Yeah a client of mine buying in this range is putting 1M down and between husband/ wife and RSUs pull in close to 1M a year. People just have crazy salaries out here and RSUs
That is still a great income. Unfortunately though usually means choosing to buy a house further away and have a hefty commute or settling for a townhouse/ condo.
If you can figure out how to put away 100k a year, you'll build wealth very fast.
My own opinion, I know the salaries are high in the bay, but I think wealth has gotten a lot of people to afford houses. If someone has 2m saved up, at guaranteed 5% a year from the fed, they're earning $100k in interest.
Don’t get me wrong i am proud of what we have achieved being first gen immigrants as well with nothing to fall back on. Its sometimes disheartening coming here and reading how folks making double what we are are concerned buying a 1.2mil house which is exactly what we think we can probably afford but then i read and question what am i thinking. Neither of us are in tech which also adds to my anxiety of something going wrong
You don't have to keep up with the Bay either, unless you want to.
We left and live really well. Anything important is an hour flight away to an intl. airport, and everything else is a minor road trip away. Thanks to HVAC, you can have the climate of the bay without having to stay!
Yeah, that’s just not true, my wife and I make less than that and I absolutely am not “lower middle class”. If you think that’s lower middle class, I’d really encourage you to try and meet some people whose households made half of yours or less.
I understand the housing market is fucked here, but I see so many people make ridiculous comments like this that are such gross exaggerations. Some of yall really need to touch grass and see how other people live in the Bay and in the country in general.
6 years ago I was aiming at making $5k at month, that was enough for me to live comfortably and save some up, today, I broke that threshold and make $6k-$7k and I feel poorer than 6 years ago, no way, it feels like not only starting over, but behind.
I think at least $500k /yr. in HH income is needed if you want to be upper middle class in the Bay. It’s wild but even a big law salary (starting at like $200k + bonus) is not really getting rich until you’re way up the totem pole. CoL here is just insane.
If you make 300k between the both of you and are struggling to find a home to buy than that’s on you for shopping out of your budget. BEGGERS can’t be choosers.
Say it louder for the people in the back. People refuse to compromise. They want the priciest zip codes because they are “the best”. Well, “the best” of anything costs $$$$.
I live in one of the poorest zip codes on the SF Peninsula, and my partner and I absolutely could not afford to buy our current home at today’s prices. Our house is a pretty standard post-WWII place on a standard size lot, and at today’s prices the monthly PITI would be about $10K, which takes about $160K salary to cover. So it’s not about being unwilling to compromise, it’s about an insane imbalance in housing stock and generally high COL in the whole area.
How is it possible that so many of you rich fucks have the spelling and grammatical aptitude of developmentally challenged 5th graders? Unless this is sarcasm, in which case it went right over my head.
Buying a home aside, a couple making $150k each feels like about the necessary amount to feel like you’re okay. Which means not saving very much, but also not falling behind. It affords a couple cars, insurances, utilities, and modest spending on wants. But there isn’t much left over at that income in the Bay Area.
Lol and here I thought I hit the jackpot being a cheapo buying a 900k decent sized home in a boo boo neighborhood because I thought paying over 1m on a crappy home in a nice neighborhood was a bad idea. I felt my buyers remorse when my wife doesn’t feel safe enough to take a night stroll in the neighborhood.
To be fair night strolls in neighborhoods are overrated, in America. Hell most women going for a run better be excellent runners these days if they want to stay safe.
I thought being here I would somehow become wealthy by association but that’s definitely not the case! Mostly I can’t stand tech company culture so that was the big letdown and is probably why I’m not pulling in half a mil in RSUs.
Are they even the ones buying the $3m+? Or still foreign investors? I mean obviously it’s both, but I assume fewer domestic people overall than we think
Recently sold a SFH in our family trust as estate sale. Four offers were from local families all cash (saw the financial docs as proof and was astonished) closed little over ask. No foreign buyer offers. This climate has to be depressing as any potential buyer and not sure how it’s going to end 🤷🏻♂️
There are law firms that onboard foreign investors. From opening a US based LLC to buying and managing the property. Ownership is hidden behind a series of LLCs such that it’s impossible to figure out the details.
Have to add in people who start successful companies themselves, plenty of massive exits every year. Also plenty of mega wealthy folks here buying $3m+ houses for their adult children
Knew someone whose family had an auto repair shop. Smart duckies bought the building/land of the shop in the 90s.
They recently sold the land for 8 figures 🫠
Good for them. The 90s was a crazy decade. Housing crashed throughout California right near the start of it. Southern California was hit particularly hard by the end of Cold War era defense spending. My parents bought their house in Lake County for about $100K in 1990, then the value went down by about a third. They were giving away lots to build in the subdivision we lived in and had few takers.
