New(ish) attending physicians in the Bay Area: Housing

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somekevinguy
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New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 11:14 am

DW and I are both physicians, <5 years out from training. As a result of WCI and following BH philosophy, we're on solid financial ground with no debts and about 500K available for a down payment on a house.

That being said, the housing market here in the bay area is crazy with a 4br 2ba 2000 sq foot home easily going for 2.5-3M.

I wanted to get a sense of how other newer attending physicians BH's in the bay area are dealing with housing. Are you buying, have you bought, what % down did you put, what % of net pay does PITI represent, how has it impacted your finances etc? I feel as though it is pretty challenging competing with all the tech money/RSU's etc but not sure if that is just my perception.

Thanks in advance!

GCD
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by GCD » Sat May 12, 2018 11:42 am

Not a physician, but I used to live in the Bay Area. A lot depends on where you have to work and how flexible your hours are so you can take advantage of traffic patterns. I have no idea how that will work for you two. Traffic management in the Bay Area very much affects what you can afford.

I only mention that because my old 5 bedroom, 3 bath, 3000+ sq ft house in Dublin (East Bay) is now valued at $1.3 million. But depending on where you are working and traffic patterns, certain areas will be completely unrealistic for you.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 12:11 pm

GCD wrote:
Sat May 12, 2018 11:42 am
Not a physician, but I used to live in the Bay Area. A lot depends on where you have to work and how flexible your hours are so you can take advantage of traffic patterns. I have no idea how that will work for you two. Traffic management in the Bay Area very much affects what you can afford.

I only mention that because my old 5 bedroom, 3 bath, 3000+ sq ft house in Dublin (East Bay) is now valued at $1.3 million. But depending on where you are working and traffic patterns, certain areas will be completely unrealistic for you.
Understood and agree. Unfortunately, we're relatively limited to the peninsula/northern part of the south bay.

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mickeyd
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by mickeyd » Sat May 12, 2018 1:59 pm

BH's in the bay area are dealing with housing
Which "bay area" are you referring to "Tampa bay" "Corpus Christi bay"?
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masonstone
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by masonstone » Sat May 12, 2018 2:02 pm

Only one Bay Area is that expensive 😜

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ram
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by ram » Sat May 12, 2018 2:23 pm

We are a physician couple living in rural midwest (housing cost opposite of yours). If we were considering jobs in California we would approach it this way:
1. Lets suppose each of you makes 250K. (total 500 K)
2. Lets assume you would have bought a 1 million house in other parts of the country and in bay area you have to pay 3M for a decent house.
3. You plan to stay in the area for 10 yrs and then move.

This means because of geographic location you have to pay an excess of 2 M or ( 1 M/spouse/10yrs ) = 100K/spouse/year (forget compounding for now).

I would therefore interpret it as a salary of 150K cash and restricted stock of 100K in "Bay area real estate company" This is encashable in 10 yrs. If the real estate market is booming at that time then you make a killing. In worst case scenario the stock is worth zero. I am sure you have friends working in tech who actually have such a pay package.

Then I would compare the bay area job with other area jobs.

(You can decide for yourself what component of the house price you want to consider speculative component and make your own calculations. You can also calculate current value of future money to get more realistic impact on salary components. The duration that you want to be there is the duration of the restriction on sale.
If I am going to live there long term I would buy the house and hope for the best when it is time to sell.)
Last edited by ram on Sat May 12, 2018 2:44 pm, edited 2 times in total.
Ram

GCD
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by GCD » Sat May 12, 2018 2:28 pm

somekevinguy wrote:
Sat May 12, 2018 12:11 pm
GCD wrote:
Sat May 12, 2018 11:42 am
Not a physician, but I used to live in the Bay Area. A lot depends on where you have to work and how flexible your hours are so you can take advantage of traffic patterns. I have no idea how that will work for you two. Traffic management in the Bay Area very much affects what you can afford.

I only mention that because my old 5 bedroom, 3 bath, 3000+ sq ft house in Dublin (East Bay) is now valued at $1.3 million. But depending on where you are working and traffic patterns, certain areas will be completely unrealistic for you.
Understood and agree. Unfortunately, we're relatively limited to the peninsula/northern part of the south bay.
Ouch. I have no useful advice for you. But good luck!

Afty
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Afty » Sat May 12, 2018 4:01 pm

Don’t take this the wrong way, but if neither of you are in tech, I would strongly consider moving somewhere else. You should be able to earn comparable money in areas with much lower cost of living, where you could actually afford a house, a really nice one.

I’m a software engineer married to an attending physician in the South Bay; we bought a house here last summer. If it weren’t for my job, we would live elsewhere.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 5:15 pm

Afty wrote:
Sat May 12, 2018 4:01 pm
Don’t take this the wrong way, but if neither of you are in tech, I would strongly consider moving somewhere else. You should be able to earn comparable money in areas with much lower cost of living, where you could actually afford a house, a really nice one.

I’m a software engineer married to an attending physician in the South Bay; we bought a house here last summer. If it weren’t for my job, we would live elsewhere.
Not at all. Im also a proponent of geographic arbitrage. If it weren't for the fact that aging parents live here and definitely don't want to move (and we highly value the time they spend almost daily with our young kids) and that we essentially have dream jobs, we would definitely move. This is undoubtedly one of the highest cost of living areas in the country and physician salaries actually inversely correlate with cost of living for the most part.

Seems like either not a ton of Bay Area physicians on BH's or maybe none that want to share re: how they handled housing? I feel as though now, it is very different than it was even just 3-4 years ago (primarily home prices but add onto that rising interest rates-although still historically low and a minimal factor- and tax laws that disproportionately affect high cost of living areas- ie mortgage interest and property tax deduction, and high tax states-ie SALT limitations)

staythecourse
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by staythecourse » Sat May 12, 2018 5:25 pm

somekevinguy wrote:
Sat May 12, 2018 5:15 pm
Afty wrote:
Sat May 12, 2018 4:01 pm
Don’t take this the wrong way, but if neither of you are in tech, I would strongly consider moving somewhere else. You should be able to earn comparable money in areas with much lower cost of living, where you could actually afford a house, a really nice one.

