Get A Free Moving Quote
  • All Fields Are Required

  • Hidden
  • MM slash DD slash YYYY
  • Hidden

Celebrating 75 Years Of Moving The Local Bay Area

Buying a House in the Bay Area 💵🏠 | Down Payment Assistance & Bay Area Real Estate Guide

Last Updated on: 22nd February 2024, 08:29 pm

Buying a home is an exhilarating journey that brings its own set of challenges and triumphs. In the notoriously competitive Bay Area housing market, these experiences are amplified. For many, the prospect of owning a home in Silicon Valley, San Francisco, or other Bay Area regions seems like an unattainable dream, given the region’s high property values and intense demand. However, with the right approach and a comprehensive understanding of the process, buying a house in the Bay Area can become a reality.

From setting a budget and getting a mortgage to finally closing the deal, here’s everything you want to know about navigating the complex Bay Area real estate market and what to expect.

Bay Area Real Estate Overview

The Bay Area real estate market is notoriously expensive and surprisingly complex. Demand has outstripped supply for decade, with most low- and middle-class residents priced out of the market completely.

One of the consequences is a relatively low share of single-family homes and a market dominated by co-ops, tenancy-in-common agreements, and condos.

These less traditional ownership models combined with sky-high home prices have also led to complicated Bay Area mortgages and creative financing like “fractional mortgages,” one of the only ways to finance a tenancy-in-common purchase and seller financing.

Finding and buying a home in the Bay Area requires diligent research, strategic planning, and a significant financial investment – not to mention patience.

The good news is Bay Area real estate has cooled a bit thanks to interest rates at 23-year highs and massive tech layoffs. While competition is still fierce, just two years ago, buyers needed to show up with all-cash offers and ready to waive all contingencies. Today, you have a better shot at getting an offer accepted with an inspection, insurance, or financing contingency.

How to Buy a House in the Bay Area

At its core, home buying in the Bay Area is about being proactive, prepared, and well-informed. Here’s a step-by-step guide covering how to buy a home in the Bay Area with tips and resources to make the process more manageable.

Step #1. Determine Your Budget

The foundation of your home-buying journey is your budget. In the Bay Area, where median home prices are among the highest in the nation, a detailed financial assessment is non-negotiable.

Be Prepared for Bay Area Home Prices

Below are median home prices in major Bay Area cities. Note that “condos” in many cities like San Francisco include co-ops and tenancy-in-common (TIC) agreements. Buying a condo in the Bay Area can make homeownership more accessible, but TICs and co-ops can be 10-20% cheaper than condos on average!

Median Bay Area Home Prices by City

  Median home price Median price per square foot Median single-family home price Median condo price
Santa Clara $1,500,500 $951 $1,820,000 $709,000
Sunnyvale $1,480,500 $1,140 $1,900,000 $870,000
San Jose $1,300,000 $833 $1,522,500 $625,000
Fremont $1,292,500 $826 $1,467,500 $696,750
San Francisco $1,177,500 $874 $1,420,000 $982,500
Hayward $830,000 $611 $902,000 $466,000
Oakland $825,000 $565 $950,000 $505,000
Santa Rosa $715,000 $434 $725,500 $410,000
Vallejo $520,000 $358 $530,000 $320,000

Average Bay Area Mortgage Payment & Salary Needed

The average mortgage payment in the Bay Area is $3,603, the highest among the 15 largest metro areas in the country. By comparison, the national average mortgage payment is $1,427, with a median mortgage payment of $1,001. As bad as that sounds, that’s the average amount current homeowners are paying, including people who bought their home decades ago.

What should you expect if you’re buying a home in the Bay Area now? In June 2022, with the average interest rate at 5.78%, the average mortgage payment in San Francisco on a typical home hit $8,117, up 53% year-over-year. In San Jose, the mortgage payment on a typical home increased 57% in a year to $9,136.

According to a 2023 Redfin report, a household needs to earn at least $400,000 per year to afford the median home price in the Bay Area, with typical homes selling for $1.48 million. The San Jose metro area of San Benito and Santa Clara counties fell just a few thousand dollars below the San Francisco metro area, including the city and San Mateo County.

However, this report assumes a mortgage payment of no more than 30% of the buyer’s income and a 20% down payment.

Save for a Down Payment and Closing Costs

Start saving long before you’re ready to buy. Down payments in the Bay Area can range from substantial to outright staggering.

Despite exorbitant Bay Area housing prices – and because of them – Bay Area home buyers put down a higher percentage as a down payment than anywhere else in the country.

The average down payment in the U.S. is 14.7%. The average Bay Area down payment is around 25%.

When you factor in high Bay Area real estate prices, the difference becomes even starker. The national median down payment is $30,400. The typical person buying a home in the Bay Area puts down about 7x more. The average down payment is $235,000 in San Jose. If you’re buying a home in San Francisco, the average down payment is $202,500.

