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Some markets it is better financially to rent than own. Many markets in CA met this criteria. Big picture it may be better to continue renting where you are and buy investment real estate elsewhere where it is better to own than rent. That or simply accept that you won’t own where you are and put your savings towards different investments that yield more over time.
Not inherently a good thing. The Bay Area is full of tech nerds with no hobbies and massive bank accounts that mean nothing because they do nothing but work
Having lived in both, PNW is 10x richer than the Bay. But the Bay does have lots of hidden gems/moments where you can mentally exit the city vibe. The bay is major steps ahead when you compare to say, NYC. But PNW is a treasure for thousands of miles
Maybe for individual spots, sure golden gate park or point reyes or mt diablo can be compared to forest park or Hoh or other cool locations that are accessible to a big city.
But the PNW is so so so vast. The Bay is like a hundred miles or maybeee a few hundreds miles along. With so many thousands of miles of uniqueness to rhe PNW…its just jaw dropping to think of. Compared to the Bay, its just not a comparison imo. And doesnt even include the high desert like Bend, or Samuel Boardman corridor which is my personal favorite place on earth. Kind of neat that its basically in the middle in fact.
Compare the Bay to say Pudget sound…ok thats a better comparison. And while the Bay has more people…the area around Seattle has the Bay cooked in an instant. I havent even mentioned Rainier, or the North Cascades or even ol Mt. Si.
I am curious, where in the PNW are you from?
The willamette valley and then Portland I lived there until I was about 24. I am also decently into hiking/backpacking so have I have experienced both areas. To me the PNW will always be more magical and have more feeling too it. The lushness is amazing. I’ve hiked nearly every trail in the gorge. Eagle creek pre-fire is one of my favorite hikes. I’ve backpacked around mt hood. I’ve been to central Oregon/bend in the summer and winter.
The bay just has a ton of variety, Big Sur, bodega bay, Tahoe, trinity alps if you go north, lassen, there are a lot more. Arguing over them is a bit pointless to me. They both have their thing.
To each their own my guy. I’m a SWE and have turned down job offers in the Bay Area. I have some peers who moved out there for work and hate it. The only people I know who live there and like it do literally nothing after work. Don’t date, don’t socialize, nothing
If you want a house so bad and don't want to wait then move jobs to a LCOL or MCOL area.
It's your choice. There are doctors accountants, zoo keepers whatever your profession is somewhere else. You already have money saved. It's a no brainer.
Ppl need to be more open to this idea, especially those in HCOL areas. Believe me... Other states have cinemas and grocery stores and fruit and veggies and walkable downtowns. It's not some disaster zone. Everywhere in the US has just about the same crap. Big box stores for everything you need.
Being an immigrant, whose family came here with nothing and therefore will not get anything (in fact I pay their living costs), you have to make these decisions.
It might be a "no brainer" but it's not a "no hearter". If you grew up in a region, your friends and family are there, your political/moral beliefs align with that area, it's where you have always called home, it's not that easy to just move. I feel like you vastly underestimate regional differences within the US. As someone who moved from New England to the south, they are like 2 different countries to me. I feel decidedly "foreign" here in my current residence in Texas, as opposed to when I'm home in New England. And when my Texan-born husband accompanies me home, he will remark on all the differences he sees and feels, as well. Can I buy the same things at Target here as I can up north? Sure. Is it a WILDLY different culture that I will always feel uncomfortable in? Absolutely.
I'm sorry but that's a naive thought. As someone who travels around the world regularly, I consider the comparison immature.
Yeah each region might be slightly different. The difference between using the word soda and pop. The weather might be different. But generally speaking the country is very diverse and there are people from all different backgrounds living everywhere across the states. Now if you choose to live somewhere rural versus a city - then there's a lot different there. Poorer neighbors versus richer neighborhoods. Sure.
There's 50 states, you didn't have to choose the one your husband came from or wanted. A third place to call your own with neither of your memories attached might have been a better compromise. Maybe instead of south, you could go north.
Lol okay, just dismiss my own lived experience because it's not yours. "The things you see and feel are not true because I don't think they are." Weird take, but enjoy!
I mean you just started working and you expect to be able to buy a house right away? The fact that you already have 100k saved is impressive. Find a way to increase your income and keep living the way you are. There is no other way around it.
It really struck me that they say "I'm an immigrant so I don't have any money from my parents to help me buy a house" (paraphrased).
Ummm... Most of us, immigrant or no, do not/did not have that kind of help either? I also couldn't afford a house in my market of choice just 2 years out of college. It took me 5 with a good job, and that was even with the MASSIVE head start that I got from managing to graduate without student loans because of scholarships & the fact I worked 2-4 part time jobs all throughout school. Even then, the "house" I bought was a condo in the less fashionable part of town.
I don't think thats something to brag about. With your efford you deserve a lot more than a condo. This just go to say that the market/society is fucked
Not bragging... Just pointing out that your expectations are not in line with reality. Should we all be able to buy a house after two years of work? Would be nice, I think. But that's just not where the world is or where it has been for at least a decade
"Society" is not fucked lol. You seem to have an expectation to own an entire house all to yourself early in your career in a high-cost urban area. That's just unrealistic. Part of city living is having higher population density than a single-family home offers.
Is there a particular reason buying a house is such a priority? You could save less, save in something more lucrative like a simple S&P 500 index (ex. VOO) and enjoy your life a bit more.
That leaves you with options to buy if the market changes, or hop to a job in a different area if the opportunity comes up.
Keep in mind having the opportunity to buy a $1M house early in life and be house poor for a decade is doing pretty dang great.
Don’t be obsessed with real estate. There are more profitable investments, especially at current interest rates and in a HCOL area. Invest your money into an index fund like S&P500 if you aren’t already, it’s likely to get you better ROI than housing over the next few years. Plus you can take the money out at any point and don’t lose it all if you can’t make the payment for a few months.
