Another bay area housing thread..

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Carefreeap
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Re: Another bay area housing thread..

Post by Carefreeap » Sat Jul 29, 2017 11:16 am

thepicard1 wrote:
favoriteagency wrote:
thepicard1 wrote:Any advice bogleheads? What have others in our situation done in the past?


I'd consider RSUs as part of your income. It depends on which company you work for, but the big ones will give you refreshers every year to maintain your expected income level. In other words, if you work for one of those companies, you can probably consider your income as roughly 550K/yr before tax. But I really don't think you need to consider RSUs in this calculation.

Do you have to live on the peninsula? You said you don't have kids -- do you have to live in an area with good schools? If you do choose to have kids in the future can you use the house savings to send them to a private school if necessary? The reason I ask is because 1.7 million seems like an awful lot.

We were in roughly the same boat when we bought last year. Our budget was 800K-1.2M and we ultimately bought for less than 1M. Have you looked around San Jose -- particularly in Willow Glen, the Rose Garden, and the Diridon area? Those are all close to Caltrain so you can quickly get anywhere on the peninsula if you need to. The big companies all have shuttles nearby. Willow Glen schools are actually getting a lot better, so by the time you have kids the public schools could be really great.

Our house is about 1500 sq feet 3/2, completely remodeled, lots of amenities (including AC), in a transitional neighborhood with great neighbors. Our mortgage + taxes + insurance is less than what we would pay to rent a similar house in the same area. We can afford the mortgage on one of our salaries (without considering RSUs). We have a nice yard for the dog. So far it's been a great decision and our quality of life has improved substantially since we stopped renting.

My advice on buying would be to pick some areas in your price range, and then be very patient. Sometimes things come up that are in really great shape but are staged poorly, or have minor cosmetic deficiencies that make them hard to sell. Believe it or not, buyers in the Bay Area (particularly San Jose) are a picky bunch -- if something doesn't look perfect during an open house, it could be the case that the place gets no offers. Also, look at buying near the end of the year, September -- December. There was a bit of a lull last year, and our real estate agents told us that happens every year.

Best of luck to you!


Thank you that's helpful. We really have only been looking in the Mountain view, Sunnyvale area. San Jose homes are definitely cheaper by a few hundred thousand, which means they're in reach now. One reason for trying to stay further north is because we've heard that the prices are "stickier" should there be a downturn.


Mid Pen location near Caltrain would be my choice for job flexibility. When we moved to the Bay Area in 1990 DH was working in San Mateo. I got a (non tech) job in the City. Over a 13 period of time his job location went from San Mateo, Redwood Shores, Burlingame and ended up in SF. Mine went from SF to the Coast (part time consulting gig) and then to San Carlos before we moved out of State and then out of the Country.

All joking aside I'd PM Watchnerd and get an early viewing. A 3/2 1400 sq.ft. house sounds like a great starter home.

chuppi
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Re: Another bay area housing thread..

Post by chuppi » Sat Jul 29, 2017 12:17 pm

thepicard1 wrote:Hi bogleheads,

Have a question and would like some boglehead advice on how to value RSUs in the determination to buy a house in the bay area.

About us: Trying to figure out how to buy a house in the bay area, an astronomically high COL area. Our decisions are whether to buy now what we can afford, wait, or continue to rent.
  • we both work for a tech companies in the bay area (highly stable), both software engineers
  • income around 190k and 120k, plus around 15% bonus (~30k and 10k respectively). All in is approximately $350k before tax
  • 401k in various accounts - ~$200k total
  • Student loans, ~$150k total (paying off at approximately $2000/month)
  • Savings: ~$400k in cash
  • RSUs: At current valuation, ~$200k/year (after tax is ~$120k)
  • No kids, cars paid off, no other expenses or debts
  • Both husband/wife in early 30s
  • Both frugal



We are in the east bay. We earn a little less but comparable. Late 30s/early 40s with 2 kids.
Have a mortgage of $4250/month (15year fixed) and ~$10K property tax per year.
Kids go to preschool and daycare now.

Monthly
Take home ~13K
4250 - mortgage
900 - property tax
3000 - childcare school (3 and 5 now). This will drop to 1000 in a couple of years. We will use the difference in travel/experience
3-4K - all other expenses
I am not including any home maintenance and other expenses here. Also no car loan payment because mine are paid off.