I’m a software engineer married to an attending physician in the South Bay; we bought a house here last summer. If it weren’t for my job, we would live elsewhere.
Not at all. Im also a proponent of geographic arbitrage. If it weren't for the fact that aging parents live here and definitely don't want to move (and we highly value the time they spend almost daily with our young kids) and that we essentially have dream jobs, we would definitely move. This is undoubtedly one of the highest cost of living areas in the country and physician salaries actually inversely correlate with cost of living for the most part.

Seems like either not a ton of Bay Area physicians on BH's or maybe none that want to share re: how they handled housing? I feel as though now, it is very different than it was even just 3-4 years ago (primarily home prices but add onto that rising interest rates-although still historically low and a minimal factor- and tax laws that disproportionately affect high cost of living areas- ie mortgage interest and property tax deduction, and high tax states-ie SALT limitations)
Just curious why don't you just ask your work colleagues. This seems to be an excellent and oft discussed topic in the physician lounge in an area like yours.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 5:28 pm

staythecourse wrote:
Sat May 12, 2018 5:25 pm
somekevinguy wrote:
Sat May 12, 2018 5:15 pm
Afty wrote:
Sat May 12, 2018 4:01 pm
Don’t take this the wrong way, but if neither of you are in tech, I would strongly consider moving somewhere else. You should be able to earn comparable money in areas with much lower cost of living, where you could actually afford a house, a really nice one.

I’m a software engineer married to an attending physician in the South Bay; we bought a house here last summer. If it weren’t for my job, we would live elsewhere.
Not at all. Im also a proponent of geographic arbitrage. If it weren't for the fact that aging parents live here and definitely don't want to move (and we highly value the time they spend almost daily with our young kids) and that we essentially have dream jobs, we would definitely move. This is undoubtedly one of the highest cost of living areas in the country and physician salaries actually inversely correlate with cost of living for the most part.

Seems like either not a ton of Bay Area physicians on BH's or maybe none that want to share re: how they handled housing? I feel as though now, it is very different than it was even just 3-4 years ago (primarily home prices but add onto that rising interest rates-although still historically low and a minimal factor- and tax laws that disproportionately affect high cost of living areas- ie mortgage interest and property tax deduction, and high tax states-ie SALT limitations)
Just curious why don't you just ask your work colleagues. This seems to be an excellent and oft discussed topic in the physician lounge in an area like yours.

Good luck.
I've noticed that personal finance knowledge, let alone BH philosophy, is pretty scarce amongst physicians (so much so that I've thought of inviting WCI out to talk to our group or giving a talk myself). Relative anonymity also helps in these sorts of discussions as even if just discussing percentages of salary (vs absolute numbers), it can be a little awkward.

mrsbetsy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by mrsbetsy » Sat May 12, 2018 6:03 pm

Not a physician, but have lived in the Bay Area since 1989. There's no magic here. You just have to start somewhere. When we bought our first home in 1992 for 200K, we thought THAT was expensive. When we bought the next home for 525K in 2000, we thought that price was ridiculous. Well...you've seen what has happened and I probably couldn't afford to buy my paid-for house right now if I was shopping -- especially because of Prop 13, my property tax is extremely low.

Just start with what you can afford. It can even be a condo. How big a place does it need to be for two people?

You might get lucky like we did and experience a steady rise in the market.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 6:34 pm

mrsbetsy wrote:
Sat May 12, 2018 6:03 pm
Not a physician, but have lived in the Bay Area since 1989. There's no magic here. You just have to start somewhere. When we bought our first home in 1992 for 200K, we thought THAT was expensive. When we bought the next home for 525K in 2000, we thought that price was ridiculous. Well...you've seen what has happened and I probably couldn't afford to buy my paid-for house right now if I was shopping -- especially because of Prop 13, my property tax is extremely low.

Just start with what you can afford. It can even be a condo. How big a place does it need to be for two people?

You might get lucky like we did and experience a steady rise in the market.
Understood- we have two young kids so schools also come into play. It seems that as 2 high income professionals who have delayed gratification for 10+year’s post-college and save 40+% of gross income we’d be able to afford a not that fancy 4/2 2000 sq ft home but perhaps not...?

Pawpatrol
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Pawpatrol » Sat May 12, 2018 7:40 pm

We were in your shoes and rented for the 13+ years before moving recently to another city that while stil HCOL much less than bay area.

There is really no financial incentive to buy in the Bay Area at least not after this run-up. This is counter to the mantra “buying a house in bay area was the best thing I have ever did, just jump in, yeah it is crazy, thank me later”.

Renting comes out ahead
1) if you are in SF as rent control will have you in a sig below market price if housing rises and easily come out ahead if aggressivly saving your free cash flow

2) even if in peninsula the house price/ annual rent are 30-35x which is insane. Since owning a home is so status oriented in bay area there is good reward to renters of SFH’s. The place i rented before i left would have a property tax if i owned equal to 2/3 of my rent. People like renting to doctors and some owners of sfh in the area I realized underprice so they can handpick tenants just like you.

3) bay area housing very closely correlates with stock market returns so if your excess cash flow is invested you are participating in the run-up (non-leveraged though)

4) you will rent a much crappier place than you would buy and much of the housing in the peninsula are old houses that need lots of work, foundation problems, bad drainage, termites. These houses will take all your free cash flow

5) you can move jobs throughout the bay area really easily, have short commutes and maximize time with your family.

6) by renting you participiate in all the upside in stock market without leverage and you have a free call option of buying a home should the market crash and price/ annual rent go back under 20.

7) these SALT tax changes are deadly for bay area and have not been priced in yet.

8) you will be able to fully fund all tax-advantaged and backdoor and megabackdoor rothaccounts all in the first 3 months of the year. Most of my ex-colleagues in your position didnt do roth, didnt fully fund 401k and were spending their money on house upgrades and additions. Then you will grow a large taxable account and by using TLH and tax-efficient placement of funds you can generate more savings.

ymmv but that is my wisdom i wish to pass to you both.
Last edited by Pawpatrol on Sat May 12, 2018 8:19 pm, edited 3 times in total.

