Job offer in SF....yes? no? hell no? (London: how much, buying)

[neutrino78x]

Originally Posted by Majami

Here is the rub, a single wage earner only supporting himself, making 200k a year can afford a 1 million dollar house. And comfortably at that.

[...]
A couple, combined income of 200k with 2 kids, cannot afford a 1 million dollar home.

That's a good point. Our Google couple above did not tell us if they have kids or whatever. Also if they have high debts (aside from the house) it would be a problem. Like if they're still paying off student loans.

But like I said, if you make 200k or more combined income, low debt, no kids, you can afford the 1 million dollar median SFH price in SJ and SF. You need to make a little more if you have the debt and kids and such, but it's not like you would then have to make 500k. No one is saying EXACTLY 200k. Ballpark figure.

It's actually not that uncommon. 100k is the entry level salary at Google for someone who just graduated with a BSCS degree. If you've been working there several years it is plausible to make 150, 200. Get together with a spouse that also makes over 100k and you can afford those SFHs. 150+150=300. 200+150=350. 200+200=400.

So basically they're being bought by tech couples, cardiac surgeons, lawyers, etc. Can I afford it? Most certainly not! What I can afford is to share a one bedroom apartment and not get a room to myself. It's not about what neutrino78x can afford.

I can afford to live here, yes. So can a million other people. Most of us can't afford the SFHs, however. But we stay because we don't need or want a SFH. At 100 or 150k, you can't afford the "SFH in an excellent school district" but you CAN afford a condo inside of a building containing other condos owned by other people. That is middle class around here. Not the SFH. I'm sure there are people who make 100k or so who own condos in those highrises in downtown San Jose. Graduate from SJSU, work at Yahoo or whatever for a few years, buy a condo.

We need a lot more highrises like that. If I had a job like that of Donald Trump, I would build a much larger residential building. Not in downtown because of the height restriction due to the airport, but maybe south San Jose, near one of the light rail stations. 100 story building filled with condos. That's the future. That's the way it should be; better for the environment and more efficient for city operations.

[ssmaster]

Originally Posted by neutrino78x

Definitely not a troll. Unlike most who post on here,I actually grew up in the Bay Area. I didn't come from Kansas, get sticker shock and decide to move back. I'm actually FROM here. So to me, it is normal that you wouldn't he able to own a SFH on the median salary. That's been the case all my life (I'm 38). I know that this is a dense area and is one of the most desirable places in the world to live. Naturally any SFHs still existing would be very expensive.

Move to Scottsdale so you can own a house? What?!?

As far as roommates, hate to break it to people not FROM here, but that is the normal lifestyle in the Bay Area among people who make less than the median income for the area.

San Francisco is regarded as more iconic than San Jose mainly by residents of San Francisco. Silicon Valley is ALSO known throughout the world. Silicon Valley is one of the world's great centers of innovation.

You keep espousing poorly thought out ideas.

It's not mainly San Francisco residents who feel San Francisco is more iconic than San Jose it is the 17 million tourists who visit San Francisco each year.

It is not population density responsible for high home prices. Cities like Chicago,Philadelphia and Miami have high population density and SFH are obtainable in those cities.

Around 94% of continental Americans live in areas were single family homes are representative of middle class lifestyle. This overwhelmingly represents what is considered middle class lifestyle in the USA.Cities like SF ,Boston and NYC are anomalous. There is not a separate definition of middle class lifestyle in these areas .it just means it costs more to obtain the American middle class lifestyle in these areas.

Cities like nyc ,London Paris and SF are expensive because extremely wealthy people want to live in these cities. Tech money is a small portion of all cash SFH sales in the Bay Area the largest segment of cash sales are just wealthy people who want to live in the area and enjoy the opera symphony restaurants etc. you would have to pay $2million or more to buy my next door neighbors home but the reality is that in the Bay Area that is not rich.