I don't see much savings (other than max 401K and Roth) in my current situation.
Risk of buying an expensive house is that you won't be left with money for anything else. Don't forget to factor that in.

prettybogle
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Re: Another bay area housing thread..

Post by prettybogle » Sat Jul 29, 2017 12:30 pm

chuppi wrote:
thepicard1 wrote:Hi bogleheads,

Have a question and would like some boglehead advice on how to value RSUs in the determination to buy a house in the bay area.

About us: Trying to figure out how to buy a house in the bay area, an astronomically high COL area. Our decisions are whether to buy now what we can afford, wait, or continue to rent.
  • we both work for a tech companies in the bay area (highly stable), both software engineers
  • income around 190k and 120k, plus around 15% bonus (~30k and 10k respectively). All in is approximately $350k before tax
  • 401k in various accounts - ~$200k total
  • Student loans, ~$150k total (paying off at approximately $2000/month)
  • Savings: ~$400k in cash
  • RSUs: At current valuation, ~$200k/year (after tax is ~$120k)
  • No kids, cars paid off, no other expenses or debts
  • Both husband/wife in early 30s
  • Both frugal



We are in the east bay. We earn a little less but comparable. Late 30s/early 40s with 2 kids.
Have a mortgage of $4250/month (15year fixed) and ~$10K property tax per year.
Kids go to preschool and daycare now.

Monthly
Take home ~13K
4250 - mortgage
900 - property tax
3000 - childcare school (3 and 5 now). This will drop to 1000 in a couple of years. We will use the difference in travel/experience
3-4K - all other expenses
I am not including any home maintenance and other expenses here. Also no car loan payment because mine are paid off.

I don't see much savings (other than max 401K and Roth) in my current situation.
Risk of buying an expensive house is that you won't be left with money for anything else. Don't forget to factor that in.


chuppi, that is very close balance sheet. Basically, other than maxing your 401k, roth, nothing left to save ? I guess your bay area home is investment then - if tech continues to do well, it may well be a better investment than index investing.

chuppi
Posts: 98
Joined: Sat Jun 16, 2012 9:47 am

Re: Another bay area housing thread..

Post by chuppi » Sat Jul 29, 2017 1:05 pm

prettybogle wrote:
chuppi wrote:
thepicard1 wrote:Hi bogleheads,

Have a question and would like some boglehead advice on how to value RSUs in the determination to buy a house in the bay area.

About us: Trying to figure out how to buy a house in the bay area, an astronomically high COL area. Our decisions are whether to buy now what we can afford, wait, or continue to rent.
  • we both work for a tech companies in the bay area (highly stable), both software engineers
  • income around 190k and 120k, plus around 15% bonus (~30k and 10k respectively). All in is approximately $350k before tax
  • 401k in various accounts - ~$200k total
  • Student loans, ~$150k total (paying off at approximately $2000/month)
  • Savings: ~$400k in cash
  • RSUs: At current valuation, ~$200k/year (after tax is ~$120k)
  • No kids, cars paid off, no other expenses or debts
  • Both husband/wife in early 30s
  • Both frugal



We are in the east bay. We earn a little less but comparable. Late 30s/early 40s with 2 kids.
Have a mortgage of $4250/month (15year fixed) and ~$10K property tax per year.
Kids go to preschool and daycare now.

Monthly
Take home ~13K
4250 - mortgage
900 - property tax
3000 - childcare school (3 and 5 now). This will drop to 1000 in a couple of years. We will use the difference in travel/experience
3-4K - all other expenses
I am not including any home maintenance and other expenses here. Also no car loan payment because mine are paid off.

I don't see much savings (other than max 401K and Roth) in my current situation.
Risk of buying an expensive house is that you won't be left with money for anything else. Don't forget to factor that in.


chuppi, that is very close balance sheet. Basically, other than maxing your 401k, roth, nothing left to save ? I guess your bay area home is investment then - if tech continues to do well, it may well be a better investment than index investing.


You are right. I cannot save anything other than 401K an Roth. I am not looking at the house as an investment because I will likely stay here for a long long time. I just want to pay it off before retirement.
I got lucky with the housing situation when I bought my first house in 2010. I was able to put aside a good chunk in retirement account before the kids and before I bought my current house. So from my calculation, I can manage without savings going forward.

So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.

