Want a bigger space? Think you can go with a small one? You’re not alone. Welcome to the world of real estate, where each square foot can add thousands of dollars to your mortgage bill. You want a comfortable and manageable space. The question is, how do you go about it?
Invest in a small home, and you can end up feeling anxious in a tight space. Buy a bigger house, and you face management issues like cleaning and repairs.
San Francisco is an expensive city, with home maintenance costs running in the thousands. The median home size in San Francisco is 1,316 square feet. Owning a home here comes with a high price tag, with annual homeownership costs that include property taxes, homeowners insurance, and utility payments that average $22,791 in the SF metro area. That’s an additional $1,899 per month after your mortgage expenses. Keep in mind that the median home value in San Francisco is already above $1.2 million. Many people forget about the maintenance expenses as they consider the space they will need in the future.
How Much Square Footage Do You Really Need?
Buying a house in San Francisco, CA, can feel like planning a visit to Mount Davidson which is the tallest peak here, not the Twin Peak. You can’t just have a bigger house than you need and expect it to work out. You will need a bigger oxygen tank and food supply as well. And it’s tough to reach the peak while carrying additional supplies with you. Just consider living together as a couple. You don’t need to worry about buying in a good school neighborhood. However, you will need to think about that if you have two kids in the future.
What is Your Perspective on a Peaceful Lifestyle?
Your home should add to your comfort. What is your ideal lifestyle in terms of personal choices? Do you want a small and cozy house that requires minimum maintenance and cleaning efforts? Do you have kids and need some playing space?
Around 1/3rd of the San Francisco workforce is working from home. According to recent data, 32.5% of people actually use home offices to continue their professional journey. This trend will continue despite companies trying their best to bring people back to their offices. Should your house have a separate study or work space?
That’s your personal choice. However, you need to reflect on your preferences and think a few times about the potential use of the space you’re acquiring. You will be the one to cherish the place with fond memories. Some people consider the “average” home size, which is good if you’re considering the resale value, but it won’t add to your comfort.
Plan an Astrology Visit: How Do I Figure Out How Much Square Footage I Need?
Look into the silver ball and get a glimpse of your future. What will your lifestyle look like five years from now? Are you planning to have kids? If you have kids, you will need to think about their educational and entertainment activities.
- Do you expect your parents or elderly relatives to live with you in the future?
- Are you planning to rent out additional space in your home?
- What are your expectations of the job market in your field?
- Is it possible that the nature of your job will change soon?
Jokes aside. You don’t need to hire an astrologer before working with a real estate expert. However, you need to spend a day or two analyzing your future. The type of space you need depends on its usability. Given the fluctuating mortgage rates (and increasing home prices), selling a home is not very easy. You need to invest in a home that can accommodate your changing lifestyle and needs.
What is the Future Resale Value of Your Home?
You’re spending hundreds of thousands of dollars on a house. It’s wise to understand the resale value of your San Francisco property. You can invest in a large home, but it might not sell well in the future. Look for good school neighborhoods with proximity to parks.
At the time of writing, home values in San Francisco have gone down by 7.6% compared to December 2023.
The median home price in SF in December 2023 was 13% down compared to December 2022. The current median home value in SF is $1.2 million. Right now, the San Francisco market is headed in a positive direction, with mortgage rates decreasing and improved economic growth in downtown. It’s a competitive real estate market, but some neighborhoods can be overpriced at times. Current home prices are high because of constant appreciation over the last decade. When investing in a home, carefully look at home prices over the last 5 years and ensure you’re making a smart investment. As your real estate agent in San Francisco, I will be happy to evaluate your home and ensure your money is spent on the right property.
Living Expenses in Your New San Francisco House
Let’s grab a pen and paper and think about the normal day-to-day costs. Many of my clients don’t think about these expenses, but they are going to affect your budget in the long run. Let’s start writing:
- Mortgage expenses (Rule of Thumb is 30% of your total income)
- Annual Property repairs and General Maintenance (About 1% of your purchase price)
- Utility costs (Electricity, Water, and Garbage)
All these costs are directly tied to your home’s square footage. A large home costs more, and hence your mortgage bill will go up. General maintenance costs around 1% of the home’s value. So for a median home value of $1.2 million, expect to spend around $12k on annual maintenance costs.
Another thing to note is the energy cost when choosing a home. A bigger house will cost more money in terms of heating and cooling expenses.
San Francisco is an expensive city, with the average home price per square foot just under the $1,000 mark. In December 2023, the price per square foot was $928, which is down from $1,014 per square foot in October 2023.
The cost per square foot has a direct relationship with your homeownership costs and lifestyle. Think carefully and talk to a real estate expert so you can make an informed decision.
I, Haley Zhao, love helping my clients make the right decision considering their lifestyle needs and budget. Contact me (haleysellsthecity@gmail.com) for a free consultation, and let’s find out the right square footage for your needs. From there, I can help you find the right property in your desired neighborhood in San Francisco.
