Is buying a fixer upper in the Bay Area profitable?
At 54.4% California is the second lowest in the nation for home ownership, beat out only by New York at around 50%. Best state for home ownership is West Virginia where approximately 75% of homes are owner occupied. What this means is California is fast becoming a majority renter state, basically pricing itself out of the home ownership future. One obvious answer is to build more housing; to do this we need to address the “not in my back yard” issue so prevalent in many cities. Overall, California’s projected housing needs stand at 180,000 units a year, this is a lot of homes that need to be built (data from 2018 Mid-Year California Housing Market Forecast by Leslie Appleton-Young, June 2018)
One way to look at this is the usual doom and gloom of low affordability housing and what it means to us all; another way to look at it is to see the opportunity; you’ve guessed it, I’ve decided to take the latter route as I figure enough folk are knocking our housing market! Today’s post is going to be about where in the Bay area you can most likely buy a 3bedroom/2bathroom house for under $1 Million (for those looking for something affordable and, yes, I know it’s almost laughable to talk of affordable housing and $1 Million in the same breath!).
I did a search for San Mateo and Santa Clara counties, at least 3bedrooms and 2bathrooms and under $1 Million, I came up with 386 houses, most of which are concentrated around South San Francisco, San Jose, Morgan Hill, and Gilroy; while I understand this isn’t a lot of houses, it sure is something! When I continued down the price point, it wasn’t until I hit $600,000 that I only came up with three 3bedroom/2bathroom houses, after that the houses were 2bedrooms or 1bathroom; $600,000 appears to be the defining point, with only 15 houses below this price.
What does all this mean? From my point of view, there are still a lot of opportunities in the Bay area, buyers need to be more realistic in the fix up after purchase, or a longer commute may be in their future! However, if we look at home appreciation, all the hard work is worth it! Where else can we put our money (and have a home to live in) with this type of appreciation???
Just the Facts Ma’am!
Covering Silicon Valley. All information from the Multiple Listing Service.
Want information for other areas? Comments? Questions? Send me a message, I’d love to hear from you!