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watchnerd
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Re: Another bay area housing thread..

Post by watchnerd » Sat Jul 29, 2017 1:16 pm

chuppi wrote:So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.


It's not as if this is some kind of fait accompli or iron law.

My mortgage for my house in San Mateo was ~$1800/month, cheaper than when we were renting an apartment, and less than half of what we'd pay to rent a house in our neighborhood ($3500-4000/month).

Then again, we put 40% down, which, IMHO, was well worth it because we could continue savings as planned.
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

chuppi
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Re: Another bay area housing thread..

Post by chuppi » Sat Jul 29, 2017 1:39 pm

watchnerd wrote:
chuppi wrote:So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.


It's not as if this is some kind of fait accompli or iron law.

My mortgage for my house in San Mateo was ~$1800/month, cheaper than when we were renting an apartment, and less than half of what we'd pay to rent a house in our neighborhood ($3500-4000/month).

Then again, we put 40% down, which, IMHO, was well worth it because we could continue savings as planned.


Sorry. My comment was not to discourage people from buying the house especially in the bay area. I bought a house just last year. I bought it for 900K and I was pre approved for 1.7K.
Even though I have a high mortgage payment (15 year payment). My interest and property tax combined is 2100 per month which is less than the rent that I might pay for a comparable house.
Just wanted to point out the expenses involved especially in a 1.7million house. It is easy to overlook property tax, and any maintenance and other expenses that might come with the growing family. Just be aware of all of it and avoid surprises.

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watchnerd
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Re: Another bay area housing thread..

Post by watchnerd » Sat Jul 29, 2017 1:53 pm

Carefreeap wrote:
thepicard1 wrote:
favoriteagency wrote:
thepicard1 wrote:Any advice bogleheads? What have others in our situation done in the past?


I'd consider RSUs as part of your income. It depends on which company you work for, but the big ones will give you refreshers every year to maintain your expected income level. In other words, if you work for one of those companies, you can probably consider your income as roughly 550K/yr before tax. But I really don't think you need to consider RSUs in this calculation.

Do you have to live on the peninsula? You said you don't have kids -- do you have to live in an area with good schools? If you do choose to have kids in the future can you use the house savings to send them to a private school if necessary? The reason I ask is because 1.7 million seems like an awful lot.

We were in roughly the same boat when we bought last year. Our budget was 800K-1.2M and we ultimately bought for less than 1M. Have you looked around San Jose -- particularly in Willow Glen, the Rose Garden, and the Diridon area? Those are all close to Caltrain so you can quickly get anywhere on the peninsula if you need to. The big companies all have shuttles nearby. Willow Glen schools are actually getting a lot better, so by the time you have kids the public schools could be really great.

Our house is about 1500 sq feet 3/2, completely remodeled, lots of amenities (including AC), in a transitional neighborhood with great neighbors. Our mortgage + taxes + insurance is less than what we would pay to rent a similar house in the same area. We can afford the mortgage on one of our salaries (without considering RSUs). We have a nice yard for the dog. So far it's been a great decision and our quality of life has improved substantially since we stopped renting.

My advice on buying would be to pick some areas in your price range, and then be very patient. Sometimes things come up that are in really great shape but are staged poorly, or have minor cosmetic deficiencies that make them hard to sell. Believe it or not, buyers in the Bay Area (particularly San Jose) are a picky bunch -- if something doesn't look perfect during an open house, it could be the case that the place gets no offers. Also, look at buying near the end of the year, September -- December. There was a bit of a lull last year, and our real estate agents told us that happens every year.

Best of luck to you!


Thank you that's helpful. We really have only been looking in the Mountain view, Sunnyvale area. San Jose homes are definitely cheaper by a few hundred thousand, which means they're in reach now. One reason for trying to stay further north is because we've heard that the prices are "stickier" should there be a downturn.


Mid Pen location near Caltrain would be my choice for job flexibility. When we moved to the Bay Area in 1990 DH was working in San Mateo. I got a (non tech) job in the City. Over a 13 period of time his job location went from San Mateo, Redwood Shores, Burlingame and ended up in SF. Mine went from SF to the Coast (part time consulting gig) and then to San Carlos before we moved out of State and then out of the Country.

All joking aside I'd PM Watchnerd and get an early viewing. A 3/2 1400 sq.ft. house sounds like a great starter home.


