Renting vs Buying, break even point for SF is 15 years (Daly City: fit in, condos)

[Chuck5000]

Originally Posted by sav858

I guarantee the vast majority of people buying houses don't make nearly that much.

On the Peninsula, this is not correct at all. Similar income/career profiles to SF, plus other professionals from around the country.

Although it refers to cash transactions, it's proof of the high income profile: Tech Buyers Only a Small Portion of San Francisco Bay Area Cash Transactions | John Burns Real Estate ConsultingJohn Burns Real Estate Consulting

I live here, it's pretty obvious, and I've spoken with realtors. You can find discussions on the web to hear engineers getting paid 300, 400, 500k

There's a thread here in the San Jose forum about 200k earners in tech. That's one income; add the spouse and you're well over 300.

[bodyforlife99]

Originally Posted by sav858

I guarantee the vast majority of people buying houses don't make nearly that much.

Agree. Admittedly to save up for a 20% down, it would take a family in the $200K range about 7 years to save for a down payment, but I don't believe a 20% down is the norm in this area. And as I mentioned in a previous post....

San Francisco Federal Credit Union unveils zero-down jumbo mortgages | 2015-12-08 | HousingWire

A family with adequate income flow could probably get a house now for the same it would cost them to rent. Not saying I think what SF Fed is doing is a good idea...just saying it's possible.

[Chuck5000]

bodyforlife, simply not true re: San Mateo and Santa Clara counties. I am just amazed at what amounts to denial that there are a freaking boatload of working households in the tech industry earning 300k+, and not only those folks, but other wealthy professionals buying property here, notonly foreign investors. Read the article I just posted above.

The facts and data are out there. And go talk to some realtors and ask them, and report back on what they tell you.

[bodyforlife99]

Originally Posted by Chuck5000

bodyforlife, simply not true re: San Mateo and Santa Clara counties. I am just amazed at what amounts to denial that there are a freaking boatload of working households in the tech industry earning 300k+, and not only those folks, but other wealthy professionals buying property here, notonly foreign investors. Read the article I just posted above.

The facts and data are out there. And go talk to some realtors and ask them, and report back on what they tell you.

Maybe I missed it Chuck. Can you point out where in the article you listed, it specifically stated the annual income on the people purchasing houses (I'm not seeing it). It also appears to only be talking about cash buyers (are you claiming those are 100% of the buyers in the Bay Area?).

[Chuck5000]

It's not in the article. I've seen it elsewhere, can't put my finger on it. You seriously don't believe this? Where do you think the money is coming from? I personally know 4 people with incomes in that range, over 300k, who bought. I wish I had that kind of income.

Read the thread on the SJ forum if you're not aware how much engineers get paid, and if you dont' know just how many of them there are: Tech Jobs Over 200K

Median income for SC county is 91k, which is really, really high for a median. Santa Clara County, CA - Lifestyle and Demographics - Realtor.com® Look at the chart here, scroll down. Look at how many HH's are over 200. A lot. These folks are the newer buyers. And some old wealthy ones, too, of course.

What you really want to see is the income stats for new buyers in formerly non-wealthy towns. (ie palo alto doesn't count, but cupertino, and mountain view do, for example). People buying in MV now absofreakinglutely have lots of money, almost nobody is buying a 1.2m house there who is making 150k. It's Goog and other big company employees, often dual income, often well over 400k.

Again, talk to realtors. They'll tell you most their clients looking to buy have that kind of income. I could try digging on the us census site for town info,, but it's time for non internet stuff.

[WizardOfRadical]

Very few first time buyers in the market is my guess. Lot's of wealthy people with lots of equity, inheritance, trust funds, investment portfolios and the like. Much more so than wealthy buyers.

A crap ton of baby boomers sitting on property who are house rich. All their affluence will come only when they sell their home, or die and their kids sell the home which gives them enough for their own down payments.

Sure the wealthy can buy, but inventory is extremely low. It's not like a ton of people are shopping for homes in the bay right now. 10 years ago, when anyone could get a loan there were tons of people shopping for homes. But not now.

[bodyforlife99]

Originally Posted by Chuck5000

It's not in the article. I've seen it elsewhere, can't put my finger on it. You seriously don't believe this? Where do you think the money is coming from? I personally know 4 people with incomes in that range, over 300k, who bought. I wish I had that kind of income.

