Buying a home could be your biggest financial investment and it is usually a person's largest financial commitment. When you buy a home you also buy into the quintessential American dream; however, in the Bay Area obtaining that home, apartment, condominium, or dream can be overwhelming. The Bay Area is beautiful, densely populated, expensive, and the real estate market is competitive.
The types of homes available in the nine counties of the Bay Area are vastly different. San Francisco County offers potential home owners a variety of single family apartments, condominiums, and a few homes. In Marin, Alameda, or San Mateo County there are many more single family home options that range in size from mansions to modest 2 bedroom cottages. One thing that is consistent throughout the area: price.
The Bay Area is ranked as one of the top three most expensive cities in the United States, along with New York City and Boston. Nationally, home sales increased by 12 percent in March of 2005, setting a new record. However, these high prices also mean good investment opportunities for potential Bay Area homeowners. Bay Area home prices in January of 2005 were 20 percent higher than the same month in 2004, and the number of homes bought and sold in that year set a 19-year record. According to the San Francisco Chronicle, in 2004 Bay Area home buyers pushed the average home price to almost $560,000, “the strongest year-over-year appreciation rate in four years.”
When buying a home the first thing you need to do is to meet with a loan officer and figure out what you can afford. Many potential home owners use mortgage calculators and other finance tools to assess their buying potential. However, meeting with a loan officer will let you know what price range you can afford, what your down payment will be, and what your mortgage payments will be.
The last few years have proved lucrative for that investing in the Bay Area residential real estate market, but with the promise of financial success comes a certain amount of risk. As home prices rise, and sales increase, the amount of rental property available has also increased and prices have stayed consistent or even dropped in the past five years. As a rule of thumb, financial advisors recommend buying a home or apartment only if you are going to stay for at least five years so you can ride out any potential dips in the market. Many people who are unsure if their work or life commitments will keep them in the Bay Area for more than five years choose to rent. However, as stated above, this year the average Bay Area home owners have see a 20% increase in their home in just one year.
In the larger cities of the Bay Area, San Francisco, Oakland, and San Jose, potential homeowners are looking to Tenancy in Common as an alternative to outright home ownership. If you can't afford an apartment, the Tenants in Common (TIC) is a great value because you share the mortgage responsibilities with another person, however there are two apartments.
You have a number of location, size, and price options as a potential Bay Area homebuyer, good luck in your hunt for the perfect place to call home.
