How can anyone afford a house in SF area? (Oakland: mortgage, lawyer)

[neil0311]

I don't live in CA, but I've seen shows on HGTV where houses in SF and the surrounding area have been profiled. How (and better yet, why?) do people buy houses that are averaging $1 million, especially when they are little houses on postage stamp lots, and many need complete updating (probably to be gutted). "Fixer uppers" are running $800K. Anything decent with an updated kitchen or a decent size yard is going for well over a million.

Is everyone in SF a doctor, lawyer, CEO or lottery winner? How and why do people do it?

[humboldtrat]

A lot of us bought houses here 25 or 35 years ago when the prices were reasonable. It was possible at that time for blue collar workers to buy a home here and live the American dream - but not anymore .

[Puddy4LyF]

Hum, do you consider selling to the new residents and make a huge flip on your house? How much would you make (considering inflation) profit-wise if you sold today?

[Ultrarunner]

There are many homes in the area way under a million...

Oakland is adjacent to SF via the Bay Bridge and there are many homes available... 10 are priced less than 100k and 542 are priced at 250k or less.

If you don't like Oakland... nearby San Leandro has 24 homes priced at 250k or less and Richmond has 654 homes...

SF currently has 7 homes priced 250k or less...

I've never lived in a home with Cable so I can't comment on HGTV programming

[Ultrarunner]

Originally Posted by humboldtrat

A lot of us bought houses here 25 or 35 years ago when the prices were reasonable. It was possible at that time for blue collar workers to buy a home here and live the American dream - but not anymore .

I was at a House Warming last week in Castro Valley CA... The 4 bedroom home is older and sits on one acre and is zoned for Horses... Both the Husband and Wife drive trucks for a living and they have twin daughters... The Husband is non-union and works for a short haul inter-city line and the wife is union and works for UPS... both Blue Collar jobs and they had no problem buying a 700k home without any college education and they are in their 20's also...

Wages tend to be higher here... SF has I believe the highest minimum wage in the country at $9.36 per hour... I'm in the medical end of things and RN's average $50 an hour in the city and in the $40 range in the East Bay.

[Puddy4LyF]

Ultrarunner> that doesn't mean it was a prudent idea financially. Believe me, if that were my story, I wouldn't be bragging about it. Anyone with a half-a-mind financially wouldn't mortgage the rest of their life making less than 10 dollars per hour purchasing a 700K home. Go check out the list of foreclosures in the United States. We love debt.

[Ultrarunner]

Originally Posted by Puddy4LyF

Ultrarunner> that doesn't mean it was a prudent idea financially. Believe me, if that were my story, I wouldn't be bragging about it. Anyone with a half-a-mind financially wouldn't mortgage the rest of their life making less than 10 dollars per hour purchasing a 700K home. Go check out the list of foreclosures in the United States. We love debt.

The young Blue Collar couple earn about $135k per year and the Wife has a great benefit package working for United Parcel Service... the Husband has little in the way of benefits.

They did stretch to get into the home... but they rent a room to the Husbands sister for $500 month... so it works for them with their 90% fixed rate mortgage... besides, they are in their 20's... so their home will be paid off when they are in their 50's

Rents are rising dramatically here and I do think this couple does have some bragging rights and I wish them well...

[humboldtrat]

Originally Posted by Puddy4LyF

Hum, do you consider selling to the new residents and make a huge flip on your house? How much would you make (considering inflation) profit-wise if you sold today?

What would be the point in selling (or flipping) at this point. If you had bought a house in the 1970's for $45,000 and it's now worth $900K, you would end up paying an ugly tax on the gains. And in California, you would lose the benefits of Prop 13 on any future property taxes you would have to pay if you moved elsewhere in CA. People who bought a home before 1978 are paying very little property tax compared to a neighbor across the street who bought his house just a couple of years ago (even if the houses are indentical). You got to live somewhere - why bother moving?

[LetsGoA's]

Most people rent. Buying a 700k home on a 135 k salary with kids is suicidal if you ask me. Housing mortgage at a fixed rate should be 1/3 of your income if you want proper breathing room.

[Tallysmom]

Originally Posted by LetsGoA's

Most people rent. Buying a 700k home on a 135 k salary with kids is suicidal if you ask me. Housing mortgage at a fixed rate should be 1/3 of your income if you want proper breathing room.

You're ignoring the only reason our median home price is still so high is that the rich are still buying homes because they are the only ones that can afford to do so. That's skewing our median home value. If you could take the 1 million + value homes out of the equation I think you'd find our median house price is dropping like a rock.

People really like the idea of owning their own home -- and that is what has gentrified some of the hard core bad areas over the years. I hope when the dust settles from this mortgage mess it starts up again. I'd love to see why little area of Oakland get redone... just not HGTVed!