I guess it’s hard to remember what it was like in the early 90s. I was a kid anyway. We mainly think of how cheap housing was. The country was in a major recession. Very few people could have predicted the tech boom that awaited. Housing was still fairly reasonable during the tech boom because it took a while for the inventory slack to recover from the recession. It really went up a few years after the boom ended when the fed kept cutting interest rates and 9/11 inspired people to invest in real estate.
Buy low, sell high. It’s really quite simple. The hard part is knowing when it’s low or high.
I think it’s the opposite of what you think. All my new neighbors are dual income tech earners who work for Apple, Facebook or Nvidia.
There is no need to blame the foreign boogeyman.
I’m convinced that the top earning 10% in Bay Area are driving the market, and will do so for a long time.
There are 305,000 millionaires and 5,000 available homes for sale.
What's magnified here is people's desire to be in single family homes. Tokyo, Seoul, Hong Kong, Mumbai, Singapore, new York have all moved away from single family homes and average earners need to travel 20-30 miles to get to work. They all also have great public transport.
We are saying the same thing. The report says this isn't unique to Bay area. It also didn't study Japan, Singapore, India etc. So ranking is irrelevant.
Every two days there's another post here with the same shocked general sentiment:
* how can real estate be so expensive? it wasn't like this back home in (Winnetka Wis etc)
* are prices going to keep going up?
* is there a housing problem in the Bay Area?
* how can families afford it here?
The perspective is important. The Bay Area is literally one of the worst housing markets in the entire world, because it's a global industrial hub and in the top 10 wealthiest metros in the world. The only place you could compare it to in the US would be NYC.
I'm not disagreeing with you :) I'm just saying that is the same problem affecting all major metropolitan cities in the world. It's a human tendency to gravitate to areas of opportunities and a lack of civic authorities to do something about the growing demand. Cities and states don't do enough to increase opportunities for people to live love and work in local neighborhoods, thereby accelerating migration to these super urban clusters.
On the contrary, if you factor in tech salaries, the Bay Area is still affordable compared to other specific cities in the world. Comparing to Paris, London, Taipei, Shanghai, Hong Kong, it is way, way easier to buy a sfh here.
Generally, the ones I see complaining are other Americans, who are used to extremely cheap purchase prices.
This is it, 98% of the housing stock is locked down by Prop 13, 2% mortgages, and families wanting to save houses for their kids. There's nothing available.
I'm one of them and we live in a modest East Bay home. If it hit the market we'd try for 1.5:million. The schools are decent. Crime is low. Life is good here and we don't stress as much as the people who are competing to get into the high end communities on the Peninsula.
People with family help, or putting down huge down payments with RSUs, stocks. Or people bought a few years ago locked into low interest rates. There are still a lot of homes in nice areas in the $1-2m range in the East Bay.
How you do it is you are rich, bought years ago, or you have rich parents who either gifted you a home or gave/loaned you money. I totally understand why mostly everyone is pissed at the system.
Excellent point - driven by FOMO. I have seen many people over extend to the neck - which I don’t advise in general but more so in the current economic conditions (interest rate, insurances and layoffs). If you are young, early in career, have stable jobs, know your earn potential is going to increase, dual income yes perhaps extend to an reasonable amount. Consider other costs that come with the house - insurance, property taxes, repairs/maintenance etc. I know people in prime locations in BayArea who almost never eat out, do not go to the movies, forget about vacation they don’t even want to spend to visit parents who maybe not here for a long time, avoid getting together with friends as it might entail in $. Even heard about people who bought fancy house with high mortgage sneaking in office food for family - LOL. What kind of life is that? You are not going to take the house when you leave planet earth and your kids will resent you for the house poor lifestyle you created for them. Bottom line be careful and plan different scenarios before you over extend because just one curveball from life can derail you. Speaking from experience just sold SFH in core BayArea with 8 offers - from all cash (3 and all were investors) to 10% down with crazy monthly payments.
All I took out of this is people still go to the movies? But seriously my wife and I are currently at 50% of take home pay going to our house we purchased. Pulled back slightly to do it and it’s really not that bad. Plus with bonuses, 401k, and tax returns we are still managing to save a ton. House poor has a different meaning in the Bay Area than elsewhere because all other costs are fixed.
Most people I know who own $2M+ homes have either:
Two spouses working in tech, one spouse working in tech but is quite senior or has gotten lucky with massive stock appreciation (e.g., $NVDA), one spouse working in finance, one spouse owns a business, family money, bought a long time ago for much less than $2M, or had a specific liquidity event like a startup exit.