Leemiller
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Leemiller » Sat May 12, 2018 7:49 pm

There are parts of the country where a dual physician household will mean living in the best neighborhoods, but unfortunately the Bay Area isn’t one of them. You might have to look at townhomes or condos or living further out. I see lots of high income households taking on expensive homes where I live, DC area, and some may have family money, but others are just assuming 30 years of high pay. Personally, I think that is risky - especially for those of us purchasing later in life due to graduate school educations.

I also would say when you live in a neighborhood with expensive homes like that, there is a lifestyle that goes with it - private schools, expensive cars, nice vacations, a spouse at home, nannies, housekeepers, art, it’s all good to say you don’t need/care that but I wouldn’t make your budget so tight your kids are the only ones who haven’t been abroad and your furniture is all ikea.

HEDGEFUNDIE
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by HEDGEFUNDIE » Sat May 12, 2018 7:51 pm

2000 sqft is out of your price range. But you can find lots of 1500-1700 sqft single family homes around $2M in San Mateo, Foster City, Hillsdale.

Good luck.

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Watty
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Watty » Sat May 12, 2018 7:57 pm

somekevinguy wrote:
Sat May 12, 2018 5:15 pm
If it weren't for the fact that aging parents live here and definitely don't want to move (and we highly value the time they spend almost daily with our young kids) and that we essentially have dream jobs, we would definitely move.
I really don't have a good answer but one thing I saw when I was living in the Bay Area many years ago was that some of my older coworkers had grown kids that were well into their 20's that were still living with them and it was not always a good situation. The problem was that the kids were working in jobs like at a department store and even back then they could not afford an apartment even with roomates on those wages.

It is impossible to predict the future but you might try to imagine what it will be like for your kids in 20 years when they are ready to move out on their own. Staying in the Bay Area may mean that when you are older you do not get to live near your grown up kids and future grandkids if they have to move away because the housing is there is to expensive for them to remain in the Bay Area.

In contrast I am in Atlanta now which still have affordable housing. Some friends of ours have a son who is severely dyslexic and barely graduated high school. At one point he was working at a chain muffler shop which is a good honest job but I am sure that it did not pay a lot. Even on that income though he was able to afford to buy a small older home that was not in a terrible area.

Just for brainstorming one thing that has been mentioned is that multi-generational housing is becoming more common in the Bay Area. You might want to consider if some permutation of that might work for you.
Last edited by Watty on Sat May 12, 2018 8:04 pm, edited 1 time in total.

BlackcatCA
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by BlackcatCA » Sat May 12, 2018 7:58 pm

Keep an eye out for the new development (town homes) in the Candlestick park area?

TigerNest
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by TigerNest » Sat May 12, 2018 8:01 pm

somekevinguy wrote:
Sat May 12, 2018 5:15 pm
I feel as though now, it is very different than it was even just 3-4 years ago (primarily home prices but add onto that rising interest rates-although still historically low and a minimal factor- and tax laws that disproportionately affect high cost of living areas- ie mortgage interest and property tax deduction, and high tax states-ie SALT limitations)
That's really why it's tough to get good advice from friends, coworkers and neighbors. The experience of homebuyers from even a few years ago is simply not comparable.

The median home price in San Francisco increased by 89% in just 5 years: 2013 to 2018. For those in the Bay Area, it's hard to believe the median house in SF was $850k as recently as 2013. It is now $1.6M+.

Anyone who bought a house over the last few years has been incredibly fortunate, especially since many are leveraged. Those buying today are facing a different set of financial realities and constraints.

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dgm
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by dgm » Sat May 12, 2018 8:16 pm

firstly, i'd step back and look at the big picture. as two doctors, even in the bay area, and maybe even w/ student debt, in the long run you will be fine. whatever house you look at now and think is completely expensive and out of reach will look fine in 10-15 years. your incomes are not anything to sneeze at. your bogleheadedness and recent graduation from student-dom is making you more conservative than you really need to be. so in short, you may not find a great deal but you are going to do fine in the long run.

a 2000 sq ft house is large in the bay area. if you are coming from a more affordable part of the country and are looking to replicate a similar living situation, you need to recalibrate your expectations. think less space but maybe better furnished/upscale appliances. As you have already seen, anything that resmbles a wealthier neighborhood in another city is going to go for 3 mil + around here.

get creative - if you are dead set on 2000 sq ft or more, buy a smaller sq ft house that has upgrade potential, and then renovate it with a builder later on. but as i mentioned above. i suspect you will move in 7-10 years to a bigger house once you realize your savings are piling up faster than you expected.

good luck and don't be too down on yourselves. you'll look back in a decade or two and be in a very comfortable position. look to get a starter home for now, and then upgrade later on vs looking for the home of your dreams on the first shot.
Last edited by dgm on Wed May 23, 2018 12:11 pm, edited 1 time in total.

mrsbetsy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by mrsbetsy » Sat May 12, 2018 8:21 pm

There are plenty of starter homes on the peninsula for 1.5M - you can do that quite easily. You aren't going to get your dream home when you are first starting out. We've been prosperous in the medical device industry and then as entrepreneurs and probably had similar income at one time. We definitely did not every buy as much house as we could afford. That's usually foolish.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 8:23 pm

Pawpatrol wrote:
Sat May 12, 2018 7:40 pm
We were in your shoes and rented for the 13+ years before moving recently to another city that while stil HCOL much less than bay area.

There is really no financial incentive to buy in the Bay Area at least not after this run-up. This is counter to the mantra “buying a house in bay area was the best thing I have ever did, just jump in, yeah it is crazy, thank me later”.

Renting comes out ahead
1) if you are in SF as rent control will have you in a sig below market price if housing rises and easily come out ahead if aggressivly saving your free cash flow

2) even if in peninsula the house price/ annual rent are 30-35x which is insane. Since owning a home is so status oriented in bay area there is good reward to renters of SFH’s. The place i rented before i left would have a property tax if i owned equal to 2/3 of my rent. People like renting to doctors and some owners of sfh in the area I realized underprice so they can handpick tenants just like you.

3) bay area housing very closely correlates with stock market returns so if your excess cash flow is invested you are participating in the run-up (non-leveraged though)

4) you will rent a much crappier place than you would buy and much of the housing in the peninsula are old houses that need lots of work, foundation problems, bad drainage, termites. These houses will take all your free cash flow

5) you can move jobs throughout the bay area really easily, have short commutes and maximize time with your family.

