Impact of IPOs in the east bay

Neha Shah · 2019-04-03T13:51:31-07:00

Hi All -New to the BiggerPockets forum. We have a condo in SF but are looking to move to the Lamorinda area of the east bay anywhere from now to in the next couple years as we start a family. We would rent out our condo when we move. Our condo is exempt from rent control rules and is higher-end. We also have another rental unit in the south bay. We won't be selling either of these condos anytime soon. With 5 IPOs in SF this year and a projected 10m new millionaires in SF, we're wondering if it makes sense to buy a house now since the market is potentially "cool." I know it'll definitely impact the city itself, but not sure what the impact will be like in the Lamorinda area. Anyone familiar with the east bay that may have insight? Wondering if the bay area will be largely protected from any normal recession cycle because of these IPOs. Should we buy now? Wait? Totally understand that Lamorinda isn't a high-growth area in terms of a good investment, this is more about quality of life and where want to raise our kids. Just trying to time it right with the current market dynamics.Thank you!

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Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes

7y

@Neha Shah You're asking if you should speculate on appreciation, and the answer is no, you shouldn't.

Lamorinda is a great area to a raise a family, but you're going to hate that commute to SF (assuming you work there).

I've told several friends who were considering the same thing, to rent an AirBnB in Lafayette for a week and commute to SF and see how it is, before you buy. None of them ended up buying there. BART is already full and HWY 24 is backed up for miles.

By the way, it's an estimated 10,000 new millionaires in SF, not 10M.

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Neha Shah

OP

San Francisco, CA · Member since 2019 · 7 posts · 4 votes

7y

Thank you! You're right, I meant 10k, not 10m.

We actually don't work in SF. I work in Oakland (right off bart 3 days a week and 2 days a week from home) and husband works exclusively from home. Does it make sense to buy now or wait? or is it impossible to predict?

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Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes

7y

Originally posted by @Neha Shah:

Thank you! You're right, I meant 10k, not 10m.

We actually don't work in SF. I work in Oakland (right off bart 3 days a week and 2 days a week from home) and husband works exclusively from home. Does it make sense to buy now or wait? or is it impossible to predict?

Impossible to predict but with a 20 year outlook, you are probably good. As long as you don't really consider it an investment, and solely as a lifestyle decision (bigger place with a yard, good schools for the kids, no homeless people on every corner like Oakland), then you really can't go wrong.

My primary SFR in the Oakland hills is a horrible investment (although it has appreciated 20% in the last 2 years), but it aids in a better lifestyle for my family. There is a cost to that, but well worth it, in my opinion.

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Neha Shah

OP

San Francisco, CA · Member since 2019 · 7 posts · 4 votes

7y

Totally makes sense. Just the whole IPO craze has gotten me really nervous and I don't want to get priced out if we wait a year. so thinking about buying now since it seems like the market has "cooled" a bit (just from my tracking...houses staying on the market for longer time, not going for much over listing...which was not the case 6+ months ago)

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Bob Johnson

Investor · San Diego, CA · Member since 2015 · 22 posts · 3 votes

7y

I own a place in Orinda, it's been flat for a few years, but there's always a market for houses there. The public school system there (as well as Moraga & Lafayette) is comparable to most privates, crime is almost non-existant, but there is a underlying "keeping up with the Jones'" ethos, as well as crazy competition to get kids into top notch colleges which isn't for all families. Commute to Oakland shouldn't be too horrible with the 3rd bore now, just avoid the bridge at all costs!

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Gail McGowan

Member since 2019 · 4 posts · 0 votes

7y

Just sold my primary SFR in the Oakland Hills 2018, held for 20 years. Appreciation was 3X purchase price. Rented it out for last few years & sold it as 1031. Purchased 3 other SFRs during that time, using refinancing; those I still own. With 1031 funds purchased a smaller Oakland Hills home. Now have small mortgage, great cash flow and new roof/electric/kitchen.

Quality of life is important, however look at who may be your buyers in 20 years. McMansions are part of a waning trend; may not be as many interested parties which could keep resale at a lower price or a longer sales cycle. Good L

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Neha Shah

OP

San Francisco, CA · Member since 2019 · 7 posts · 4 votes

7y

Thanks all! Would you recommend getting a realtor given that we are already familiar with the area and live close by? In the past my husband has been able to use the "not having a realtor" to his advantage when buying properties before, but just wondering what people think.

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Frank Wong

Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes

7y

Hi Neha,

I know the Lamorinda area and I don't think it will have much of an impact based on the IPOS. It is an amazing area if you are looking for great schools and larger home for that $1m+ price range.

If there is an impact on the East Bay. I think it will be Piedmont, Upper Rockridge, and Lower Rockridge. Those would be my top picks if there is any type of surge bc of the IPOS. But I never speculate. What happens will happen.

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Impact of IPOs in the east bay

Impact of IPOs in the east bay

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