[Majami]

Originally Posted by neutrino78x

That's a good point. Our Google couple above did not tell us if they have kids or whatever. Also if they have high debts (aside from the house) it would be a problem. Like if they're still paying off student loans.

But like I said, if you make 200k or more combined income, low debt, no kids, you can afford the 1 million dollar median SFH price in SJ and SF. You need to make a little more if you have the debt and kids and such, but it's not like you would then have to make 500k. No one is saying EXACTLY 200k. Ballpark figure.

It's actually not that uncommon. 100k is the entry level salary at Google for someone who just graduated with a BSCS degree. If you've been working there several years it is plausible to make 150, 200. Get together with a spouse that also makes over 100k and you can afford those SFHs. 150+150=300. 200+150=350. 200+200=400.

So basically they're being bought by tech couples, cardiac surgeons, lawyers, etc. Can I afford it? Most certainly not! What I can afford is to share a one bedroom apartment and not get a room to myself. It's not about what neutrino78x can afford.

I can afford to live here, yes. So can a million other people. Most of us can't afford the SFHs, however. But we stay because we don't need or want a SFH. At 100 or 150k, you can't afford the "SFH in an excellent school district" but you CAN afford a condo inside of a building containing other condos owned by other people. That is middle class around here. Not the SFH. I'm sure there are people who make 100k or so who own condos in those highrises in downtown San Jose. Graduate from SJSU, work at Yahoo or whatever for a few years, buy a condo.

We need a lot more highrises like that. If I had a job like that of Donald Trump, I would build a much larger residential building. Not in downtown because of the height restriction due to the airport, but maybe south San Jose, near one of the light rail stations. 100 story building filled with condos. That's the future. That's the way it should be; better for the environment and more efficient for city operations.

Keep in mind the mortgage on a 1 million dollar, 30 year fixed, is not 5-6k, it's more like 4k. Then when you pay property taxes, insurance, and possibly HOA, it can become 5-6k.

Now also keep in mind, your 4k mortgage payment is composed of principal + interest. During the first 20 years of your payments, the vast majority of this 4k is actually interest, and *not* towards your principal. Why this is significant is because you can deduct the interest from your taxes, so in a way your 4k mortgage payment, especially in the first 20 years, is even less.

But to sum it this way, 200k a year, over 30 years, is 6 million dollars. Taxed, it's probably closer to 4 million dollars. Your 1 million dollar home with interest will be more like 1.4 million dollars, so in turn you have 2.6 million dollars of living expenses over the next 30 years (not taxed).

2.6 million dollars divided by 30 is close to 87,000k a year. On spending expenses with property and taxes already taken care of.

Can 1 person live on a 87,000k a year and save for retirement? Yeah they can, and treat themselves to vacations too.

Can 2 people? Yeah, with some cuts to lifestyle.

Can 4 people? No, especially when you're saving for college for the other two

[Majami]

Originally Posted by ssmaster

Cities like nyc ,London Paris and SF are expensive because extremely wealthy people want to live in these cities. .

This is not true, the super wealthy drive up real-estate in the luxury markets. You mentioned Miami, which is important since lots of wealthy people want to live in Miami. In 2015, a condo sold in Miami for 60 million dollars. This is not a home, but a condo. I'm pretty sure this is higher than any house sold in the entire Bay Area.

But overall, the housing market is lower in Miami than San Francisco. That's because the wages in Miami are lower, significantly so than in San Francisco. So regular markets in Miami are lower, but luxury markets are higher than in San Francisco.

[ssmaster]

Originally Posted by Majami

This is not true, the super wealthy drive up real-estate in the luxury markets. You mentioned Miami, which is important since lots of wealthy people want to live in Miami. In 2015, a condo sold in Miami for 60 million dollars. This is not a home, but a condo. I'm pretty sure this is higher than any house sold in the entire Bay Area.