6) by renting you participiate in all the upside in stock market without leverage and you have a free call option of buying a home should the market crash and price/ annual rent go back under 20.

7) these SALT tax changes are deadly for bay area and have not been priced in yet.

8) you will be able to fully fund all tax-advantaged and backdoor and megabackdoor rothaccounts all in the first 3 months of the year. Most of my ex-colleagues in your position didnt do roth, didnt fully fund 401k and were spending their money on house upgrades and additions. Then you will grow a large taxable account and by using TLH and tax-efficient placement of funds you can generate more savings.

ymmv but that is my wisdom i wish to pass to you both.
Thanks for the wisdom. I agree with most of what you've said and it does seem like SFH rent for below market due to prop 13. For example, the home we currently rent has a price/annual rent ratio of at least 38 being conservative. It seems financially, we are better off just renting for the time being.

We also work for employers that provide housing supplements in the form of straight salary, zero interest 30 year loans, etc so not buying also feels (is) like leaving money on the table. Buying still seems crazy but it does make the math more complicated, especially if we really do plan to be here for the long haul (~20 years).

In regards to kids and their ability to live in the same area, agreed, if 2 physicians can't afford it, I'm not sure who can/will be.... We'll be more than happy to hopefully one day cash out and live somewhere much cheaper.

PFInterest
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by PFInterest » Sat May 12, 2018 8:28 pm

Rent. Wait for the next crash. Swoop in.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 8:34 pm

PFInterest wrote:
Sat May 12, 2018 8:28 pm
Rent. Wait for the next crash. Swoop in.
'
Definitely a possibility. Is tough when historically, bay area housing (at least in the areas we are looking) has never really one down but just flattened out, even in 2008-2009 etc or with the dot.com bust. However, I imagine at some point it becomes unsustainable when only people with significant RSU's, inherited wealth, or household incomes >600K+ can afford what would be a very typical tract home in any other location. Hard to believe there are really THAT many people who can afford 3M dollar homes, tech wealth or not. Also don't want the interest rate tail to wag the purchase/rent decision dog but those seem destined to only continue increasing.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 8:38 pm

mrsbetsy wrote:
Sat May 12, 2018 8:21 pm
There are plenty of starter homes on the peninsula for 1.5M - you can do that quite easily. You aren't going to get your dream home when you are first starting out. We've been prosperous in the medical device industry and then as entrepreneurs and probably had similar income at one time. We definitely did not every buy as much house as we could afford. That's usually foolish.
'
I'm not sure if you've been looking at housing recently but that is becoming less and less true (the availability of 1.5M starter homes). A search for 3/2 1200+ sq foot home somewhere between los altos and los gatos doesn't reveal much in that range at all. Keep in mind listing prices are just that and homes are routinely going for 20-30% above ask at this point with multiple offers/cash offers. I definitely hear the "move to san jose, morgan hill, etc" that some people might suggest but those commutes are just atrocious and I think if that was the alternative, we would just pick up and sacrifice the family connections/dream jobs.
Last edited by somekevinguy on Sat May 12, 2018 8:41 pm, edited 1 time in total.

Pawpatrol
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Pawpatrol » Sat May 12, 2018 8:39 pm

Those interest free loans while amazing perks are handcuffs that will limit your flexibility as you move through your life cycle because from my experience the minute you change jobs, you owe them a bunch of money that you might not have.

These are the type of perks that are contributing to the local inflation and I wouldn’t want to be around when the next tech boom/bust cycle ends.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 8:43 pm

Pawpatrol wrote:
Sat May 12, 2018 8:39 pm
Those interest free loans while amazing perks are handcuffs that will limit your flexibility as you move through your life cycle because from my experience the minute you change jobs, you owe them a bunch of money that you might not have.

These are the type of perks that are contributing to the local inflation and I wouldn’t want to be around when the next tech boom/bust cycle ends.
Agree, golden handcuffs for sure. That being said, we really are at our "dream jobs" and while yes, the medical industry is subject to lots of external factors that could make it very different/less lucrative etc, at least historically it has been one of the more stable jobs. We also work for major employers that out of all the hospital systems in the state, would be some of the most likely to weather any storm. The golden handcuffs aspect certainly does make the calculus a bit more challenging though

Pawpatrol
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Pawpatrol » Sat May 12, 2018 8:55 pm

I would suggest modeling the free cash flow in renting/buying and then imagine the normal things that life brings and the differences between the two.

Need new car suddenly, decide you want to change jobs, want to move jobs and stay home with young kids for 6 months in between - all this is possible for the both of you if you rent. You may love your jobs, as did I but time brings options and changing ideas/values that you cannot foresee.

roof leaks...<insert x>, call the landlord

random_walker_77
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by random_walker_77 » Sat May 12, 2018 9:22 pm

Leemiller wrote:
Sat May 12, 2018 7:49 pm
There are parts of the country where a dual physician household will mean living in the best neighborhoods, but unfortunately the Bay Area isn’t one of them. You might have to look at townhomes or condos or living further out. I see lots of high income households taking on expensive homes where I live, DC area, and some may have family money, but others are just assuming 30 years of high pay. Personally, I think that is risky - especially for those of us purchasing later in life due to graduate school educations.

I also would say when you live in a neighborhood with expensive homes like that, there is a lifestyle that goes with it - private schools, expensive cars, nice vacations, a spouse at home, nannies, housekeepers, art, it’s all good to say you don’t need/care that but I wouldn’t make your budget so tight your kids are the only ones who haven’t been abroad and your furniture is all ikea.
Yeah... it's good when you make more than almost everyone else. But in the bay area, a dual-physician income doesn't stand out so much. There're a lot of dual-techie households, and those jobs are paying really well. Apparently, the median pay (total compensation) as reported to the SEC is $197K at google and $240K at Facebook. That's just the median. [edited: And this is across all employees and all (US?) geographies]


https://www.wired.com/story/who-pays-th ... on-valley/

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sat May 12, 2018 9:26 pm

random_walker_77 wrote:
Sat May 12, 2018 9:22 pm
Leemiller wrote:
Sat May 12, 2018 7:49 pm
There are parts of the country where a dual physician household will mean living in the best neighborhoods, but unfortunately the Bay Area isn’t one of them. You might have to look at townhomes or condos or living further out. I see lots of high income households taking on expensive homes where I live, DC area, and some may have family money, but others are just assuming 30 years of high pay. Personally, I think that is risky - especially for those of us purchasing later in life due to graduate school educations.