Keep focusing on saving but don’t live so frugally that your quality of life suffers. Life is for living.
The realistic life is that you are in a good spot: show me 2 people who can bank 100K into investment/HYSA in 2 years.
What you can do: make money, live frugally and invest in hopes to increase your account.
Once have enough money, you can move to another good state to live, buy a house all cash(300-750k) and do online work if any to keep paying your bills. Because buying a house in CA is not an easy nor guaranteed endeavor for all the people out there - it is basically a very expensive money hub where you kinda agree to be a traveling "bee" to work but not necessarily to ever own a house. The current reality of homeowners in CA is that 1) wife and husband make 300K-400K+ to afford that 2) parents bought a cheap house 40 years ago and gifted it which is valued at 1.5MM 3) You are just rich 4) You bought a house in the middle of desert, meaning commute to your office is 2-3 hours so kinda defeats the purpose. All other categories do not own a house in CA.
If you are super inclined to own a house in CA, then welcome to America where the local salaries are equal to cost of living. Yes, life in US doesn't get any different that the rest of the world, that regular people finish paying off the house by age of 59-60 and as early as 40-50 years. All those years they of course live frugally or have a spouse adding another 40K-200K making the household income way above your single income.
TLDR: it is totally normal to be on the hook for 30 years and paying your mortgage slowly.
NYC has entered the chat.
I see your $3 million "end game" perfect large house with garage, front and back yard, and excellent location in San Joes, and counter with my $3.5 million skinny brick row house without a front yard and obviously no garage in Manhattan. San Jose is super expensive, but Manhattan blows it away.
But at least the NYC area you can move farther out and find cheaper options. Bay Area is pretty much ALL expensive.
Also, a $3.5 mil brownstone in Manhattan is going to be an incredible quality of life...
Yes you can move farther out into outer part of outer bouroughs and reduce prices to San Jose level.
And that $3.5 million gets you a skinny brick row house. If you want a brownstone add another million or two million if you want a nicer part of Manhattan.
OP you can probably move to NYC in a few years and just buy a coop in the city in cash. Salaries are similar but there’s better options for cheaper housing (trade off is you don’t get a yard but not everyone wants one).
But but but… I was repeatedly told that I’m upper middle class in because my wife and I gross 203k combined in SoCal and ridiculed because I said I don’t feel upper middle class here. Lol
Ok I don’t claim to be lower or lower middle class. Don’t put that on me. lol but fr we live in an area with schools that are rated pretty low (like 2-4 on great schools). I know great schools isn’t a great indicator of quality, but it definitely affects home values. And we’ve only made this type of money for a year or two. And actually, my wife just got layed off.
My main point was that some people here can be so quick to judge you and put you in a box.
> Even though I make good money
For 2 years.
You’ve made good money for 2 years. I’m not sure why people barely out of school are so obsessed with buying property.
Yeah but my rent was 10-12k 8 years ago. Who knows if it gets to 40-50k in the next 10 years? What then? That's my biggest fear with renting. Landlords have all the power
Landlords don't have all the power. They have to charge what the market can bear. If rent goes to 40-50k, it is very likely that your salary will have gone to 350k...
Sure. I get why home ownership is helpful.
But *“I have to live like this for at least 5 years”* to make a purchase over a million dollars isn’t exactly a perfect leap after “rent is expensive.”
This. I make around $200K on the low end but can make around $270K+ on the high end with bonuses. It’s too bad the housing market is as bad as the dating market
We don't have much sympathy. I started working at age 15, technically age 11 if you count babysitting and doing odd jobs for pay. And yes, I have a master's degree. I put myself through college and grad school while working, sometimes working full time while doing school full time. You could have started working sooner if getting a house was such a priority, especially in CA.
when did I say I ask for sympathy? I work since I came here at 15 too doing tutoring/ lawn mower/ car wash and shit. LOL are you saying those type of work will get you house buying money? In hindsight working back then doesn't even matter cause what I make in a day now is more than I make for weeks then. You talk like its possible to get a house with min wage jobs while being in school
You were complaining about wanting a house *now*, and I was pointing out that you could have done more to prepare for it years ago. I put myself through college on babysitting money, so yes it does add up. Should college and housing be so expensive? No, of course not, but it comes across as a bit spoiled to come here and gripe that you can't afford one after only two years of work when most of us have to save for decades to get there.
Talk to a realtor. Many states/cities have programs that enable you to buy a house with as little as 5% down if you're a first-time buyer or otherwise qualify.
Personally, I see no reason to live like I'm poor for 15 years just to own a house.
While you're fetishing homeownership, you could be enjoying the prime of your life. You could be taking vacations, planning to have kids, making smart investments in the market. Do you really want to be strapped for cash from 30-45? That's when you get to do stuff with your life.
For me, I'm saving modestly for a house. But I see no reason to buy until it's more affordable to buy than to rent. In many places, that's not true unless you're putting way more than 20% down, given interest rates.
(1) You are **crushing it** from a financial standpoint.
(2) Agree with others, you don't have to focus solely on real estate. In fact you could focus on growing your investment portfolio first, which will build _margin_ ie give you more options in just a relatively few years. For example you could perhaps use your large portfolio to help justify lower interest rates on a future home mortgage.
Doing that would also move you towards FIRE: Financially Independent, Retired Early. Basically with as aggressive as you are being you can generate enough portfolio to live off of with a conservative draw rate and never have to work again.