But overall, the housing market is lower in Miami than San Francisco. That's because the wages in Miami are lower, significantly so than in San Francisco. So regular markets in Miami are lower, but luxury markets are higher than in San Francisco.

Miami is not in the same league as Paris New York London and San Francisco.culturally and as finacial centers.the wealth from Wall Street , London stock exchange and Euronext. Miami is not even close

[Majami]

Originally Posted by ssmaster

Miami is not in the same league as Paris New York London and San Francisco.culturally and as finacial centers.the wealth from Wall Street , London stock exchange and Euronext. Miami is not even close

What you are talking now is job creation, wages, and not where the wealthy want to live. Ofc, Miami's economy is far behind that of New York's for example but when it comes to where wealthy want to live, have a second home, Miami is pretty much tops in the USA.

Now the significant reason I bring this up is to address the affect of this wealth on real-estate. In the case of Miami, it has one of the most expensive luxury markets in the USA, and the world but that hasn't trickled completely to the regular markets which are supported via local wages.

Put it this way, to determine affordability we need to take into account both real-estate values and local wages. One way to gauge this is to look at the share of the population renting, since they're probably renting because they cannot buy.

According to data for 2013, it stands this way

1)65% of households in Miami rent.
2)64% of households in New York rent.
3)57% of households in San Francisco rent.

Renters Are Majority in Big U.S. Cities - WSJ

So it's inaccurate to say households are more affordable in Miami, they actually are not despite being cheaper, since local wages are depressed as well.

But this says nothing about the luxury markets, which is the domain of the desires of the super wealthy.

[jade408]

What's different about let's say Miami vs the Bay Area. In Miami someone making let's say 20-25% over median wages can own in a fairly nice place with a decent commute, in a family sized home, with a pretty good school district. In the Bay Area that is impossible. You need double the median to think about it.

[neutrino78x]

Originally Posted by ssmaster

It's not mainly San Francisco residents who feel San Francisco is more iconic than San Jose

Yes, it is. It is rivalry. We get millions of tourists in Silicon Valley, too.

It is not population density responsible for high home prices. Cities like Chicago,Philadelphia and Miami have high population density and SFH are obtainable in those cities.

They are obtainable here, too, just not at the median income.

Chicago, Miami and Philadelphia are large but not necessarily as dense as SF and SJ. It is a combination of density and desirability, among many other factors.

Around 94% of continental Americans live in areas were single family homes are representative of middle class lifestyle. This overwhelmingly represents what is considered middle class lifestyle in the USA

Whatever, man. Bottom line is that middle class is what one can afford at the median income in a given area. Here in the Bay Area that's a condo. In Smallville, Kansas, it would be a SFH.

And yes, tech couples are a significant part of the sfh owners here. Tech is one of the industries that provide the highest income jobs.

[ssmaster]

Originally Posted by neutrino78x

Yes, it is. It is rivalry. We get millions of tourists in Silicon Valley, too.




And yes, tech couples are a significant part of the sfh owners here. Tech is one of the industries that provide the highest income jobs.

Most rankings put Chicago Miami and Philadelphia ahead of San Jose in regards to density.

I said Tech workers are not a significant amount of all cash buyers
Most of the Bay Area's All-Cash Buyers Don't Work in Tech - Curbed SF


A physician couple
Physician and finance executive
Finance executive and partner in accounting firm
Corporate lawyer and finance executive
Physician and partner in accounting firm

These couples will easily make $400,000+
There a plenty of non tech careers that are more lucarative than average tech careers
T

[Majami]

Originally Posted by jade408

What's different about let's say Miami vs the Bay Area. In Miami someone making let's say 20-25% over median wages can own in a fairly nice place with a decent commute, in a family sized home, with a pretty good school district. In the Bay Area that is impossible. You need double the median to think about it.

In Miami a median home is about 500-600k, in a fairly average neighborhood with not very good schools.

The median income in Miami is 46k. 25% above the median is 58k.

This is why there are more renters in Miami than San Francisco.