I also would say when you live in a neighborhood with expensive homes like that, there is a lifestyle that goes with it - private schools, expensive cars, nice vacations, a spouse at home, nannies, housekeepers, art, it’s all good to say you don’t need/care that but I wouldn’t make your budget so tight your kids are the only ones who haven’t been abroad and your furniture is all ikea.
Yeah... it's good when you make more than almost everyone else. But in the bay area, a dual-physician income doesn't stand out so much. There're a lot of dual-techie households, and those jobs are paying really well. Apparently, the median pay (total compensation) as reported to the SEC is $197K at google and $240K at Facebook. That's just the median. [edited: And this is across all employees and all (US?) geographies]


https://www.wired.com/story/who-pays-th ... on-valley/
If it were straight income, I think we'd be fine... I suspect it is the RSU's, coupled with the booming stock market and the extra 10+ years of earnings while we were in school/training that make it extra challenging.

random_walker_77
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by random_walker_77 » Sat May 12, 2018 11:04 pm

somekevinguy wrote:
Sat May 12, 2018 9:26 pm
If it were straight income, I think we'd be fine... I suspect it is the RSU's, coupled with the booming stock market and the extra 10+ years of earnings while we were in school/training that make it extra challenging.
Yes, that is challenging. It might be yet another reason to rent. This bull market is the 2nd longest on record. Alas, it probably will end someday :twisted:

Daunting thought: to fund all those 2M+ all-cash offers, think about how much money had to be earned. With a nearly 50% marginal rate, between federal and state taxes, they'd have to make $4M to come up with $2M in cash.

That's assuming it's an ordinary-income vesting of a lot of RSUs or options. I suppose w/ capital gains, it's a lot better, but even that approaches a 35% tax rate. That still implies $3M in income, and some of that had to have been earned income at the 50% rate so it's likely in-between, but closer to $4M than $3M. A lot of people are making a lot of money!!!

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by visualguy » Sun May 13, 2018 1:13 am

random_walker_77 wrote:
Sat May 12, 2018 11:04 pm
Daunting thought: to fund all those 2M+ all-cash offers, think about how much money had to be earned. With a nearly 50% marginal rate, between federal and state taxes, they'd have to make $4M to come up with $2M in cash.

That's assuming it's an ordinary-income vesting of a lot of RSUs or options. I suppose w/ capital gains, it's a lot better, but even that approaches a 35% tax rate. That still implies $3M in income, and some of that had to have been earned income at the 50% rate so it's likely in-between, but closer to $4M than $3M. A lot of people are making a lot of money!!!
There are indeed a lot of people who make a lot of money in the Bay Area, but they are still a tiny minority of the people. Even if you just focus on tech, it is still a small minority who make, say, $500K+/yr gross in total compensation.

The housing problem in the area is mostly a supply problem. There is very little inventory, and there are enough people with the means to pay a lot for the few homes that get on the market. When there's so little inventory, even a tiny percentage of people with means can bid up prices to very high levels.

This is not going to change until the supply problem is addressed. Unfortunately, that is a very tough problem in this area for many well-known reasons.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by random_walker_77 » Sun May 13, 2018 9:34 am

visualguy wrote:
Sun May 13, 2018 1:13 am
random_walker_77 wrote:
Sat May 12, 2018 11:04 pm
Daunting thought: to fund all those 2M+ all-cash offers, think about how much money had to be earned. With a nearly 50% marginal rate, between federal and state taxes, they'd have to make $4M to come up with $2M in cash.

That's assuming it's an ordinary-income vesting of a lot of RSUs or options. I suppose w/ capital gains, it's a lot better, but even that approaches a 35% tax rate. That still implies $3M in income, and some of that had to have been earned income at the 50% rate so it's likely in-between, but closer to $4M than $3M. A lot of people are making a lot of money!!!
There are indeed a lot of people who make a lot of money in the Bay Area, but they are still a tiny minority of the people. Even if you just focus on tech, it is still a small minority who make, say, $500K+/yr gross in total compensation.

The housing problem in the area is mostly a supply problem. There is very little inventory, and there are enough people with the means to pay a lot for the few homes that get on the market. When there's so little inventory, even a tiny percentage of people with means can bid up prices to very high levels.

This is not going to change until the supply problem is addressed. Unfortunately, that is a very tough problem in this area for many well-known reasons.
No arguments there. Supply is definitely a big problem, but you've got to admit the demand side is also extra-ordinary (sic).

Just about anywhere else, a dual-physician couple would be in the top 5-10% for the region and able to live in an upscale area. Yes, households making $500+K/yr are a small minority (and individuals even more so), but even in Sunnyvale (not Palo Alto or Los Altos), your 80th percentile is making $180K and the top 20% are averaging $268K. In Palo Alto, the top 5% average $850K/yr, and top 20% average $480K
https://statisticalatlas.com/place/Cali ... old-Income
https://statisticalatlas.com/place/Cali ... old-Income

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 9:41 am

random_walker_77 wrote:
Sun May 13, 2018 9:34 am
visualguy wrote:
Sun May 13, 2018 1:13 am
random_walker_77 wrote:
Sat May 12, 2018 11:04 pm
Daunting thought: to fund all those 2M+ all-cash offers, think about how much money had to be earned. With a nearly 50% marginal rate, between federal and state taxes, they'd have to make $4M to come up with $2M in cash.

That's assuming it's an ordinary-income vesting of a lot of RSUs or options. I suppose w/ capital gains, it's a lot better, but even that approaches a 35% tax rate. That still implies $3M in income, and some of that had to have been earned income at the 50% rate so it's likely in-between, but closer to $4M than $3M. A lot of people are making a lot of money!!!
There are indeed a lot of people who make a lot of money in the Bay Area, but they are still a tiny minority of the people. Even if you just focus on tech, it is still a small minority who make, say, $500K+/yr gross in total compensation.

