Househack in Merced, Ca

[Catie Mong]

I recently moved to Merced for work and am looking to house hack instead of rent. However, it seems like there are very few houses on the market, at least in an area that I would feel safe. It seems like the market is very competitive right now, and I'm concerned that the low interest rates are encouraging people to buy, but may result in a crash the next few years. However, it seems like because of the surrounding farmland, new housing construction is limited. 

I'm placed a counter-offer on a house for 274k (20k over asking price although my realtor agrees that it was about 10k undervalued to get multiple offers). 3br/2ba built in 1993. Great condition house in a good area, but not great. It's appreciated a lot the past few years, and I'm wondering how much more it will appreciate. Monthly cost (including budget for future repairs) is $1500.  Already have a coworker interested in living with me for $650. Assuming I can get another tenant for the same price, does it make sense to go ahead even with concern about limited appreciation? Currently, my rent is $900 for an apartment. I don't plan on living in Merced for more than 5 years, but am open to renting the property if it hasn't appreciated.