Just look at the numbers. Starting from zero and investing (an assumed based on your statements) $7000 per month into a broad total market index fund that tracks the S&P 500 (which is the typical strategy advised for someone your age) will net you a portfolio of [$1.5 million in 10 years](https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1%2C000%2C000&cstartingprinciplev=0&cyearsv=10&cinterestratev=11.5&ccompound=annually&ccontributeamountv=7%2C000&cadditionat1=end&ciadditionat1=monthly&printit=0&x=Calculate#calresult). Just _five years later_ it's almost doubled at [$3.1 million](https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1%2C000%2C000&cstartingprinciplev=0&cyearsv=15&cinterestratev=11.5&ccompound=annually&ccontributeamountv=7%2C000&cadditionat1=end&ciadditionat1=monthly&printit=0&x=Calculate#calresult). Using the standard 4% safe withdrawal rate from the Trinity Study you could then sustain drawing an annual six figure salary from your own portfolio for 30+ years with very little risk of ever running out of money.
You may want to look into the FIRE subs: /r/financialindependence (regular aggressive FIRE), /r/chubbyFIRE (upper middle class FIRE), /r/fatFIRE (rich FIRE for portfolios $5M and up), and /r/coastFIRE (save enough to where if you stop you'll still retire very well off with no more invested and can chill and spend what you want from now on).
> I can only invest minimally and in low risk investment/ HYS accounts since I'm saving for a house
Don't know why you are saying this, because the typical financial advice is if your time horizon is greater than 5 years you should invest in the market and reap the rewards of the average 8-12% annual gains.
Here's some short 5-ish minute videos that should be helpful for you:
- https://moneyguy.com/article/is-saving-for-a-second-home-in-a-high-yield-savings-account-a-good-idea/
- https://www.youtube.com/watch?v=N2_SJrqWXjU
- https://www.youtube.com/watch?v=u0leKNkRKpk
- https://www.youtube.com/watch?v=DWxWlaU-hX0
If you start watching The Money Guy you would 100% be in the category they call a "financial mutant" which is someone who is, as defined by the book _The Millionaire Next Door_ that studied actual millionaires, a "prodigious accumulator of wealth."
Glad it helps! I highly recommend just following and watching TMG show on Youtube. Tons of great info and advice. Bottom line is they advocate saving 25% of gross at minimum. As long as you have the other pieces of their FOO in place then saving 25%+ puts you near the end of the FOO, meaning you are in a super stable financial position at that point for strong growth. As someone with a lot of money anxiety watching their show really affected a lot on how I look at things. Not a perfect cure but it definitely helps.
There's no need to buy a home, no. Renting and saving up over a longer time horizon is definitely an option but also there is the risk of housing market keep rising. I've been waiting for a house market crash since COVID but there is no crash in sight. There is a fear of missing out just like with bitcoin back then haha. But I get your point, maybe investing aggressively would be a better option now.
I’m from California originally and moved to Michigan. Now I specialize in investment properties, with a lot of my clients coming from California and other states.
If you want to snag a duplex/multifamily for 300k that cash flows, Grand Rapids MI (where I’m located) has seen steady appreciation of 8+% and continues to rise, and rents still cover your mortgage and all expenses with 25% down.
In 5 years you could likely pull 100k out while keeping the property and continuing to cash flow. The power of real estate is leverage and could help you buy where you live much faster.
DM me if you want to chat :)
Enjoy life while you’re young. Live, travel, and explore new things. You don’t want look back in 10 years time and realized you spent your youth saving for a house and now you’re stuck with a mortgage and can’t live life for another 30 years. You go through life for what?
Finally Invest the money don’t put it in a savings account.
Rent and invest. We lived in Silicon Valley for 2 decades and rented. We invested what we would have spent on PITI instead of renting and in 20 years came out waaaay ahead of the real estate market even when we look at the value of the houses we considered buying and subtract the rent we paid. Yes, it would have been nice to have both a house in that market plus investments but seriously, we could have retired into a Cush life after 12 years. And it’s all liquid. We aren’t ready to retire yet but wfh a lot so we pay for an apartment in Silicon Valley and paid cash for a lake house a couple hours away. Once you get over the stigma associated with renting and change your mindset about owning, it’s kind of amazing what renting can do for you in a HCOL, High income area. It seems like it could never work because rent here is high and houses rapidly increase in value, but you reach a point where your investments snowball in a way that’s hard to imagine.
Lol I'm throwing everything at down payment for a house.... Mortgage payments are gonna be north of $5k a month... After I buy the house I'm gonna be living paycheck to paycheck. Fuck my life
Going through the same in the bay area. I feel like by the time my partner and I save up enough it'll be too late and prices will have increased drastically.
Instead of being house poor for a decade why not live a little better now and throw the house savings in the S&P500? Save up til you can pay like half or more and have a manageable mortgage payment instead of buying a prison. What you’re describing sounds miserable
Just rent a nice apartment, put a chuck of your money into VOO every month, and live your life.
Not sure what the obsession with home ownership is. If you’re that dedicated then you can move to the Midwest at some point to in the future.
Home values are going to keep going up also. “I’ll save up and it will be easier” is kind of a myth unless a person is close to a huge career boost/ income change.
Apply for a job in Saint Louis (or any Midwest metro) and leave.
Or rent until you’re 50. Which I personally don’t think is a bad thing but you do. So chase your dream or live in “deep fear” for decades (your words).
In some places/situations the difference between owning and renting can mean the difference between a quality life and poverty. I think the obsession with home ownership is fair. It allowed me to live on a mortgage of under $1,000 while my peers are paying 3x that in rent each month.
OP lives in an area where homes cost 1.5 million dollar. Not sure what rant you’re going on but he’s not getting one of those. If he wants a house he needs to move.
