Okay, so this topic might not be of supreme interest to the casual Napa Valley tourist. Then again, if you come visit and find yourself wondering if you could ever live here, this might be of interest to you.
Thanks to the wonderful timing of my life* combined with the luck of being born into one of the most expensive regions in America (suburban Washington, DC), I have never had the luxury of owning my own home. Having lived in a variety of ridiculously-expensive areas (Montgomery County, Maryland, San Francisco, California, and now Napa), my salary -- no matter how good it seemed -- never afforded me enough money to pay for the overpriced real estate in those areas. Back in 2005, after I had spent years of renting (not because I wanted to, but out of necessity), my father suggested I should look into buying a home. I said "Look, I don't get how these home prices can just keep going up. They have risen 100% in 5 years. It's absurd. Have salaries risen 100% in that time? No. Something's fishy, and I'm not going to buy into this overinflated market." So, I maintained some humility and patience and decided to rent and save money in the meantime.
Now I am finally in a position where I have paid off my college loans (which took TEN YEARS, by the way -- a burden most Baby Boomers never had to deal with) and credit cards and every other debt, and I am employed and somewhat financially stable. Combine that with the current situation of home prices dropping like a rock (but believe it or not, they are still overpriced) and pretty low interest rates, and I figure the time has come to buy a home.
The real estate situation in Napa is interesting. Properties here range from about $200,000 to $28 million, all within a couple dozen miles of each other. In Napa Valley. there are certain hotspots that are particularly desirable -- namely, St. Helena and Yountville (a tourist mecca with some serious destinations like Domaine Chandon and The French Laundry as well as other good restaurants including Thomas Keller's Bouchon and Ad Hoc, Richard Reddington's "Redd", and Bottega by local celebrity chef Michael Chiarello, owner of Chiarelli winery, host of the Food Network show "Easy Entertaining", and founder of "NapaStyle" magazine).
The town of Napa itself, despite being so well-known because of its name, is actually more plebian -- it's where the workers live (if they can even afford it. Many commute up from American Canyon or Vallejo or even across the Bay to the south). So Napa is bigger, has actual chain stores (pretty much nowhere else in Napa Valley does), and has the typical suburban sprawl to an extent. Then again, there is also the downtown area which I covered in a previous post, with the Napa Opera House, upscale living condos, and high-end celebrity-chef restaurants.
So there is quite a range here.
The range I'm looking at is the $300-$350k range. That's really the only range that is truly affordable to me (working in conjunction with my girlfriend of 8 years, Sarah... so we'd combine our incomes) while still maintaining a decent quality of life, safety, comfort, etc. The way I see it is... I currently live in a reasonable apartment with about 1000 sq. ft., nice grounds, swimming pool and hot tub and exercise room, a patio and garden, covered parking, and all in a safe neighborhood, with everything I need literally within a mile or two -- post office, doctor, eye doctor, dentist, hospital, groceries, you name it. So if I pay $1300/month for that (apartment rents here range from about $1000-$1500/mo for a two-bedroom apartment, but if you're looking into it, I'd highly recommend avoiding the ones at around $1000... they tend to be a bit sketchy and simply aren't worth the amount you save), I don't know why anybody would want to give that up and pay more money per month for a significantly lower quality of life... just to say you own a home.
If you look at real estate listings here, it's a pretty sobering representation of reality: almost half of the listings are bank-owned foreclosures, and a great many of ones aren't foreclosed still end up being short sales by people that are about to face foreclosure. Of the 20-30 homes I have looked at (using Redfin, which has proved to be a very useful and easy-to-use service), only ONE has been for sale by the actual occupants and is not a short sale. Every other listing has been a short sale or foreclosure. And my real estate agent filled me in on the other unspoken fact that the banks actually own a lot more vacant homes that aren't even currently listed on the market -- they are just sitting there empty until the banks decide to trickle them out, limiting the number on the market at any given time.
*I was born in 1978 -- too late to enter the workforce when you could find an American job to work at for your whole life, also just a little bit too late to graduate before the Internet economy went bust. Which affected me a lot, with my computer science degree. I hate to break it to the unenlightened, but we folks who are in our early 30s or younger have had to face a world in which there is no job security, in which you can do "everything right" and graduate top of your class, get into a top notch university, study your butt off and graduate cum laude... and still not even be able to get your foot in the door. A lot of people 50+ years old are screaming "age discrimination" these days, but the fact of the matter is that the younger generations are much worse off, and there's not even any laws to protect against age discrimination toward the young.