housing doom

With Anna's business, our finances are now complicated enough that she had to go talk to an accountant. I didn't meet him, but he sounds really nice,. In examining our situation, he did the math that's always been too hard for me, and demonstrated with numbers that we should buy a house.

We're already up to our ears in difficult projects, but there was this beautiful little house for sale. The price would be ambitious for us, but whatever, it couldn't hurt to try.

Let's set some expectations, for those of you not accustomed to Bay Area house prices. In Redwood City, where I live, the absolute lowest you'll find a 2-bedroom house within a couple miles of downtown will be $450,000--that's likely to be a fixer-upper--and it goes up from there. If you have normal American expectations about what kind of house and neighborhood you'd want to live in, you're looking in the $500k-$900k range for an 1,100-square foot house on a 5,000-square foot lot.

I went to talk to our realtor about this house, to find out whether it was worth buying, but also whether it was possible or worthwhile to put an offer in. It turns out the answer was "no":

• Banks are tight on financing right now, so you need 20% down. On a $500k house, that's $100,000 in cash. On a $700k house, it's $240,000.
• Houses in this range are getting multiple offers, at least one of which is typically all cash with no contingencies. Cash offers usually win.
• For an offer to be considered, it usually needs to be at least 40% cash.

That's $200,000 in cash for a $500k house, or $280,000 for a $700k house.

Life's been really good to me, but not quite that good, yet.

With much less excitement, we're keeping an eye out for a condo we could live in for a couple years before renting it out and buying a house, but the outlook is pretty grim.


Sometimes I really want to move somewhere with weather and a sane housing market.