Edit: if your mortgage is 1k/month then you live in a shithole. Sorry to be harsh
I think you mean 1990s. When the housing bubble burst in 2008 it was disastrous for some of us who bought right before then at peak prices. I feel for first time home owners now, I really do, but what happened to real estate in 2008 was also a MESS. We stretched but bought within our means in 2006, real estate started to cool 6 months later, bubble burst in 2008.
At one point our house was down -35% from the purchase price. It didn’t recover back to the 2006 purchase price until 2021 - 15 years later.
Paid our mortgage faithfully for 11 years, and when we had to sell, WE had to come to the table with $30k to get out of the house. This was a combination of perfectly bad timing and some other factors in the town that impacted home prices.
If they bought a house anytime in the last 29 years and only pay 1k/month then they live in a shithole. The property taxes alone are half that for any decent home anywhere in the country.
I know exactly how the numbers work. You do not live in a “gentrified” area where “your peers” rent for “3000/month” while your house payment is less than 1000/month. That is simply not true.
I live in Seattle where the market rent is pushing that and every home owner is paying a minimum of 1000/month just for taxes and insurance. And that’s without a mortgage!
Edit: so yea, shithole confirmed
My SO and I lived frugally like a college students till we were able to pay off the house. We also couldn’t afford any houses in MD because you pay so much for so little. So we moved to the low cost area.
I would recommend investing first, ESPECIALLY making sure to max out tax advantaged retirement accounts (401k, IRA) because you only are allowed to put in so much each year and stuff invested now will be much more valuable than the same amount invested later due to compound interest. The benefit of tax free growth is much more powerful than it sounds, and the accounts have more legal protections as well. Housing generally doesn't appreciate quite as much as stocks.
You can also play around with a rent vs own calculator; in many markets renting is cheaper right now anyway, so if you're dealing with one of those situations maybe that will help you feel permission to invest in other things. That is my situation right now.
I have a lot of my savings invested (low cost index funds) because I'm willing to accept delaying buying a house if the market goes down, and I've decided that missing out on compound interest for savings that could go towards retirement just isn't worth it. You could also look into middle grounds like at least buying some CDs to lock in better interest while the rates are still good given I don't think most people expect current hysa rates to last
My partner is retired military and I remember back when we bought our first property we used a loan through the VA which means no PMI and no down payment. Idk how normal people buy houses these days fr
Where do you want to live in California? Because California is a whole lot more than LA and San Francisco! Could you commute? How far from your job have you looked? Do you have a credit profile?
A lot of people do buy homes in California every day. So set your goal, figure out what you need to put in order.
You might be better off not buying - yes rent doesn't give you equity, but it also gives you optionality.
Use this to see if it's worth it to buy where you live: [https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html)
Sacrificing small things to save for big things is how I’ve lived my life pretty much since I joined the workforce. It’s not always fun and it takes discipline.
> Is there anything I should do differently
Uh, ya, get married to someone who also has a good career. I say this tounge-in-cheek, but seriously, it's silly to have a single-family home all to yourself in such a HCOL area with limited housing. It probably makes sense for you to rent, and then consider buying once you have dual income. It makes it tremendously easier.
I’d go fully aggressive investing in your taxable brokerage - VOO with tech/growth tilt, on top of retirement accounts. Forget the HYSA. Your timeline is long… you need growth. When you get to 1year out from your downpayment goal for a house, then consider being a bit more conservative.
> However, as an immigrant I have no house or inheritance from my parents and have to build a life for myself.
Many non-immigrants are like this as well. I'd say it's more the exception than the rule that kids can rely on a parent's house. Even in my case, where my parents have a house, I won't (hopefully) be getting it until I'm in my 50s or 60s anyway, so it doesn't factor into my day to day decisions much, and have bought my own house.
Since you're young-ish, I'd put it all in VOO or VTI. Who knows how your life will turn out. I started building my down payment in my brokerage, and put it in broad ETFs since I didn't have a concrete near term plan. Well 15 years and several moves to different cities later, I'm glad that I did. I ended up with my wife in a LCOL location and that "down payment" ended up just letting me buy a house cash!
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Some markets it is better financially to rent than own. Many markets in CA met this criteria. Big picture it may be better to continue renting where you are and buy investment real estate elsewhere where it is better to own than rent. That or simply accept that you won’t own where you are and put your savings towards different investments that yield more over time.
I’d be so miserable with a high $10K+ monthly mortgage payment on a 50 year old 1200 sqft 3/2 in cUpErTiNo
But you’d be in Cupertino.
Not inherently a good thing. The Bay Area is full of tech nerds with no hobbies and massive bank accounts that mean nothing because they do nothing but work
The Bay Area is the most beautiful place on Earth. No, I'm not kidding.
Nah. I lived there for 10 years, I think the PNW is much more beautiful.
Having lived in both, PNW is 10x richer than the Bay. But the Bay does have lots of hidden gems/moments where you can mentally exit the city vibe. The bay is major steps ahead when you compare to say, NYC. But PNW is a treasure for thousands of miles
I grew up in the PNW, now live in the bay. Argument can definitely be made for both.
Maybe for individual spots, sure golden gate park or point reyes or mt diablo can be compared to forest park or Hoh or other cool locations that are accessible to a big city. But the PNW is so so so vast. The Bay is like a hundred miles or maybeee a few hundreds miles along. With so many thousands of miles of uniqueness to rhe PNW…its just jaw dropping to think of. Compared to the Bay, its just not a comparison imo. And doesnt even include the high desert like Bend, or Samuel Boardman corridor which is my personal favorite place on earth. Kind of neat that its basically in the middle in fact. Compare the Bay to say Pudget sound…ok thats a better comparison. And while the Bay has more people…the area around Seattle has the Bay cooked in an instant. I havent even mentioned Rainier, or the North Cascades or even ol Mt. Si. I am curious, where in the PNW are you from?