One of the reasons we love(d) our neighborhood is its walkability, including to a CalTrain station and Trader Joe's.
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

Traveler
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Re: Another bay area housing thread..

Post by Traveler » Sat Jul 29, 2017 2:25 pm

I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost. The salaries don't make up for the housing cost so in effect, one pays to live there. I also question if ALL tech jobs in the bay area are of the "glamorous" nature or if some are the apparently crappy Applebee's job referenced above.

Disclaimer: I'm not in tech and work in a fortune 100 company in Atlanta where the COL is reasonable and salaries aren't bad either.

Regarding the question about RSUs, I wouldn't include them but you know your companies better than any of us and the risk of them fluctuating or even going away in a downturn.

hoops777
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Re: Another bay area housing thread..

Post by hoops777 » Sat Jul 29, 2017 2:27 pm

Looks like watchnerd should hook up with the op and save the op some money :D
K.I.S.S........so easy to say so difficult to do.

hoops777
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Re: Another bay area housing thread..

Post by hoops777 » Sat Jul 29, 2017 2:38 pm

Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost. The salaries don't make up for the housing cost so in effect, one pays to live there. I also question if ALL tech jobs in the bay area are of the "glamorous" nature or if some are the apparently crappy Applebee's job referenced above.

Disclaimer: I'm not in tech and work in a fortune 100 company in Atlanta where the COL is reasonable and salaries aren't bad either.

Regarding the question about RSUs, I wouldn't include them but you know your companies better than any of us and the risk of them fluctuating or even going away in a downturn.

I guess the Bay Area is seen as a more desireable place to live with the weather and all the things to do.It is of course an individual choice.Of course there are less expenses places to live where you would be wealthier even making less money.I lived in the Phoenix area for 3 years and would have no problem moving back,but it is not the Bay Area.I could sell my modest little place tomorrow,buy a nicer place in the Phoenix area and bank an extra 500,000 which would give us a totally worry free retirement with all the travel we could ever want.Lot of things have to be considered.
K.I.S.S........so easy to say so difficult to do.

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watchnerd
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Re: Another bay area housing thread..

Post by watchnerd » Sat Jul 29, 2017 2:54 pm

Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost.


It's like living in NYC if you're in finance, LA if you're in entertainment, or DC if you're in politics. It's about number of opportunities. It's the nexus.
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

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watchnerd
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Re: Another bay area housing thread..

Post by watchnerd » Sat Jul 29, 2017 2:56 pm

hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D


The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:
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Carefreeap
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Re: Another bay area housing thread..

Post by Carefreeap » Sat Jul 29, 2017 3:58 pm

hoops777 wrote:
Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost. The salaries don't make up for the housing cost so in effect, one pays to live there. I also question if ALL tech jobs in the bay area are of the "glamorous" nature or if some are the apparently crappy Applebee's job referenced above.

Disclaimer: I'm not in tech and work in a fortune 100 company in Atlanta where the COL is reasonable and salaries aren't bad either.

Regarding the question about RSUs, I wouldn't include them but you know your companies better than any of us and the risk of them fluctuating or even going away in a downturn.

I guess the Bay Area is seen as a more desireable place to live with the weather and all the things to do.It is of course an individual choice.Of course there are less expenses places to live where you would be wealthier even making less money.I lived in the Phoenix area for 3 years and would have no problem moving back,but it is not the Bay Area.I could sell my modest little place tomorrow,buy a nicer place in the Phoenix area and bank an extra 500,000 which would give us a totally worry free retirement with all the travel we could ever want.Lot of things have to be considered.


You've got it!

We moved to the greater Phoenix area (our little AZ town is surrounded by Far North Scottsdale) from the Bay Area in 2003. We enjoyed our six years there and still own the house. We initially bought thinking it would be a great retirement house. What we found was that while your housing dollar goes further the rest of your costs really don't. You spend more on A/C and heat because the desert is both hotter and colder than the coastal Bay Area. Add in the typical stupid Californian's habit of spending almost of their housing $$$ to buy a bigger and better house (which of course costs even more to heat, cool, clean +a pool to maintain) and you understand the insanity. Plus almost all of our friends had a second home somewhere. Therefore the nice $700k house + $300k for a cabin or beach condo meant two sets of utility bills, et cetera. From what I observed, most Californians do not save money moving to AZ, they just change their lifestyle to keep spending what they make.

