Ever since I moved out of my parents house on Brentwell and moved north to San Francisco I’ve wanted to buy a home in the heart.
Because of different jobs and family circumstances I was never able to even put an offer down. It seemed to me that if I was able to do $400k then prices would be $600k. Then when I got to $600k the needle had moved to $800k. I always felt like I was just a little late and a dollar short. (Well, a few hundred thousand dollars short).
The other thought I had was that if I bought then I was buying at the top of the market. That always made me hesitate.
There were two times this changed in my adult history. One was in 2008 when the housing market collapsed. At that point I hesitated but could have done it had I dug deeper. I have regrets of not going in when the chance was ripe.
Then in early 2021 I had the chance as interest rates were low and the housing prices hadn’t rocketed (again) yet. But in January 2021 I took action for the first time! The house at 18091 Fieldberry Ln went up for sale. It was the house of someone I knew. (Well I knew one of the girls as she was my age and we grew up together).
I worked with Dixie Long and put down an offer of $1,200,000, the asking price. I was ready to go but was scared. This was the top of the market! (Again) and I told them I was not going to raise my price for nothing. The house was perfect. It wasn’t completely remodeled and it had a gorgeous pool in the backyard. It was even the same floor plan of the home I grew up in!
The house sold to someone who offered $60,000 more. $60,000 is like nothing when you are in for $1,200,000 and the interest rate is 2.5%. I should have bid up. The home on Zillow now estimates at $1,538,700.
As rates went up later that year and I bought a different house (not in the heart) I learned a few things:
1. It’s not about the price it’s about the monthly payment. I hadn’t bought a house nor had a mortgage for many years at that point. I looked at the giant price tag and thought “no way!” Since rates have gone up I’ve realized how manageable it would have been to have that additional $60k.
2. There is a lot of demand in the heart and prices are resilient.
3. This is cliche but you can not time the market. I thought: well prices will go down when rates go up. That hasn’t happened. Some how with rates going up the prices have still gone up.
I remain optimistic that I will still buy in this neighborhood. I foresee a lot of turnover in the next decade. Homes don’t go on sale very often here and they will be less now that interest rates are higher (7%) but an aging population doesn’t care about interest rates.
Many of the people in the heart have lived there for 20+ years. I know people that have been there 40+ years. As this population continues to age there will be a point where many of these homes go on the market.
It may take a while, but I’m patient. I’ve waited 20 years. I can wait another 20.
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