The housing problem in the area is mostly a supply problem. There is very little inventory, and there are enough people with the means to pay a lot for the few homes that get on the market. When there's so little inventory, even a tiny percentage of people with means can bid up prices to very high levels.

This is not going to change until the supply problem is addressed. Unfortunately, that is a very tough problem in this area for many well-known reasons.
No arguments there. Supply is definitely a big problem, but you've got to admit the demand side is also extra-ordinary (sic).

Just about anywhere else, a dual-physician couple would be in the top 5-10% for the region and able to live in an upscale area. Yes, households making $500+K/yr are a small minority (and individuals even more so), but even in Sunnyvale (not Palo Alto or Los Altos), your 80th percentile is making $180K and the top 20% are averaging $268K. In Palo Alto, the top 5% average $850K/yr, and top 20% average $480K
https://statisticalatlas.com/place/Cali ... old-Income
https://statisticalatlas.com/place/Cali ... old-Income
Incomes here are definitely quite high- hadn't seen that website before. A caveat though, taking the mean of the top 5% is probably pretty misleading as income is likely one of the most non-normal, positively skewed measures we have (ie everyone could make 500K in the top 5% but you throw in a few Zuckerberg's and it suddenly looks like the average is closer to 1 million or whatever). The mean of the top 5% is especially susceptible whereas if you looked at 10-5%iles, at least you'd have an idea of what the relative range was.

Most physician couples should be in the 450-900 range though so should be fairly competitive even in Palo Alto.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by minimalistmarc » Sun May 13, 2018 10:24 am

PFInterest wrote:
Sat May 12, 2018 8:28 pm
Rent. Wait for the next crash. Swoop in.
Definitely a safe option for physicians, as your jobs are quite recession proof. Waiting can be painful though.

You say the parents are elderly and frail, but if they can give you daily child care they must be in reasonably good shape. Seems they are holding you hostage to a degree. Would be cheaper to move somewhere cheaper and pay for childcare.

bi0hazard
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by bi0hazard » Sun May 13, 2018 10:56 am

Instead of buying a little house for 2-3 million, you can move to a very nice reasonably priced area and buy a mansion for you and a mansion for the parents. Or buy a mansion for you, and use the other 1-2mil to buy a jet and fly your parents from the bay area to your reasonably priced mansion. These are jokes of course. I'm not sure what other answer there is to your question except that you will be in insane amount of debt, like the others living in your area. There's no magic on how your peers handle unreasonable real estate.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Ron Ronnerson » Sun May 13, 2018 10:57 am

I don’t have advice for you in terms of whether you should buy or how much you should spend. Some have suggested living elsewhere but, just personally, there is no way I'd move away from aging parents who spend a lot of time with the grandchildren. Our 4-year-old daughter gets to see all grandparents quite often. My mom has had a couple of accidents and I was able to drive to her house in a few minutes. Things like that are priceless.
TigerNest wrote:
Sat May 12, 2018 8:01 pm
somekevinguy wrote:
Sat May 12, 2018 5:15 pm
I feel as though now, it is very different than it was even just 3-4 years ago (primarily home prices but add onto that rising interest rates-although still historically low and a minimal factor- and tax laws that disproportionately affect high cost of living areas- ie mortgage interest and property tax deduction, and high tax states-ie SALT limitations)
That's really why it's tough to get good advice from friends, coworkers and neighbors. The experience of homebuyers from even a few years ago is simply not comparable.

The median home price in San Francisco increased by 89% in just 5 years: 2013 to 2018. For those in the Bay Area, it's hard to believe the median house in SF was $850k as recently as 2013. It is now $1.6M+.

Anyone who bought a house over the last few years has been incredibly fortunate, especially since many are leveraged. Those buying today are facing a different set of financial realities and constraints.
I think this sums up why you’re not getting a lot of feedback. You’ve asked for thoughts from a small subset of the forum: Bay Area doctors. Add to that the fact that most of that group probably aren’t recent home-buyers.

The current situation is not easy to relate to for those of us who purchased a few years ago. My wife and I bought a 4-bedroom/4-bathroom townhouse in the Bay Area in 2010. We work in Silicon Valley but live in a nice neighborhood in the East Bay with excellent schools. Our commutes are manageable given our situation (hours that we work, carpooling, and my wife being able to mostly work from home). We’re seriously thinking about my wife not working for the next couple of years since my income is sufficient to cover all our expenses. We’ve been saving pretty much her entire salary anyway so taking some time off while our kid is still young is very tempting. This is doable for us because we purchased a few years back and locked in our housing cost. I make $100k as a public-school teacher.

We’ve apparently entered some sort of vortex where things are very different. Perhaps it’s a bubble that will pop. I don’t normally bet on such things but, when two physicians can’t afford a home in the area, something absurd is happening. I’d save money and be ready to pounce when the right opportunity comes along.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 11:08 am

minimalistmarc wrote:
Sun May 13, 2018 10:24 am
PFInterest wrote:
Sat May 12, 2018 8:28 pm
Rent. Wait for the next crash. Swoop in.
Definitely a safe option for physicians, as your jobs are quite recession proof. Waiting can be painful though.

You say the parents are elderly and frail, but if they can give you daily child care they must be in reasonably good shape. Seems they are holding you hostage to a degree. Would be cheaper to move somewhere cheaper and pay for childcare.
Parents are elderly but definitely not frail. That being said, as we know and see all too often, health can be fleeting. We definitely value the time they spend almost daily with our two kids and they are well established in the area so have zero interest in moving.

Renting and waiting is definitely a real possibility.

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Toons
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Toons » Sun May 13, 2018 11:34 am

Come to Johnson City Tn.
The Doctors I speak to ,love it here.

:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Afty
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Afty » Sun May 13, 2018 1:57 pm

If you are committed to staying here long term, I would not rent and "wait for the crash." I don't think the strategy of waiting for a crash is any more applicable to housing than it is to the stock market, for the same reasons -- what if the crash never comes? And how will you know when the crash is done and we're at the bottom?