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Hyperborea
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Re: Another bay area housing thread..

Post by Hyperborea » Sat Jul 29, 2017 5:46 pm

chuppi wrote:
watchnerd wrote:
chuppi wrote:So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.


It's not as if this is some kind of fait accompli or iron law.

My mortgage for my house in San Mateo was ~$1800/month, cheaper than when we were renting an apartment, and less than half of what we'd pay to rent a house in our neighborhood ($3500-4000/month).

Then again, we put 40% down, which, IMHO, was well worth it because we could continue savings as planned.


Sorry. My comment was not to discourage people from buying the house especially in the bay area. I bought a house just last year. I bought it for 900K and I was pre approved for 1.7K.
Even though I have a high mortgage payment (15 year payment). My interest and property tax combined is 2100 per month which is less than the rent that I might pay for a comparable house.
Just wanted to point out the expenses involved especially in a 1.7million house. It is easy to overlook property tax, and any maintenance and other expenses that might come with the growing family. Just be aware of all of it and avoid surprises.


I think the tight budget happens to all of us when we buy. When I bought my first (and current) place in the Bay Area we were tight. We maxed out the obvious accounts (401k, IRA for my wife, ESPP) but beyond that there wasn't much else for savings. However, over time my salary grew and the house became a smaller percentage of my income. If you are early enough in your career then the likely course is that your income will rise. Even if you just stay even with inflation, much of that housing cost will stay fixed and decrease as a percentage. For those not in the Bay Area (or California) the property tax will not increase more than 2% and less if inflation is lower, so those too should drop as a percentage of income and are also income tax deductible. Given that and the refinances as rates dropped, I'm at the point where everything all in on a monthly basis is about what we paid for the terrible little apartment (60's 4-plex with no insulation) we were renting just before we bought.

I wouldn't suggest a 15 year mortgage though. If the OP has to go on one salary that could make it harder. If they want to pay off quicker take a 30 year and pay it like a 15 year - if they need the money because of job loss or kid expenses they could drop the extra payments easily. Depending on their situation, I might even suggest a 7/1 ARM. The rates can be lower enough and the max caps on the increases limited enough to make the break even point maybe 10 years out IF interest rates climbed to their max levels. Most people sell within that time frame. As well, the OP and his wife being in their early careers they should increase their income and outside savings to be able to pay it off by that point or at least pay it down and refinance. They should definitely model it out though. Don't use the lower interest rate of an ARM to afford more house - use it to pay less for the same house.

sfchris
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Re: Another bay area housing thread..

Post by sfchris » Sun Jul 30, 2017 12:15 pm

watchnerd wrote:
Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost.


It's like living in NYC if you're in finance, LA if you're in entertainment, or DC if you're in politics. It's about number of opportunities. It's the nexus.


I would add that like NYC where highly talented investment bankers can have salaries where the sky is the limit, and actors where major success may mean global fame, the bay area is the one place where top performers can be compensated like that while being able to be very picky about what they work on.

However, if you are just an average tech worker bee, you probably won't make a lot more than you would in the other cities he mentioned, particularly when cost of living is taken into consideration. I think this is one reason why people from outside the area don't understand the situation - they may know a lot of average workerbee types making pretty good money in tech but don't know the kinds of people heading up projects at Google.

I myself am a workerbee type and am not making anywhere near the kind of money talked about here despite being nearly almost 2 decades older and living in the bay area.

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watchnerd
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Re: Another bay area housing thread..

Post by watchnerd » Sun Jul 30, 2017 12:36 pm

sfchris wrote:
watchnerd wrote:
Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost.


It's like living in NYC if you're in finance, LA if you're in entertainment, or DC if you're in politics. It's about number of opportunities. It's the nexus.


I would add that like NYC where highly talented investment bankers can have salaries where the sky is the limit, and actors where major success may mean global fame, the bay area is the one place where top performers can be compensated like that while being able to be very picky about what they work on.


Not to mention the hefty recruitment / poaching angle that accelerates wage growth by offering not only wage increases, but cash sign-on bonuses, extra stock, etc, when one starts to build develop a reputation.

