additional $5k will help cover initial expenses for the house (for example, window coverings, curtains, hiring movers, etc).
It's an exhausting process but so rewarding in the end. Can't say I like having to do a project every weekend on the house, but the upside is that it's adding equity in my home.
If you have to unload a house write a tantalizing for sale ad to sell to the hip tech millionaires.