FWIW, we tried this "wait it out" strategy. We moved here in 2011 and rented a SFH (with small kids) from 2011-2017, and finally bought in 2017. We ended up paying 2x what we would have if we had bought when we first moved here. Remember: "The market can stay irrational longer than you can stay solvent."

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by A-Commoner » Sun May 13, 2018 2:44 pm

OP, do you already have jobs in the Bay Area? You said you wanted to be close to your parents which is fine. Have you considered living and practicing in Sacramento? Sacramento is 81 miles from the Bay Area - not that close, but not that far. Just about right IMO. We almost relocated to Sacramento. We love the rural flavor of Sac (but cow town it is not; it is a major city), but we are from the Midwest so we know and understand rural living quite well. We are also a dual physician household. Physician jobs in Sac are plentiful. Sacramento housing is very attainable. With your $500k on hand for down payment, you almost will have no mortgage debt. There are some very upscale suburbs in Sac (eg Folsom). Had my daughter applied to and been accepted to eiher Stanford or UC Berkeley for college (she didn’t apply to either school) we would have made the move to Sac. She got accepted into UCLA, so we moved to LA instead. We bought a house in an LA suburb 8 months ago for $1m. Zillow now puts an estimate of $1.1m on our house. Recent sales in our subdivision support that pricing. I’ve always been a stock market rather than a real estate guy, but just witnessing this crazy CA housing market has me scratching my head.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by runner540 » Sun May 13, 2018 2:58 pm

Ron Ronnerson wrote:
Sun May 13, 2018 10:57 am

We’ve apparently entered some sort of vortex where things are very different. Perhaps it’s a bubble that will pop. I don’t normally bet on such things but, when two physicians can’t afford a home in the area, something absurd is happening. I’d save money and be ready to pounce when the right opportunity comes along.
Bingo. When 2 doctors can't buy a house in the nice areas, something is out of whack. Ultimately home prices either (1) need to be in line long term with end user incomes either as renters or buyers, or (2) "this time is different" and long term house valuations are truly decoupled from incomes and rents, in which case houses have turned into a speculative asset like gold that has storage costs.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by visualguy » Sun May 13, 2018 3:08 pm

runner540 wrote:
Sun May 13, 2018 2:58 pm
Bingo. When 2 doctors can't buy a house in the nice areas, something is out of whack. Ultimately home prices either (1) need to be in line long term with end user incomes either as renters or buyers, or (2) "this time is different" and long term house valuations are truly decoupled from incomes and rents, in which case houses have turned into a speculative asset like gold that has storage costs.
Why "out of whack"? Seems like the norm to me in major economic centers around the world. Is it any better for "2 doctors" in NYC, London, Vancouver, Hong Kong, or Tel Aviv? Unless these doctors are top surgeons/specialists, I don't think any of those places would be affordable to them.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 3:33 pm

A-Commoner wrote:
Sun May 13, 2018 2:44 pm
OP, do you already have jobs in the Bay Area? You said you wanted to be close to your parents which is fine. Have you considered living and practicing in Sacramento? Sacramento is 81 miles from the Bay Area - not that close, but not that far. Just about right IMO. We almost relocated to Sacramento. We love the rural flavor of Sac (but cow town it is not; it is a major city), but we are from the Midwest so we know and understand rural living quite well. We are also a dual physician household. Physician jobs in Sac are plentiful. Sacramento housing is very attainable. With your $500k on hand for down payment, you almost will have no mortgage debt. There are some very upscale suburbs in Sac (eg Folsom). Had my daughter applied to and been accepted to eiher Stanford or UC Berkeley for college (she didn’t apply to either school) we would have made the move to Sac. She got accepted into UCLA, so we moved to LA instead. We bought a house in an LA suburb 8 months ago for $1m. Zillow now puts an estimate of $1.1m on our house. Recent sales in our subdivision support that pricing. I’ve always been a stock market rather than a real estate guy, but just witnessing this crazy CA housing market has me scratching my head.
Yep here and basically in our dream jobs- Bay Area physician jobs are hard to come by and we pretty much have the jobs we would pick if we could design them ourselves.

We know sac really well and it is a nice area too- certainly much more affordable than the Bay Area by not as niceness in terms of weather and food. That being said, it really is the tie to family and being able to see grandparents daily, coupled with great jobs, that keeps us here.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 3:37 pm

Afty wrote:
Sun May 13, 2018 1:57 pm
If you are committed to staying here long term, I would not rent and "wait for the crash." I don't think the strategy of waiting for a crash is any more applicable to housing than it is to the stock market, for the same reasons -- what if the crash never comes? And how will you know when the crash is done and we're at the bottom?

FWIW, we tried this "wait it out" strategy. We moved here in 2011 and rented a SFH (with small kids) from 2011-2017, and finally bought in 2017. We ended up paying 2x what we would have if we had bought when we first moved here. Remember: "The market can stay irrational longer than you can stay solvent."
This has crossed my mind too although the counter is that at least for now, our cash flow is very healthy renting and while that may one day eventually change, we’ll be well prepared to buy or move at that point (saving maybe 200k/year currently).

Also, I really do believe that at some point, even the world of tech can’t support median home prices of 1.5 million with 4/2s going routinely for 3M plus. Perhaps it becomes Hong Kong or London like... we’ll see.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Carefreeap » Sun May 13, 2018 4:01 pm

Bay Area Peninsula resident and property owner here.

Have you thought about buying your parents house and having them "right-size" to a smaller house? They will want to take advantage of prop 60 (transfer of property tax base) but if they are in a big house maybe it's time make life easier for themselves?

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 4:05 pm

Carefreeap wrote:
Sun May 13, 2018 4:01 pm
Bay Area Peninsula resident and property owner here.

Have you thought about buying your parents house and having them "right-size" to a smaller house? They will want to take advantage of prop 60 (transfer of property tax base) but if they are in a big house maybe it's time make life easier for themselves?
Yeah unfortunately they live far enough where my wifes commute would be great but mine would be pretty bad. Decent idea though.

visualguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by visualguy » Sun May 13, 2018 4:19 pm

somekevinguy wrote:
Sun May 13, 2018 3:37 pm
This has crossed my mind too although the counter is that at least for now, our cash flow is very healthy renting and while that may one day eventually change, we’ll be well prepared to buy or move at that point (saving maybe 200k/year currently).
Much of that annual savings is wiped out by the annual appreciation of the house that you would eventually buy in the area... As mentioned by a few above, waiting to buy doesn't make sense if there's a high probability that you will stay in the area in the long run. You fall further and further behind due to missed appreciation plus rent.

