The Mystery Housebuyer

Match game 2013: Buying without tears

Ben and Ruhan want a house in San Francisco. Not just any home — a house, with a yard, good neighborhood, multiple bathrooms, off-street parking, and the usual wishlist of incidentals. Their budget doesn’t agree.

Ben and Ruhan currently rent, but as they have watched their friends buy homes in recent years, they realized that they, too, had a growing desire to own a place of their own. A place they couldn’t be evicted from. A place where the rent can never go up, forcing them to find a new place to rent in a landlord’s market. ($3,500 for a one-bedroom apartment? Seriously?) A place, in short, in which they can anticipate growing old. That will take a while, because this couple is in their early 30s. So they have plenty of time to grow older, and though they don’t know it, they have lots of time to wait until their budget and the market agree.

They hope to spend about $650,000. If their desires matched their budget and the market, they would buy a great condominium in trendy SOMA or a fixer-upper house on the southern end of the City.

From a simple search on Zillow, I found a one-bedroom, 1.5 bath condo just under $650,000 that even includes a parking space. Or for that same price they might take an Opera Plaza two-bedroom, three-bathroom townhouse condo and be right in the midst of museums and concert halls and even a handy courthouse for when they have jury duty. (O.K., most people don’t put that on their wish list, but it’s there nonetheless.) There’s even a single family home in Outer Mission that’s a trust sale; it has two bedrooms and one bathroom, but it needs work. (The listing says “Needs new kitchen, baths, plumbing and too much to list.” Good to know they’re not overselling it.)

But Ben and Ruhan are not there yet; they’re not yet matching their means to their wants. Real estate advisors, agents, and other commentators bring up this topic all the time, and that’s for the simple reason that people shoot for the moon when they are buying a home, especially if it is their first home (so they might not have been paying sufficient attention to how things really work).

They can compromise on all kinds of things, and that could be demoralizing if they don’t realize that some things don’t really bother you if you lose them.

The old saying that the most important thing in real estate is location, location, location is perhaps the savviest way to compromise. The saying is usually deployed in defense of a property that is expensive — if you want to be located in the prime spot, you’ve got to be willing to pay for it. But if being in San Francisco city limits is enough, and Ben and Ruhan don’t have to live next to their favorite restaurant or be within a two-minute walk to the Google bus, then they’ve just found something that they can give up and that will save them a ton of money.

Naturally, if this couple were only thinking about prices, they would probably have jumped at the chance to buy a two-bedroom, two-bathroom house in Oakland for the list price of $629,000. Or the Berkeley three-bedroom, two-bathroom home priced at $575,000. There are options.

But Ruhan and Ben have been insistent: They want to buy in San Francisco. They can compromise on location, size, parking, age and condition of the property, and other things. But location might well be what can give them the biggest gain for their compromise.

If they were up for being pioneers, and they were willing to face down San Francisco’s ever-present anti-gentrifiers, they might consider buying in one of the City’s less expensive up-and-coming neighborhoods. Forget about doing that in the Tenderloin; for a host of structural and political reasons, the Tenderloin is not going to become Lincoln Park West. But, Mission is attracting many newcomers who are coming in and investing in the neighborhood (to the consternation of some longtime locals, of course). Or they might consider Dog Patch and be right near downtown. Or head out to the far western end of the City, and what they give up by not being near downtown they gain by being near the Pacific Ocean.

Even in pricier neighborhoods such as the Marina, bargains can be found, but probably not without some of those other compromises coming into play. (Forget the yard for $650,000.)

Ben and Ruhan will find a place, but it will probably take them a while to reach the point where they know what they are willing to compromise. When I last heard from them, they were still at the shooting-for-the-moon stage and had not yet come down to earth. When they get here, the good news is that they will still be able to purchase their home in San Francisco.

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