Peter Brunton

Kathy,

These numbers are just from my estimation, but I would say that if you put 5% down on purchase price of 470k you would get total monthly payments of around 3600 (assuming 30 year fixed). Doing this you would be able to pay off the car and eliminate that payment. After negotiating, 470k is a realistic price for a good home in these areas. - Mon Jul 21 2008, 20:37

Hi Kathy,

10% down is going to give you more negotiating power. A lot of your competition in Daly City/Pacifica will be doing 3% down government loans and you will have a significant advantage by putting more money down because the lower down pament % loans are more risky and take longer to approve.

Also, it depends on what type of interest rate you are paying on your car and student loans. I would at minimum put 5% down, but if you can do that while also paying off your car payment then it's probably a good way to go.

Honestly with your credit score you are an extremely qualified buyer to get in the market right now. Within the next few months you should see a lot more foreclosures coming on to the market and realistically you should be able to get a nice house in the 450-470k range.

If you have any questions about the market or your financing situation please feel free to contact me at peter_brunton@yahoo.com. I'm working with a buyer in a very similar situation as yourself and I have a very solid grasp on current market conditions. - Mon Jul 21 2008, 18:42

Hi Juliet,

As Jed mentioned before I have some good experience in working with REO homes in both San Francisco and the Northern Peninsula. In fact, I'm helping two clients purchase REO properties right now in Pacifica and Daly City; so I'm pretty familiar with the current environment. It's defintiely a different ballgame in dealing with these types of properties as the banks are not very forthcoming in providing the necessary information. However, with some patience there is excellent opportunity to find some great deals. The bottom line is that the banks need to clear these assets of the books and they are flexible on price.

Please feel free to contact me at peter_brunton@yahoo.com if you have any questions.

Regards - Mon Jul 21 2008, 11:37

Per......just to be straight I'm a realtor with a finance background; so I look at things from both sides.

I guess my main point would be that yes the market for the most point is falling; but the majority of those declining markets are in places where easy money was granted to people who really were not qualified. There is definitely a widening gap between the haves and have nots, but the haves will be buying real estate in the wealthy areas (aka, places like San Francisco). This will keep the San Francisco real estate market in high demand.

My second point would be that the average San Francisco homeowner in "A" class sections of town is extremely qualified. Most of the owners are financially stable and are absolutely horrified to keep the market from falling. Therefore, they will continue to hold on to their properties, thus limiting supply and keeping demand (aka, prices) high.

My third point is based on the market in general. Prices will continue to fall throughout the year no doubt. However, places like Daly City are prime examples of the rest of the country. Realistically, there are a lot of buyers like yourself who are on the sidelines who want to buy in areas like this, but are still afraid of the falling prices. However, when mortgage payments truly start to equal rental payment there should be an influx of buyers to the market. Therefore, all these bank owned and short sale properties will actually start to have actual prices that the banks can begin to value. Granted, these loans will probably only be worth 55-60 cents on the $, but at least banks will know what they have and they can begin accurately valuing their portfolios and clean up all the mess. Once this happens, credit will get easier and prices will go up.

The Case Shiller index is an accurate report......but like Jed was saying it can't truly give you an accurate reflection of individual neighborhoods. The central part of San Francisco (the noe valley, mission dolores, nopa, russian hill, marina, pacific heights type areas) have not dramatically fallen and in fact in some areas have continued to appreciate.

So, staying on the sideline might very well be the best bet.......but who really knows. - Sat Jul 19 2008, 20:41

Hey Sid,

What part of NY did you live in? I lived there about 4 years ago and can draw a pretty good comparison between neighborhoods. I'd say that what makes Diamond Heights materially cheaper is the fact that a lot of the townhouses look the same. It doesn't quite have the character that most San Francisco neighborhoods have. Don't get me wrong, it has good value for the convenience and proximity to downtown, but I'd say that most San Francisco home shoppers look for a little different criteria. - Thu Jul 17 2008, 22:04

Brian,

There is a lot of construction in the Rincon Hill area. Yeah, it should do well in the long run, but initially I don't think that you can expect much appreciation. The rents are solid, but I think the negative cash flow would make it a pretty big risk. - Thu Jul 17 2008, 21:52