My parents (a retired teacher and a retired nurse, respectively) have found the six figure sign-on bonuses in the hot sectors to be unfathomable. "Wait...so they give this to you before you start working?" "Well, not quite, but within the first 30 days. And you have to pay it back if you quit before 1 year." "...is this in writing?"
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Re: Another bay area housing thread..

Post by simplesimon » Sun Jul 30, 2017 1:39 pm

Traveler wrote:I see these Bay Area housing posts and I cringe. More power to the people that live there. What I find hard to believe is that there are no "glamorous" tech jobs in places such as Denver, Phoenix, Austin, Atlanta, Research Triangle, Dallas, Minneapolis or even Chicago where one could presumably buy a pretty nice house for $500K or less with a reasonable commute. Even if the household income dropped to $200K, in these places, one could buy a nice house and still save and actually retire one day. Other than high salaries and it being a tech mecca, I don't understand the appeal of the bay area given the cost. The salaries don't make up for the housing cost so in effect, one pays to live there. I also question if ALL tech jobs in the bay area are of the "glamorous" nature or if some are the apparently crappy Applebee's job referenced above.


Tech jobs do exist in other major hubs. There might not be as many, but the opportunities are there. I was born and raised in San Jose and worked in the Bay Area in biotech until I moved to the east coast for grad school and work in finance. Some people in Bay Area are in their own bubble and don't care what's happening outside of it. Your point about "paying to live there" is valid.

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Re: Another bay area housing thread..

Post by Carefreeap » Mon Jul 31, 2017 9:23 am

watchnerd wrote:
hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D


The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:


Continued thread hijack; how did the open house do and how many offers?

Around my 'hood the agents seem to do two sets of open house weekends and then look at offers.

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Re: Another bay area housing thread..

Post by watchnerd » Mon Jul 31, 2017 9:32 am

Carefreeap wrote:
watchnerd wrote:
hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D


The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:


Continued thread hijack; how did the open house do and how many offers?

Around my 'hood the agents seem to do two sets of open house weekends and then look at offers.


Hasn't happened yet...it's this Fri.
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Re: Another bay area housing thread..

Post by watchnerd » Sat Aug 12, 2017 11:16 am

Carefreeap wrote:
Mon Jul 31, 2017 9:23 am
watchnerd wrote:
hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D
The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:
Continued thread hijack; how did the open house do and how many offers?

Around my 'hood the agents seem to do two sets of open house weekends and then look at offers.
Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
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itstoomuch
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Re: Another bay area housing thread..

Post by itstoomuch » Sat Aug 12, 2017 1:00 pm

Seattle area, it's 4days. List Thursday. Open house Sat/Sun. Awarded Monday by 6pm.
We won the bidding :oops: :annoyed :confused
She really, Really wanted it :x
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Re: Another bay area housing thread..

Post by chuppi » Sat Aug 12, 2017 9:46 pm

watchnerd wrote:
Sat Aug 12, 2017 11:16 am

Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
I listed my condo last year in what I thought was a hot market. There was a lot of interest but we got just one offer the Monday after listing. It was the highest in the complex and I was glad I got at-least one offer. I am sure our agent gave the buyer the impression that there were multiple offers and we choose him. Even with one offer, we asked them to increase it by a few thousand and they did. Everything went through fine.

When I bought the house, listing agent told my agent (they knew each other) that there are 7-8 offers. I have no way of knowing that. I increased my offer 3 times before my offer was accepted. I almost backed off when I found roof problem and they were not willing to give back as much money as I want. But they didn't budge. It is possible that I was the only one but I will never know.

Realtors have vested interest in hyping up things.

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Re: Another bay area housing thread..

Post by whodatheads » Sun Aug 13, 2017 5:41 am

chuppi wrote:
Sat Aug 12, 2017 9:46 pm
watchnerd wrote:
Sat Aug 12, 2017 11:16 am

Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
I listed my condo last year in what I thought was a hot market. There was a lot of interest but we got just one offer the Monday after listing. It was the highest in the complex and I was glad I got at-least one offer. I am sure our agent gave the buyer the impression that there were multiple offers and we choose him. Even with one offer, we asked them to increase it by a few thousand and they did. Everything went through fine.

When I bought the house, listing agent told my agent (they knew each other) that there are 7-8 offers. I have no way of knowing that. I increased my offer 3 times before my offer was accepted. I almost backed off when I found roof problem and they were not willing to give back as much money as I want. But they didn't budge. It is possible that I was the only one but I will never know.