Do I seriously believe that all buyers are in the 300K range? No I don't seriously believe that. Nor do I seriously believe all buyers are cash buyers (hence, the question I posed to you). I'm glad you've been able to personally find 4 people. My next door neighbor that bought 2 years ago paid $700k, has a wife that doesn't work, and he doesn't make that kind of money. Another home down the block also went to a family with a stay at home mom (at least for now) and doesn't earn that kind of money either. And we've also had some Asian buyers come in that in all likelihood have money up the Wazoo and significantly more bling than you're talking about. It just depends. I think the average salary at Google is between 125-130k now (so I guess it would depend on if both people in a couple are working as engineers or if that is the main income and the other is lower). The kind of info you're talking about isn't that readily available so not sure where you would find it. Nor is it all that relevant. What is relevant is what it would take to acquire a home. Clearly, your income doesn't need to be as high as you claim to purchase a home here. We have beautiful views of the city where I'm at and most homes are going in the 850k range. If you simply run the numbers on a mortgage calculator, you'd see that it's not necessary to have that kind of income to afford a home very close to the city and the overall price is not all that much more than renting. As I stated earlier in this thread, qualified buyers are back to not even needing a down payment any more, so the thought that it isn't doable for a family that earns less than what you claim is simply not correct. In addition, the Bay Area isn't just composed of engineers that work in SV (you seem to be very narrow on your focus here). If a family came into the area with a proper down payment, they could earn half as much as you quote and be able to survive here. If not, you'd probably be talking about $175-200K to live comfortably enough (mostly because PMI would kill you until you got to that 20%). So, right out of the gate, roughly 25% of working couples that are simply public employees (not engineers).

http://www.mercurynews.com/salaries/bay-area/2014

And there have certainly been excellent opportunities over the last 2-3 years with some of the lowest mortgage rates in our history (we're under 3%). If economists' predictions are correct, they'll be another good entry point in 2018 or 2019 (of course, it's anyone's guess where interest rates will be then, but if I had to guess they'd go up very gradually). But suit yourself Chuck, if you want to believe that. This conversation has actually run its course and I think it's a dead end topic that people are just going have to agree to disagree.

[bodyforlife99]

Examples for you Chuck. Just in case you thought I was pulling your leg on the prices. And we're talking just 7 miles away from downtown SF.

158 Alta VIS, Daly City, CA, 94014 - MLS# 435945 - Estately

390 Ardendale, Daly City, CA, 94014 - MLS# 435083 - Estately

67 Alta VIS, Daly City, CA, 94014 - MLS# 434987 - Estately

Nice views of the city and low crime rate. What more could you ask for?

[bodyforlife99]

And some more for you (a recently written article in SFGate that pretty much agrees with everything I just said on the topic)....

To buy a home in San Francisco, the site found, a salary of $180,600 is required to buy an average home costing around $1,119,500. San Jose was up next, with a necessary salary of $129,864 to buy a standard house for roughly $805,000.

Sacramento fell at number 19 on the list, with a salary of $57,155 needed to buy a home at $253,100.

Here's how much money you need to make to buy a home in San Francisco or San Jose - SFGate

And obviously a home at $850K is going to be less (mirroring some earlier comments I made on the topic in another thread). Sounds like a salary of $135K based on this article (just about the exact salary I said in the other thread where I was being attacked by a myriad of posters). The most laughable was some moron that said I should have just admitted defeat pages previous. The only guy that ended up being classy about it was HockeyMac (to which I give a thumbs up). I have no idea why you think people are in denial Chuck, but I can't provide you with any more proof that I have (even gave you actual home sold and their prices). Feel free to retort or believe anything you want, I'll let my comments stand on their merit.

[TR95]

Originally Posted by bodyforlife99

And some more for you (a recently written article in SFGate that pretty much agrees with everything I just said on the topic)....

To buy a home in San Francisco, the site found, a salary of $180,600 is required to buy an average home costing around $1,119,500. San Jose was up next, with a necessary salary of $129,864 to buy a standard house for roughly $805,000.

Sacramento fell at number 19 on the list, with a salary of $57,155 needed to buy a home at $253,100.

Here's how much money you need to make to buy a home in San Francisco or San Jose - SFGate

And obviously a home at $850K is going to be less (mirroring some earlier comments I made on the topic in another thread). Sounds like a salary of $135K based on this article (just about the exact salary I said in the other thread where I was being attacked by a myriad of posters). The most laughable was some moron that said I should have just admitted defeat pages previous. The only guy that ended up being classy about it was HockeyMac (to which I give a thumbs up). I have no idea why you think people are in denial Chuck, but I can't provide you with any more proof that I have (even gave you actual home sold and their prices). Feel free to retort or believe anything you want, I'll let my comments stand on their merit.

Here, here, good that someone knows what they're talking. A $1M house with 20% down and a 3.75% interest rate has a PITI of $5,200 and that's with higher property taxes in Alameda County. If someone is making $185k and has about $300/mo in other debt, then the DTI ratio is about 36%. Lenders will go up to 43% DTI ratio. So plenty can technically afford a house. Then the hope is income will go up over time.

Sure, not ideal if you are conservative with money, but if someone wants to buy then they can. And as you mention there are places to live that don't cost $1M. Everyone seems to focus on the negative and think they will never be able to buy because it's not in the prime area that they want to be. I think Ultrarunner always says it best that one should buy where they can initially afford and then eventually get to the place they want to be. There are so many more that have done that over the last 20+ years than the 4 that Chuck discusses here.