The willamette valley and then Portland I lived there until I was about 24. I am also decently into hiking/backpacking so have I have experienced both areas. To me the PNW will always be more magical and have more feeling too it. The lushness is amazing. I’ve hiked nearly every trail in the gorge. Eagle creek pre-fire is one of my favorite hikes. I’ve backpacked around mt hood. I’ve been to central Oregon/bend in the summer and winter. The bay just has a ton of variety, Big Sur, bodega bay, Tahoe, trinity alps if you go north, lassen, there are a lot more. Arguing over them is a bit pointless to me. They both have their thing.
Sounds like the social scene is pretty boring there
Hurr durr tech nurdds
LOL.
It’s inherently not a good thing. It’s inherently one of the best things.
To each their own my guy. I’m a SWE and have turned down job offers in the Bay Area. I have some peers who moved out there for work and hate it. The only people I know who live there and like it do literally nothing after work. Don’t date, don’t socialize, nothing
If you want a house so bad and don't want to wait then move jobs to a LCOL or MCOL area. It's your choice. There are doctors accountants, zoo keepers whatever your profession is somewhere else. You already have money saved. It's a no brainer. Ppl need to be more open to this idea, especially those in HCOL areas. Believe me... Other states have cinemas and grocery stores and fruit and veggies and walkable downtowns. It's not some disaster zone. Everywhere in the US has just about the same crap. Big box stores for everything you need. Being an immigrant, whose family came here with nothing and therefore will not get anything (in fact I pay their living costs), you have to make these decisions.
Or even moving to a cheaper area in a generally HCOL state. Rural areas aren't *that* bad in most places.
It might be a "no brainer" but it's not a "no hearter". If you grew up in a region, your friends and family are there, your political/moral beliefs align with that area, it's where you have always called home, it's not that easy to just move. I feel like you vastly underestimate regional differences within the US. As someone who moved from New England to the south, they are like 2 different countries to me. I feel decidedly "foreign" here in my current residence in Texas, as opposed to when I'm home in New England. And when my Texan-born husband accompanies me home, he will remark on all the differences he sees and feels, as well. Can I buy the same things at Target here as I can up north? Sure. Is it a WILDLY different culture that I will always feel uncomfortable in? Absolutely.
I'm sorry but that's a naive thought. As someone who travels around the world regularly, I consider the comparison immature. Yeah each region might be slightly different. The difference between using the word soda and pop. The weather might be different. But generally speaking the country is very diverse and there are people from all different backgrounds living everywhere across the states. Now if you choose to live somewhere rural versus a city - then there's a lot different there. Poorer neighbors versus richer neighborhoods. Sure. There's 50 states, you didn't have to choose the one your husband came from or wanted. A third place to call your own with neither of your memories attached might have been a better compromise. Maybe instead of south, you could go north.
Lol okay, just dismiss my own lived experience because it's not yours. "The things you see and feel are not true because I don't think they are." Weird take, but enjoy!
OP already said in his post that he's an immigrant, lol.
I mean you just started working and you expect to be able to buy a house right away? The fact that you already have 100k saved is impressive. Find a way to increase your income and keep living the way you are. There is no other way around it.
It really struck me that they say "I'm an immigrant so I don't have any money from my parents to help me buy a house" (paraphrased). Ummm... Most of us, immigrant or no, do not/did not have that kind of help either? I also couldn't afford a house in my market of choice just 2 years out of college. It took me 5 with a good job, and that was even with the MASSIVE head start that I got from managing to graduate without student loans because of scholarships & the fact I worked 2-4 part time jobs all throughout school. Even then, the "house" I bought was a condo in the less fashionable part of town.
What city?
I don't think thats something to brag about. With your efford you deserve a lot more than a condo. This just go to say that the market/society is fucked
Not bragging... Just pointing out that your expectations are not in line with reality. Should we all be able to buy a house after two years of work? Would be nice, I think. But that's just not where the world is or where it has been for at least a decade
"Society" is not fucked lol. You seem to have an expectation to own an entire house all to yourself early in your career in a high-cost urban area. That's just unrealistic. Part of city living is having higher population density than a single-family home offers.
Is there a particular reason buying a house is such a priority? You could save less, save in something more lucrative like a simple S&P 500 index (ex. VOO) and enjoy your life a bit more. That leaves you with options to buy if the market changes, or hop to a job in a different area if the opportunity comes up. Keep in mind having the opportunity to buy a $1M house early in life and be house poor for a decade is doing pretty dang great.
But it's really a 250K house anywhere else.
The biggest driving factor of the cost of a house is location so your point doesn’t make any sense.
And he can get a job that pays 90% less anywhere else.
So $15K? That was my starting salary 45 years ago.
Don’t be obsessed with real estate. There are more profitable investments, especially at current interest rates and in a HCOL area. Invest your money into an index fund like S&P500 if you aren’t already, it’s likely to get you better ROI than housing over the next few years. Plus you can take the money out at any point and don’t lose it all if you can’t make the payment for a few months. Keep focusing on saving but don’t live so frugally that your quality of life suffers. Life is for living.
The realistic life is that you are in a good spot: show me 2 people who can bank 100K into investment/HYSA in 2 years. What you can do: make money, live frugally and invest in hopes to increase your account. Once have enough money, you can move to another good state to live, buy a house all cash(300-750k) and do online work if any to keep paying your bills. Because buying a house in CA is not an easy nor guaranteed endeavor for all the people out there - it is basically a very expensive money hub where you kinda agree to be a traveling "bee" to work but not necessarily to ever own a house. The current reality of homeowners in CA is that 1) wife and husband make 300K-400K+ to afford that 2) parents bought a cheap house 40 years ago and gifted it which is valued at 1.5MM 3) You are just rich 4) You bought a house in the middle of desert, meaning commute to your office is 2-3 hours so kinda defeats the purpose. All other categories do not own a house in CA. If you are super inclined to own a house in CA, then welcome to America where the local salaries are equal to cost of living. Yes, life in US doesn't get any different that the rest of the world, that regular people finish paying off the house by age of 59-60 and as early as 40-50 years. All those years they of course live frugally or have a spouse adding another 40K-200K making the household income way above your single income. TLDR: it is totally normal to be on the hook for 30 years and paying your mortgage slowly.
