It’s no secret the Bay Area housing market has significantly changed from just 6 months ago. But as we make the transition from a strong seller’s market to one that increasingly favors buyers, Bay Area residents are taking pause and weighing their options.
To buy or not to buy? And where?
A recent SFGate article details a growing trend in the real estate world: buying a “second home" prior to buying a primary. An unorthodox idea that may make some traditionalists cringe. But truly this is a strategic decision for many. One that allows a person to leverage his or her purchasing power to buy at a lower price outside the Bay Area, build equity in alternative hot markets, and then use this equity to eventually purchase a primary.
The Bay Area’s transient workforce coupled with overall decreasing job loyalty, have led some to believe buying a “second home” first and renting where they currently live may actually provide buyers with more flexibility as to where they want to live long-term and where they want to work. Further, a “second” home could be used as a vacation rental to supplement existing income. But be diligent before you buy and know the market and local regulations as popular vacation hotspots have begun to issue restrictions on short-term rentals (i.e. Tahoe and Napa) in response to continued housing shortages. Further, some of the booming pandemic real estate markets, aka “Zoomtowns,” (i.e. Boise & Denver) are now significantly cooling off.
Industry experts agree that as prices go up, and now unfortunately interest rates rise, some who are sitting on the sidelines are at risk of getting priced out. So, to get in the game, buyers are creatively looking outside their cities to build the equity they ultimately need to be competitive in the Bay Area.
Here’s How to Gain Your Competitive Edge: If you are not in a position to buy a primary now but want to increase your wealth position and opportunities for a future purchase, buying a property outside of the Bay Area might be something to look into. Here are some general tips:
Please reach out to us with any specific questions or concerns. We’re always here to help navigate your real estate needs.
Rabello Group