alt Hacker NewsI'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF).
However, I keep thinking about how someone I know was laid off last year only two months after buying their first home.
I'm a SWE making OK money here but not FAANG/unicorn-level, so it's tough to imagine buying and then being on the hook for a mortgage without a job even with some savings.
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I hate to repeat this old adage, but in case it helps to see it here: if you've been wanting to buy something, and you see yourself staying in the area and the place itself for many years, and you have some savings buffer if things go south, then buy. Don't do it because you want to magically have paper equity gains in the next 12 months. Do it because you like the place you're looking at, the neighborhood it's in, and because you have enough funds in place to get through a downturn if a layoff happened.
Of course I say all of that and it's good to know what could happen if a terrible downturn does happen like in 2008 (even the nicest Bay Area hoods prices dropped 25%+).
Last thing, single family houses, especially in the Bay Area, are typically more insulated from price drops (insulated not immune). If you can afford a small single family then it might be worth it, especially if there's expansion potential (either for yourself or the next buyer if you decide to move on). And even better if there are some cosmetic problems that are tractable because let's say you do get laid off there's nothing like building some sweat equity in the downtime.
Just my two cents having gone through similar in the past.
}}}} I'm teetering on the edge of being able to afford a small condo (a small SFH would be nice but not as much supply) in the Bay Area (SF).
Posting this anon. At our last office, executives purposefully encouraged home ownership because it made people desperate, risk-avoiding, and easier to control.
You could probably afford some really nice property not in the bay area then.
its not easy to do, but being able to afford a year+ of mortgage payments and living expenses is pretty important to your peace of mind.
>it's tough to imagine buying and then being on the hook for a mortgage without a job even with some savings
Key thing to remember here is that you always have to live somewhere, even if you're laid off. Unless you're ready to head out to BFE to save a few hundred bucks on rent, it doesn't get much better than owning in that situation. Plus you could potentially have equity to tap, get a hardship forbearance, or worst case scenario foreclosures take much longer than evictions. This was the lesson COVID era taught me; if you're losing your home it's considered a tragedy, and there are tons of resources to help you. But if you're being evicted from an apartment it's considered a personal moral failure, and you're treated like a criminal.
I waited till I had the whole sale price in cash then bought, it's reduced my layoff anxiety 1000% and I'm sure it's not the savviest financial choice, but I'm happy with the security of knowing I can stay here for a long time no matter what
I was laid off 35 days after closing.
Absolute hell. Now, thankfully we didn't over-extend, and live by the at-least-6-months-of-savings.
We made it through, but just writing this down makes my heart rate spike.