<prompt> Human: I am a scientist starting a new job in the SF Bay area, and after years of grad school postdoc, im finally in a position to start saving for a home. The problem is that the SF bay area and NYC are the only viable options where both me and my wife can find jobs to our liking. A 20 down payment for a home here is easily upwards of 200K. We are aggressively saving towards that goal, and currently have about 50K saved up for a downpayment. My question is: is this worth it? does it make sense to have a savings account safe money and keep putting whatever you can in there, in the hope of reaching 200K at some point in time in the future, or should we just resign to renting for the forseeable future, and invest that 50K someplace else? We are already maxing out our 401Ks, and we both have some more money in stocks totaling about 6K a yearAssistant: Whether to buy or rent in the bay area is a tough decision that my wife and I went through last year. We ended up buying a 2 bedroom in the city, because we both work in the city and the rent we would be paying would be the same or more than a mortgagehome owners insurance. Plus every buy v. rent calculator we used said to buy. We have owned for a year and the zillow estimate says our house has gained 60 in value obviously a very rough estimate. Hopefully whenever we do sell our house, we will still be in the black by that nice of a margin, which not only is much better than throwing away rent money, but also definitely outperformed the SP500 this past year. Long term, the bay area is a center for biotech and technology, probably the two strongest sectors of the US economy, so hopefully housing will continue to appreciate. Who knows what the future holds though, crashes happen.Keep in mind you can buy a house in the bay area for a lot less than 1m, depending on location and what sort of shape the house is in. Try looking in Oakland, Northern Marin, Half Moon Bay, etc... for deals, and for houses that need work if you are handy or motivated to become handy by a tight budget. The advice about only spending 30 of income on housing just doesnt work for the bay area usually - you should be using 40 as a benchmark. At least that is what people say. But its a personal thing, maybe you are ok living very frugally or maybe you want to travel a lot, its up to you to budget living expenses accordingly.Sounds like you have some time before you can realistically buy. So make the most of it. Try to check in on open houses in neighborhoods you like, compare values to other locations, conditions, etc... We saw 60 open houses we saved the flyers and counted them after we bought, which I feel was a huge advantage because we got a good sense for value of houses in different areas and conditions. Location is hugely important in the bay area, so learn the micro neighborhoods. Also keep in mind that in the bay area it is normal for listing prices to be 20-30 less than what the house is actually sold for, so once you see an open house, wait a month and check back to see what it closed for. Good luck! The whole process scared the hell out of me, and I still have anxiety about it whenever I think about how much I owe the bank - like right now...yikes! :Human: thank you. this was helpful to know. Since you went through this procedure recently, how accurate are zillowtrulia prices? As in, if I see a house for 800K on Zillow, should I assume that the house will eventually be sold for a bit higher than that price?  <response>: My wife and I recently bought a house in the south bay.Our experience was that every place we bid on had at least 5 other bidders, and none of the houses went for less than 15 over asking price most were 20-30 over. By the end I just started mentally adding 25 to any asking price.When you seriously start looking, expect the search to take quite a long time. We looked at 8 houses every weekend for months. I have friends who have been looking for over a year.Expect to get outbid many times. There will be multiple bidders on any home you like, and many of them will be coming with downpayments over 1M. Make a realistic decision about how much you can afford, and what a particular house is worth to you, and dont let a bidding war push you past that point.Get an good agent. Once you decide to make an offer, things move very fast. You need someone working for you that will stay on top of things and is highly available. You also want someone that is working for you instead of just themselves. If you want a recommendation contact me privately and Im happy to give you the name of our agent with whom we were very happy. 