With interest rates higher than they’ve been in decades, a higher down payment is the only way to keep a mortgage affordable. This higher-than-average down payment can also earn a slight interest rate reduction and help buyers qualify for more creative financing options that are sometimes necessary in the region.

Consider All Costs

Your mortgage will likely be just one of the expenses you’ll face as a homeowner. Maintenance, property taxes, insurance, and, if applicable, homeowner association (HOA) or condo association fees should all be included in your budget.

The San Francisco metro area has the highest annual hidden costs of homeownership. The median homeowner pays $22,791 in unexpected costs per year.

HOA and condo fees can range from $200 to more than $1,500 per month, with an average of around $370. Co-ops and TICs usually have lower condo fees and lower property taxes than condos.

Step #2. Research Loan Options & Get Pre-Approved

Once you know how much you can afford to buy, you’re ready to choose the right mortgage and get pre-approved. One of the best tips for buying a house in the Bay Area is getting a pre-approval with full underwriting before house hunting. This in-depth pre-approval process lets you make a stronger purchase offer with the ability to close much faster.

The Bay Area housing market often means turning to less common financing options and mortgage products. Jumbo loans are often needed to buy a house in the Bay Area due to very high home prices. You may need a specialty lender, depending on your circumstances. If you’re buying a co-op or TIC, only certain lenders offer co-op and TIC mortgages. If you receive compensation that includes restricted stock units, search for a lender experienced with underwriting loans with RSUs.

Bay Area Down Payment Assistance

The question of how to afford a house in the Bay Area may sound like the setup to a joke, but there are many down payment assistance programs available to Bay Area home buyers. Here are just a few programs that may put homeownership within reach.

Bay Area Down Payment Assistance Programs

Program Assistance Service Area
NeighborhoodLIFT $25,000 Greater Bay Area
Empower Homebuyers SCC Up to 30% Santa Clara County
Homebuyer Empowerment Loan Program (HELP) Up to 10% Santa Clara County
San Mateo County HEART Up to $182,025 San Mateo County
GSFA Platinum Program Up to 5.5% California
GSFA Golden Opportunities Program Up to 5% California
SF Down Payment Assistance Program (DALP) Up to $500,000 San Francisco
SF City Second Loan Program Up to $500,000 San Francisco
AC Boost Up to $210,000 Alameda County
Oakland Mortgage Assistance Program (MAP) Up to 30% ($75,000) Oakland

One of the most desirable programs is the SF DALP program, which offers assistance as a silent second mortgage. It’s awarded based on a lottery to low- to middle-income first time buyers in San Francisco with an emphasis on first responders and educators.

Most of these programs have income limits. Some are only available if you are a Bay Area first time home buyer.

Step #3. Hire a Bay Area Real Estate Agent & Go House Hunting

With a pre-approval in hand, you’re ready for the next big step: hiring a real estate agent and starting the home search. A licensed real estate agent can guide you through every step of the Bay Area home buying process and help you find a city and home based on your needs. They will give you advice based on their experience, help you make a strong offer, and protect your interests during negotiations with the seller.

As you begin house hunting, focus on your absolute must-haves. Be ready to make an offer immediately when you find a home that fits your needs.

Step #4. Submit Your Purchase Offer

This step is where your preparation and market knowledge are put to the test. In the Bay Area, with its reputation for aggressive bidding wars, crafting a compelling offer is an art form. Your agent will help you act strategically and put together the strongest offer possible. Make sure you don’t get caught up in bidding wars and pay more than you can afford comfortably!

Step #5. Close on Your New House

When you have finally found the home, and your offer has been accepted, you’re ready to close the deal. The closing process involves several steps, including finalizing the mortgage, signing a stack of documents, and transferring the property title into your name.

The escrow process, from the accepted offer to closing, typically takes 30 to 45 days. This usually takes time to perform a title search, have the home appraised and inspected, finalize your loan, and meet any contingencies.

In some Bay Area markets like San Francisco, the timeline is much shorter. With all-cash sales, you may be closing within the week!

Your lender will work with you to finalize your mortgage, and you’ll be asked to provide additional documentation to ensure all requirements are met. You will also sign numerous closing documents, including the mortgage, the title commitment, and the seller’s disclosure statement.

The property transfer will occur at closing, and you’ll receive the keys to your new home. It’s a momentous occasion, marking the culmination of your home-buying journey in the Bay Area.

Buying a home in the Bay Area is a significant milestone that requires patience, perseverance, and a strategic approach. By following this step-by-step guide, you’ll be prepared to tackle the challenges of the Bay Area housing market and emerge as a proud homeowner in one of the world’s most coveted regions.

The friendly Bay Area movers at AMS Relocation are here to help when you’re finally ready to move into your new home. We can handle all the heavy lifting, furniture assembly, and even storage solutions to make moving day as exciting as it should be! Give us a call at (650) 284-2931 to get started.


  • All Fields Are Required

  • MM slash DD slash YYYY

Search by Category

Search For more helpful Resources

Bekins AMS Featured on Designing Spaces

Check Out Our Related posts