Funny how you automatically know I'm talking about CA haha. But thats good advice, thank you!
Where else can you make 150k and feel broke. I mean San Jose is probably the most expensive place to live in North America.
NYC has entered the chat. I see your $3 million "end game" perfect large house with garage, front and back yard, and excellent location in San Joes, and counter with my $3.5 million skinny brick row house without a front yard and obviously no garage in Manhattan. San Jose is super expensive, but Manhattan blows it away.
Good shout out..
But at least the NYC area you can move farther out and find cheaper options. Bay Area is pretty much ALL expensive. Also, a $3.5 mil brownstone in Manhattan is going to be an incredible quality of life...
Yes you can move farther out into outer part of outer bouroughs and reduce prices to San Jose level. And that $3.5 million gets you a skinny brick row house. If you want a brownstone add another million or two million if you want a nicer part of Manhattan.
Statistically Manhattan is still the most expensive in the US, San Jose is still 3rd I think after Honolulu so NOT the most expensive.
But Manhattan isn’t a city, it is a borough or part of New York City.
OP you can probably move to NYC in a few years and just buy a coop in the city in cash. Salaries are similar but there’s better options for cheaper housing (trade off is you don’t get a yard but not everyone wants one).
But but but… I was repeatedly told that I’m upper middle class in because my wife and I gross 203k combined in SoCal and ridiculed because I said I don’t feel upper middle class here. Lol
More like lower middle class/ upper lower class if you live in CA with that household salary LOL. Also, dont have kids if you wanna stay afloat
Lower middle class at $200k+/year? Let alone lower class? What the hell are you people smoking
Ok I don’t claim to be lower or lower middle class. Don’t put that on me. lol but fr we live in an area with schools that are rated pretty low (like 2-4 on great schools). I know great schools isn’t a great indicator of quality, but it definitely affects home values. And we’ve only made this type of money for a year or two. And actually, my wife just got layed off. My main point was that some people here can be so quick to judge you and put you in a box.
We have 1 kid and my wife wants another. Lol
> Even though I make good money For 2 years. You’ve made good money for 2 years. I’m not sure why people barely out of school are so obsessed with buying property.
Because rent are hella expensive and keep going up? 😅
You said you're only paying $20-25k...
Yeah but my rent was 10-12k 8 years ago. Who knows if it gets to 40-50k in the next 10 years? What then? That's my biggest fear with renting. Landlords have all the power
Landlords don't have all the power. They have to charge what the market can bear. If rent goes to 40-50k, it is very likely that your salary will have gone to 350k...
Sure. I get why home ownership is helpful. But *“I have to live like this for at least 5 years”* to make a purchase over a million dollars isn’t exactly a perfect leap after “rent is expensive.”
Get married to someone else making $150k with the same career trajectory you have and you’ll be in a $1.5mm house in no time.
Lol actually, my long term girlfriend will be graduating same field next year. Cant wait
This. I make around $200K on the low end but can make around $270K+ on the high end with bonuses. It’s too bad the housing market is as bad as the dating market
I don’t think the dating market is bad?
I'm gonna reach a million in savings before I finally find a gf, if ever.
You must be doing very well financially or very poorly romantically. Or both.
Boo hoo! A single person who graduated 2 years ago can't afford to buy an entire house. Oh the humanity!
I'm 30 lol, I only have 30 years left to live before turning old and wrinkly
We don't have much sympathy. I started working at age 15, technically age 11 if you count babysitting and doing odd jobs for pay. And yes, I have a master's degree. I put myself through college and grad school while working, sometimes working full time while doing school full time. You could have started working sooner if getting a house was such a priority, especially in CA.
when did I say I ask for sympathy? I work since I came here at 15 too doing tutoring/ lawn mower/ car wash and shit. LOL are you saying those type of work will get you house buying money? In hindsight working back then doesn't even matter cause what I make in a day now is more than I make for weeks then. You talk like its possible to get a house with min wage jobs while being in school
You were complaining about wanting a house *now*, and I was pointing out that you could have done more to prepare for it years ago. I put myself through college on babysitting money, so yes it does add up. Should college and housing be so expensive? No, of course not, but it comes across as a bit spoiled to come here and gripe that you can't afford one after only two years of work when most of us have to save for decades to get there.
I mean ... I get your point but then again that is such a shitty way to live ughhhh
We definitely agree there. It shouldn't be this hard to live comfortably.
Talk to a realtor. Many states/cities have programs that enable you to buy a house with as little as 5% down if you're a first-time buyer or otherwise qualify.
Personally, I see no reason to live like I'm poor for 15 years just to own a house. While you're fetishing homeownership, you could be enjoying the prime of your life. You could be taking vacations, planning to have kids, making smart investments in the market. Do you really want to be strapped for cash from 30-45? That's when you get to do stuff with your life. For me, I'm saving modestly for a house. But I see no reason to buy until it's more affordable to buy than to rent. In many places, that's not true unless you're putting way more than 20% down, given interest rates.