Betting against the Bay Area economy didn't prove to be a smart strategy in the past, and all indications are that it won't be a smart strategy in the future either.

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Re: New(ish) attending physicians in the Bay Area: Housing

Post by Carefreeap » Sun May 13, 2018 4:36 pm

runner540 wrote:
Sun May 13, 2018 2:58 pm
Ron Ronnerson wrote:
Sun May 13, 2018 10:57 am

We’ve apparently entered some sort of vortex where things are very different. Perhaps it’s a bubble that will pop. I don’t normally bet on such things but, when two physicians can’t afford a home in the area, something absurd is happening. I’d save money and be ready to pounce when the right opportunity comes along.
Bingo. When 2 doctors can't buy a house in the nice areas, something is out of whack. Ultimately home prices either (1) need to be in line long term with end user incomes either as renters or buyers, or (2) "this time is different" and long term house valuations are truly decoupled from incomes and rents, in which case houses have turned into a speculative asset like gold that has storage costs.
Just because one is a doctor doesn't mean you deserve to live in the best neighborhoods in the Bay Area. Our former sellers were a pediatric nephrologist and a middle school teacher. I think he had hospital time at Stanford. The demographics of our little middle class coastal town have changed a lot since their kids (about our ages mid to late 50s) went to school. Our schools are better and we are no longer a sleepy blue collar town of contractors and airport personnel.

The OP has $500k to put down on a house and the opportunity to get a 0% loan. How many people have THAT opportunity? Plus free(?) childcare? They are so far ahead of the pack.

When we first moved to the SF Bay Area we paid 5x my husband's salary to buy our first house which was a stinky disgusting dump (but with potential :p). I'm not kidding. The ceiling and walls were yellow with nicotine and the carpet was literally falling apart between the sand and pet stains. The kitchen had grease everywhere. They must have fried every meal. And BTW those owners raised 6(!) kids in a 1000 sq.ft. 3/2 1958 rancher. Five years later we moved to the "Move-Up" house. Literally and figuratively speaking as it is four doors up the street from our old house. The current house is about 2500 sq.ft. on a 1/2 lot with amazing ocean and canyon views. My neighbor is convinced that it's worth $2M but I think that's probably a little optimistic. We shall see. We finally had a house come up for sale for the first time in 6 years. It's 2000 sq.ft. original 60s type elevated rancher. It's on 1+ acres (mostly hill) with no view. Listed for $1.2M. I'm sure it will go multiple offer, just a question of how high over list price.

O.P. I'd concentrate on a well cared-for 1500sqft home that has potential to add on in a neighborhood you like. Those kinds of houses are the most versatile; easy to live in while kids are a young age, easy to rent out if you need to temporarily relocate, nice sized house to age in place and the list goes on.

somekevinguy
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Re: New(ish) attending physicians in the Bay Area: Housing

Post by somekevinguy » Sun May 13, 2018 4:42 pm

Carefreeap wrote:
Sun May 13, 2018 4:36 pm
runner540 wrote:
Sun May 13, 2018 2:58 pm
Ron Ronnerson wrote:
Sun May 13, 2018 10:57 am

We’ve apparently entered some sort of vortex where things are very different. Perhaps it’s a bubble that will pop. I don’t normally bet on such things but, when two physicians can’t afford a home in the area, something absurd is happening. I’d save money and be ready to pounce when the right opportunity comes along.
Bingo. When 2 doctors can't buy a house in the nice areas, something is out of whack. Ultimately home prices either (1) need to be in line long term with end user incomes either as renters or buyers, or (2) "this time is different" and long term house valuations are truly decoupled from incomes and rents, in which case houses have turned into a speculative asset like gold that has storage costs.
Just because one is a doctor doesn't mean you deserve to live in the best neighborhoods in the Bay Area. Our former sellers were a pediatric nephrologist and a middle school teacher. I think he had hospital time at Stanford. The demographics of our little middle class coastal town have changed a lot since their kids (about our ages mid to late 50s) went to school. Our schools are better and we are no longer a sleepy blue collar town of contractors and airport personnel.

The OP has $500k to put down on a house and the opportunity to get a 0% loan. How many people have THAT opportunity? Plus free(?) childcare? They are so far ahead of the pack.

When we first moved to the SF Bay Area we paid 5x my husband's salary to buy our first house which was a stinky disgusting dump (but with potential :p). I'm not kidding. The ceiling and walls were yellow with nicotine and the carpet was literally falling apart between the sand and pet stains. The kitchen had grease everywhere. They must have fried every meal. And BTW those owners raised 6(!) kids in a 1000 sq.ft. 3/2 1958 rancher. Five years later we moved to the "Move-Up" house. Literally and figuratively speaking as it is four doors up the street from our old house. The current house is about 2500 sq.ft. on a 1/2 lot with amazing ocean and canyon views. My neighbor is convinced that it's worth $2M but I think that's probably a little optimistic. We shall see. We finally had a house come up for sale for the first time in 6 years. It's 2000 sq.ft. original 60s type elevated rancher. It's on 1+ acres (mostly hill) with no view. Listed for $1.2M. I'm sure it will go multiple offer, just a question of how high over list price.

O.P. I'd concentrate on a well cared-for 1500sqft home that has potential to add on in a neighborhood you like. Those kinds of houses are the most versatile; easy to live in while kids are a young age, easy to rent out if you need to temporarily relocate, nice sized house to age in place and the list goes on.
Thanks for the advice- this may be a good strategy to get into the market, have something we wouldn’t mind staying in, take advantage of the housing supplement, and perhaps equity to move up later on if we so desire. It’d be nice if those homes (in the areas that make the most sense for commute which most correlates to quality of life for me)didn’t cost 2-2.5 but better than 2.5-3M.

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