Realtors have vested interest in hyping up things.
What is the prevailing commissions seller and buyer agents get, 3%/3% or 2.5%/2.5%? And is it common that the buyer negotiates to get some of the buyer agent's commission back?

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Re: Another bay area housing thread..

Post by watchnerd » Sun Aug 13, 2017 8:55 am

chuppi wrote:
Sat Aug 12, 2017 9:46 pm
watchnerd wrote:
Sat Aug 12, 2017 11:16 am

Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
I listed my condo last year in what I thought was a hot market. There was a lot of interest but we got just one offer the Monday after listing. It was the highest in the complex and I was glad I got at-least one offer. I am sure our agent gave the buyer the impression that there were multiple offers and we choose him. Even with one offer, we asked them to increase it by a few thousand and they did. Everything went through fine.

When I bought the house, listing agent told my agent (they knew each other) that there are 7-8 offers. I have no way of knowing that. I increased my offer 3 times before my offer was accepted. I almost backed off when I found roof problem and they were not willing to give back as much money as I want. But they didn't budge. It is possible that I was the only one but I will never know.

Realtors have vested interest in hyping up things.
In our case, we had 12 offers in writing. So unless they're engaging in document forgery, I don't think it was false hype.
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Re: Another bay area housing thread..

Post by Carefreeap » Sun Aug 13, 2017 10:01 pm

watchnerd wrote:
Sat Aug 12, 2017 11:16 am
Carefreeap wrote:
Mon Jul 31, 2017 9:23 am
watchnerd wrote:
hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D
The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:
Continued thread hijack; how did the open house do and how many offers?

Around my 'hood the agents seem to do two sets of open house weekends and then look at offers.
Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
OK I know you can't/shouldn't tell us the price until it closes but did you take the highest offer or did you choose another offer based on other reasons; e.g. all cash, a good fit for the neighborhood, et cetera?

I ask because I recently sold my mother's condo down in the San Diego area. It never went on the market because I sold to the folks who owned the unit across the hall. They are wonderful people who love the area and will live in it for a long time. I really did not want someone who would rent it out to college students.

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Re: Another bay area housing thread..

Post by watchnerd » Thu Aug 17, 2017 9:39 am

Carefreeap wrote:
Sun Aug 13, 2017 10:01 pm
watchnerd wrote:
Sat Aug 12, 2017 11:16 am
Carefreeap wrote:
Mon Jul 31, 2017 9:23 am
watchnerd wrote:
hoops777 wrote:Looks like watchnerd should hook up with the op and save the op some money :D
The house should hit the MLS on Friday in the 19th Ave Park neighborhood of San Mateo. Open house is Fri, Sat, & Sun, I believe. :? :wink:
Continued thread hijack; how did the open house do and how many offers?

Around my 'hood the agents seem to do two sets of open house weekends and then look at offers.
Update:

The house was on the market for 7 days, at which point we told people they had to have offers in.

We had 12 offers.
OK I know you can't/shouldn't tell us the price until it closes but did you take the highest offer or did you choose another offer based on other reasons; e.g. all cash, a good fit for the neighborhood, et cetera?

I ask because I recently sold my mother's condo down in the San Diego area. It never went on the market because I sold to the folks who owned the unit across the hall. They are wonderful people who love the area and will live in it for a long time. I really did not want someone who would rent it out to college students.
I'll tell when it closes.
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Re: Another bay area housing thread..

Post by ryman554 » Thu Aug 17, 2017 11:03 am

watchnerd wrote:
Thu Aug 17, 2017 9:39 am
I'll tell when it closes.
More than three days after closing, I hope.....

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Re: Another bay area housing thread..

Post by watchnerd » Thu Aug 17, 2017 12:00 pm

ryman554 wrote:
Thu Aug 17, 2017 11:03 am
watchnerd wrote:
Thu Aug 17, 2017 9:39 am
I'll tell when it closes.
More than three days after closing, I hope.....
What's the significance of 3 days?
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Re: Another bay area housing thread..

Post by ryman554 » Thu Aug 17, 2017 3:00 pm

watchnerd wrote:
Thu Aug 17, 2017 12:00 pm
ryman554 wrote:
Thu Aug 17, 2017 11:03 am
watchnerd wrote:
Thu Aug 17, 2017 9:39 am
I'll tell when it closes.
More than three days after closing, I hope.....
What's the significance of 3 days?
Apparently, the buyer still has three days after close of escrow to cancel the sale. States may vary, but just in case the buyer is looking here... =)

Carefreeap
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Re: Another bay area housing thread..