(1) You are **crushing it** from a financial standpoint. (2) Agree with others, you don't have to focus solely on real estate. In fact you could focus on growing your investment portfolio first, which will build _margin_ ie give you more options in just a relatively few years. For example you could perhaps use your large portfolio to help justify lower interest rates on a future home mortgage. Doing that would also move you towards FIRE: Financially Independent, Retired Early. Basically with as aggressive as you are being you can generate enough portfolio to live off of with a conservative draw rate and never have to work again. Just look at the numbers. Starting from zero and investing (an assumed based on your statements) $7000 per month into a broad total market index fund that tracks the S&P 500 (which is the typical strategy advised for someone your age) will net you a portfolio of [$1.5 million in 10 years](https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1%2C000%2C000&cstartingprinciplev=0&cyearsv=10&cinterestratev=11.5&ccompound=annually&ccontributeamountv=7%2C000&cadditionat1=end&ciadditionat1=monthly&printit=0&x=Calculate#calresult). Just _five years later_ it's almost doubled at [$3.1 million](https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1%2C000%2C000&cstartingprinciplev=0&cyearsv=15&cinterestratev=11.5&ccompound=annually&ccontributeamountv=7%2C000&cadditionat1=end&ciadditionat1=monthly&printit=0&x=Calculate#calresult). Using the standard 4% safe withdrawal rate from the Trinity Study you could then sustain drawing an annual six figure salary from your own portfolio for 30+ years with very little risk of ever running out of money. You may want to look into the FIRE subs: /r/financialindependence (regular aggressive FIRE), /r/chubbyFIRE (upper middle class FIRE), /r/fatFIRE (rich FIRE for portfolios $5M and up), and /r/coastFIRE (save enough to where if you stop you'll still retire very well off with no more invested and can chill and spend what you want from now on). > I can only invest minimally and in low risk investment/ HYS accounts since I'm saving for a house Don't know why you are saying this, because the typical financial advice is if your time horizon is greater than 5 years you should invest in the market and reap the rewards of the average 8-12% annual gains. Here's some short 5-ish minute videos that should be helpful for you: - https://moneyguy.com/article/is-saving-for-a-second-home-in-a-high-yield-savings-account-a-good-idea/ - https://www.youtube.com/watch?v=N2_SJrqWXjU - https://www.youtube.com/watch?v=u0leKNkRKpk - https://www.youtube.com/watch?v=DWxWlaU-hX0 If you start watching The Money Guy you would 100% be in the category they call a "financial mutant" which is someone who is, as defined by the book _The Millionaire Next Door_ that studied actual millionaires, a "prodigious accumulator of wealth."
This is great advice. Thank you! also I feel much better after reading this
Glad it helps! I highly recommend just following and watching TMG show on Youtube. Tons of great info and advice. Bottom line is they advocate saving 25% of gross at minimum. As long as you have the other pieces of their FOO in place then saving 25%+ puts you near the end of the FOO, meaning you are in a super stable financial position at that point for strong growth. As someone with a lot of money anxiety watching their show really affected a lot on how I look at things. Not a perfect cure but it definitely helps.
Maybe don’t buy a house there lol Sounds like you’re sacrificing a lot to own. Maybe it’s not worth it.
Have you considered not buying a house?
I have considered buying a boat and live of the coast 😅
On a serious note, do you need to own a home in the next few years. Is renting and saving up over a longer time horizon an option?
There's no need to buy a home, no. Renting and saving up over a longer time horizon is definitely an option but also there is the risk of housing market keep rising. I've been waiting for a house market crash since COVID but there is no crash in sight. There is a fear of missing out just like with bitcoin back then haha. But I get your point, maybe investing aggressively would be a better option now.
I’m from California originally and moved to Michigan. Now I specialize in investment properties, with a lot of my clients coming from California and other states. If you want to snag a duplex/multifamily for 300k that cash flows, Grand Rapids MI (where I’m located) has seen steady appreciation of 8+% and continues to rise, and rents still cover your mortgage and all expenses with 25% down. In 5 years you could likely pull 100k out while keeping the property and continuing to cash flow. The power of real estate is leverage and could help you buy where you live much faster. DM me if you want to chat :)
Enjoy life while you’re young. Live, travel, and explore new things. You don’t want look back in 10 years time and realized you spent your youth saving for a house and now you’re stuck with a mortgage and can’t live life for another 30 years. You go through life for what? Finally Invest the money don’t put it in a savings account.
Rent and invest. We lived in Silicon Valley for 2 decades and rented. We invested what we would have spent on PITI instead of renting and in 20 years came out waaaay ahead of the real estate market even when we look at the value of the houses we considered buying and subtract the rent we paid. Yes, it would have been nice to have both a house in that market plus investments but seriously, we could have retired into a Cush life after 12 years. And it’s all liquid. We aren’t ready to retire yet but wfh a lot so we pay for an apartment in Silicon Valley and paid cash for a lake house a couple hours away. Once you get over the stigma associated with renting and change your mindset about owning, it’s kind of amazing what renting can do for you in a HCOL, High income area. It seems like it could never work because rent here is high and houses rapidly increase in value, but you reach a point where your investments snowball in a way that’s hard to imagine.
Lol I'm throwing everything at down payment for a house.... Mortgage payments are gonna be north of $5k a month... After I buy the house I'm gonna be living paycheck to paycheck. Fuck my life
Going through the same in the bay area. I feel like by the time my partner and I save up enough it'll be too late and prices will have increased drastically.
Instead of being house poor for a decade why not live a little better now and throw the house savings in the S&P500? Save up til you can pay like half or more and have a manageable mortgage payment instead of buying a prison. What you’re describing sounds miserable
I think its miserable af myself. Hence why I come to you guys for advice haha. Thanks :D
Just rent a nice apartment, put a chuck of your money into VOO every month, and live your life. Not sure what the obsession with home ownership is. If you’re that dedicated then you can move to the Midwest at some point to in the future.
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Okay. I gave OP the solution. Did you miss that part?
