jebatty said:
To do this, one needs a home that is affordable (i.e. as small as reasonable, energy efficient, and close to work/life needs to limit transportation costs).
Predicting the future is nearly impossible. Responsibly allocating resources today is possible and will have similar results."
My daughter, who lives in the Bay Area, is looking to buy her first house there. Many, if not most, of the houses there fit these criteria - that is, you can walk easily to the BART (train), walk to stores, etc....and, the houses are small. Of course, given the weather out there, energy costs are low.
Because of all those factors, the prices of houses are through the roof! I'm telling her to consider NOT buying (renting). Even after the so-called Real Estate Crash, here are some examples of housing prices there....
1. Tiny (1000 sq ft) single story house in heavily urban transitional neighborhood (we'd call that a slum....slums look different in Ca. than elsewhere).
$250,000+
2. Same tiny house in Berkeley instead of Oakland (less crime, more "hip")
$400,000+
She's single. She also is quite smart (lawyer and engineer), yet she seems to be buying into the Realtors nonsense about housing being "a good investment". I'm trying to drum it into her head that her first criteria should be that the place should be somewhere she wants to live, and a step up from where she lives now. Unfortunately, that is hard to do - because although she has a basement apartment, it is in the hills of Berkeley and backs up to the Rose Garden (famous park). It is also in walking distance of some major parks which extend deep into the hills.
Anyway, the point is that your CPA is right! The market is starting to understand that a house which is located with access to transportation and other needs...has more value! Of course, the California weather helps a bit with the value too!