Post by Carefreeap » Thu Aug 17, 2017 5:36 pm

ryman554 wrote:
Thu Aug 17, 2017 3:00 pm
watchnerd wrote:
Thu Aug 17, 2017 12:00 pm
ryman554 wrote:
Thu Aug 17, 2017 11:03 am
watchnerd wrote:
Thu Aug 17, 2017 9:39 am
I'll tell when it closes.
More than three days after closing, I hope.....
What's the significance of 3 days?
Apparently, the buyer still has three days after close of escrow to cancel the sale. States may vary, but just in case the buyer is looking here... =)
Please quote your source.

fareastwarriors
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Re: Another bay area housing thread..

Post by fareastwarriors » Thu Aug 17, 2017 6:03 pm

ryman554 wrote:
Thu Aug 17, 2017 3:00 pm
watchnerd wrote:
Thu Aug 17, 2017 12:00 pm
ryman554 wrote:
Thu Aug 17, 2017 11:03 am
watchnerd wrote:
Thu Aug 17, 2017 9:39 am
I'll tell when it closes.
More than three days after closing, I hope.....
What's the significance of 3 days?
Apparently, the buyer still has three days after close of escrow to cancel the sale. States may vary, but just in case the buyer is looking here... =)

https://www.avvo.com/legal-answers/does ... 98278.html

likashing
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Re: Another bay area housing thread..

Post by likashing » Fri Aug 18, 2017 3:56 pm

watchnerd wrote:
Sat Jul 29, 2017 1:16 pm
chuppi wrote: So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.
It's not as if this is some kind of fait accompli or iron law.

My mortgage for my house in San Mateo was ~$1800/month, cheaper than when we were renting an apartment, and less than half of what we'd pay to rent a house in our neighborhood ($3500-4000/month).

Then again, we put 40% down, which, IMHO, was well worth it because we could continue savings as planned.
chuppi is talking about buying a house in 2017 price.

Your $1800/month mortgage, assuming 3.5% 30-year fixed, means your loan size was only $400k. 40% down means you bought the house at ~$667k. Where can you find a detached SFH in San Mateo for $667k now? You probably benefit from Prop 13 where your property tax basis is off a slight higher amount over your purchase price.

I totally agree with chuppi's analysis. Property tax is already 1.2%. Let's round it up to 2% running cost including maintenance. I have followed rental prices a lot lately and some rental yield is now below 3%. Buyers need to decide whether it is still a good time to buy when interest rate is at all time low, bay area income at all time high, and housing prices at all time high, with rents softening.

Luckily I don't need to make this decision as I bought in 2009, and I was ready to buy in 2005-06, but sat through the bubble until 2009.

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Re: Another bay area housing thread..

Post by likashing » Fri Aug 18, 2017 4:41 pm

chuppi wrote:
Sat Jul 29, 2017 1:39 pm
watchnerd wrote:
chuppi wrote: So to the OP, I want to point out that housing expenses will suck up everything even from a high income. Rents seem expensive at 3K per month. But property tax alone can be 2K per month once you buy a 1.7Mil house.
It's not as if this is some kind of fait accompli or iron law.

My mortgage for my house in San Mateo was ~$1800/month, cheaper than when we were renting an apartment, and less than half of what we'd pay to rent a house in our neighborhood ($3500-4000/month).

Then again, we put 40% down, which, IMHO, was well worth it because we could continue savings as planned.
Sorry. My comment was not to discourage people from buying the house especially in the bay area. I bought a house just last year. I bought it for 900K and I was pre approved for 1.7K.
Even though I have a high mortgage payment (15 year payment). My interest and property tax combined is 2100 per month which is less than the rent that I might pay for a comparable house.
Just wanted to point out the expenses involved especially in a 1.7million house. It is easy to overlook property tax, and any maintenance and other expenses that might come with the growing family. Just be aware of all of it and avoid surprises.
I am also surprised that the number of ppl and agents not knowing most people who qualify for $1.7m houses as W2 workers, cannot even deduct property taxes anymore as they are deep in AMT.

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