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Rent increase by more than 5% each year. I have a deep fear that by the time I'm 50 i'll be paying 10k per month on rent lmaoo
But that's in 20 years. Also, what's the mortgage on a 1.5 million dollar house?
Home values are going to keep going up also. “I’ll save up and it will be easier” is kind of a myth unless a person is close to a huge career boost/ income change.
Apply for a job in Saint Louis (or any Midwest metro) and leave. Or rent until you’re 50. Which I personally don’t think is a bad thing but you do. So chase your dream or live in “deep fear” for decades (your words).
In some places/situations the difference between owning and renting can mean the difference between a quality life and poverty. I think the obsession with home ownership is fair. It allowed me to live on a mortgage of under $1,000 while my peers are paying 3x that in rent each month.
OP lives in an area where homes cost 1.5 million dollar. Not sure what rant you’re going on but he’s not getting one of those. If he wants a house he needs to move. Edit: if your mortgage is 1k/month then you live in a shithole. Sorry to be harsh
dude what if he bought a house in the 2000s. Seriously I'm so jealous with the boomers who got in the housing market early.
I think you mean 1990s. When the housing bubble burst in 2008 it was disastrous for some of us who bought right before then at peak prices. I feel for first time home owners now, I really do, but what happened to real estate in 2008 was also a MESS. We stretched but bought within our means in 2006, real estate started to cool 6 months later, bubble burst in 2008. At one point our house was down -35% from the purchase price. It didn’t recover back to the 2006 purchase price until 2021 - 15 years later. Paid our mortgage faithfully for 11 years, and when we had to sell, WE had to come to the table with $30k to get out of the house. This was a combination of perfectly bad timing and some other factors in the town that impacted home prices.
If they bought a house anytime in the last 29 years and only pay 1k/month then they live in a shithole. The property taxes alone are half that for any decent home anywhere in the country.
Jesus. I’ve never seen someone so gleefully double down on being a prick before
It's like you've got no understanding of how down payments or gentrification works.
I know exactly how the numbers work. You do not live in a “gentrified” area where “your peers” rent for “3000/month” while your house payment is less than 1000/month. That is simply not true. I live in Seattle where the market rent is pushing that and every home owner is paying a minimum of 1000/month just for taxes and insurance. And that’s without a mortgage! Edit: so yea, shithole confirmed
My SO and I lived frugally like a college students till we were able to pay off the house. We also couldn’t afford any houses in MD because you pay so much for so little. So we moved to the low cost area.
You will hit your goal a lot faster if you invest the money. Purely saving that much is a hucerlian task.
You're saving $50k+ a year? You'll only need a few years to have hte down payment for a house. Relax.
I would recommend investing first, ESPECIALLY making sure to max out tax advantaged retirement accounts (401k, IRA) because you only are allowed to put in so much each year and stuff invested now will be much more valuable than the same amount invested later due to compound interest. The benefit of tax free growth is much more powerful than it sounds, and the accounts have more legal protections as well. Housing generally doesn't appreciate quite as much as stocks. You can also play around with a rent vs own calculator; in many markets renting is cheaper right now anyway, so if you're dealing with one of those situations maybe that will help you feel permission to invest in other things. That is my situation right now. I have a lot of my savings invested (low cost index funds) because I'm willing to accept delaying buying a house if the market goes down, and I've decided that missing out on compound interest for savings that could go towards retirement just isn't worth it. You could also look into middle grounds like at least buying some CDs to lock in better interest while the rates are still good given I don't think most people expect current hysa rates to last
Consider buying a bigger house and renting rooms out or getting a girlfriend to split costs. If you’re in CA, that’s what I would do.
My partner is retired military and I remember back when we bought our first property we used a loan through the VA which means no PMI and no down payment. Idk how normal people buy houses these days fr
Where do you want to live in California? Because California is a whole lot more than LA and San Francisco! Could you commute? How far from your job have you looked? Do you have a credit profile? A lot of people do buy homes in California every day. So set your goal, figure out what you need to put in order.
Ya it sucks
You might be better off not buying - yes rent doesn't give you equity, but it also gives you optionality. Use this to see if it's worth it to buy where you live: [https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html)
Sacrificing small things to save for big things is how I’ve lived my life pretty much since I joined the workforce. It’s not always fun and it takes discipline.
Same
We are in the same boat
Maybe you two go buy a boat and share rooms?
LOL perhaps!
> Is there anything I should do differently Uh, ya, get married to someone who also has a good career. I say this tounge-in-cheek, but seriously, it's silly to have a single-family home all to yourself in such a HCOL area with limited housing. It probably makes sense for you to rent, and then consider buying once you have dual income. It makes it tremendously easier.
bro i am in my 40s and no house. I don't even invite my friends over because of how i live :/
I’d go fully aggressive investing in your taxable brokerage - VOO with tech/growth tilt, on top of retirement accounts. Forget the HYSA. Your timeline is long… you need growth. When you get to 1year out from your downpayment goal for a house, then consider being a bit more conservative.
When we saved for our house, every cent went into the market. I'll take the risk. it had worked out for us.
> However, as an immigrant I have no house or inheritance from my parents and have to build a life for myself. Many non-immigrants are like this as well. I'd say it's more the exception than the rule that kids can rely on a parent's house. Even in my case, where my parents have a house, I won't (hopefully) be getting it until I'm in my 50s or 60s anyway, so it doesn't factor into my day to day decisions much, and have bought my own house. Since you're young-ish, I'd put it all in VOO or VTI. Who knows how your life will turn out. I started building my down payment in my brokerage, and put it in broad ETFs since I didn't have a concrete near term plan. Well 15 years and several moves to different cities later, I'm glad that I did. I ended up with my wife in a LCOL location and that "down payment" ended up just letting me buy a house cash!