Sharing the load / It often takes teamwork to afford a Bay Area home
After a decade of annual, double-digit growth in house prices, the Bay Area now ranks as the nation’s most expensive housing market, sporting a median home price of $749,000 for single-family homes and $600,000 for condos, according to the National Association of Realtors.
Woot! We’re #1! We’re #1! Congrats Bay Area!
Nothing proves we live in a special place like these kinds of stats. And these stats are only possible because we live in such a special place.
The Chief Economist of Quicken Loans has some good tips for people living here:
According to Walters, no more than 40 percent of your gross income should go toward a house payment (including principal, interest, home insurance and property taxes). That assumes you have little to no other debt such as car payments, students loans or credit card balances. If you do, expect that 40 percent allocation to drop, perhaps significantly.
That’s right… 40%! Remember, the Bay Area is so special you’ll never need to go on vacation again anyway. Or at least, make sure you have the right parents:
Amanda Stipe turned to the next best person, her father, when she bought her 800-square-foot, junior one-bedroom condominium in San Francisco’s lower Pacific Heights.
After several years of renting in the city, the marketing manager for a global law firm yearned for a place of her own. Although she had saved up for a down payment, the high cost of real estate meant carrying a home loan beyond her means.
“I definitely had sticker shock when I started looking at places,” Stipe said. “It was very discouraging.”
Fortunately, her father offered to help out financially. That allowed Stipe, who is in her 20s, to increase her down payment, which meant a lower, more affordable loan. In March, she bought her place, one of 36 units in a seven-story 1920s building, with a 20 percent down payment. Even with her father’s initial contribution, she still took on a roommate to help offset monthly expenses.
“Having a roommate helps, but it was really my dad’s money that made the difference in being able to buy something,” Stipe acknowledged. “I thanked him with a big hug and high five.”
Ah yes – there’s nothing as satisfying as owning a 800 sqft small 1-bedroom condo, and having a roommate thanks to your dad. (The question of “where does the roommate live?” is left as an excercise to the reader.)