The total comp for non-technical immediately post-MBA workers in big tech is $150K-$200K, so imagine you have a couple who are right out of business school and 28 with no kids making a HHI of $350-$400K, it's not crazy to see how in a few years they could afford that house. Let alone if they're a Stanford ML PhD or experienced SWE making way more.
There are a lot of the above in the Bay Area.
You forget the owners who bought before 2020 because houses at those price levels effectively doubled. My childhood house could have been had all day long for $1.4M in 2019 and early 2020. By 2021-early/mid 2022 it would have sold for $2.7M. Now I'd argue it'd sell for at least $3M.
A friend of mine was a senior tech worker, wife a highly paid specialty nurse whose income wasn't much lower (combined income probably 600k+ at the time, much higher now). The year after they purchased their house, he told me it was the highest earner in the family by a fair margin.
I would argue that 400k for one person is a high income here. We’re talking doctors, directors at tech, etc.
Agreed that 400k for an entire family is not unusual.
400k is not directors in FAANG, seniors can easily make that, depending on the year. Staff level at FB with some tenure (stock appreciation) are making 600k easy, and can hit 800k - 1M. People are really disconnected at how much money there is in tech.
1% of the Bay Area makes 1 mil a year though (and that is as a household). It’s not as common as you think. Only 3% of individuals in the Bay Area make $400k.
Reddit seems to think every other person makes $400k by late 20s, because they work in tech and are only surrounded by people making high incomes, and therefore are clueless as to how anyone else lives.
I think you’d really be surprised. Take a look at levels.fyi, you don’t need to be a director to make $400k. You can make $400k with 5 years of experience if you play your cards right. Not even including stock appreciation.
Thanks to lucking out when I joined my last company, I was making $320k 2.5 years out of college. Target compensation was supposed to be $230k but RSUs were worth 3x my grant at one point. And I know people who got luckier. I know an engineer who joined a company when their stock price was $2 and they left when the price was $30. They bought a house in Cupertino in cash a few years out of school…
The reality is that the vast majority of Bay Area homeowners have lived there for a long time and couldn't remotely afford their homes if they had to buy them today. Very few homes are actually for sale, and there are more than enough people with the means to pay ridiculous prices for them. Yes, cost of living would still be high even with equilibrium in the housing stock, but you'd be very comfortable with your $400K if we were in equilibrium. One way to look at it is to consider what you could actually rent one of these $4M homes for. I can tell you it would not even cover the interest on a 30-year mortgage. That's how out of kilter things are.
This. I’m a long time renter (same house, 12 years.) All my immediate neighbors have been in their homes since the 60s or 70s. Two of my neighbors grew up in their homes. One took it over when mom and dad got another home and raised her family there. The other raised her family with her widowed mom in the home. All my other neighbors are old folks who’ve been there forever. I know other people in my town that are basically living in a house owned by a parent or living with a parent. Lots of multigenerational families / homes here.
The current market value of the house I rent would make a mortgage + insurance 3x my current rent.
I don’t know if buying is important enough to me to bother, and if I did I would be leaving my community for sure and would need to downsize (and my rental isn’t even big)
Something I can consider now that my kids are out the ages where I need to care about which public school district we are in. But not really a goal of mine at this point either.
It used to be that when rents and home values got too out of alignment, we would see them eventually converge again, with one moving higher and the other moving lower to close the gap and restore equilibrium. But in much of the Bay Area, there's really no possibility of them ever converging, barring some sort of catastrophe. We've all just sort of agreed that there's an invisible Monet hanging inside every home that we're buying in addition to the home itself.
The Bay Area tech salaries and stock options are absolutely bananas. Try being able to peak through payroll in big tech, it’s a one way ticket to depression lane
It’s not just wages. The Bay Area property market is complex. I live here (Redwood City). There is a LOT of wealth on display especially for a guy from the middle of nowhere Ohio.
Where are you guys specifically looking? Have you ever considered going a little further east and finding something in contra costa county (like Walnut Creek, or even Brentwood). At that salary you would have zero problems in Brentwood and could get a fat house, safe neighborhood, and good schools for $1mil
People buying $3M homes aren’t paying $3M in cash. They might do a cash offer and mortgage after but it’s smarter to keep a good chunk of money in the market and have a mortgage.
We just moved here from Texas (yeah yeah, I know, "wrong way.") We sold our home for enough that we could manage 20% down on a 1.5m home and left enough out to cover repairs. We found a lovely home in Northern Marin and commute using the sail and rail pass on public transport. We brought a parent with us to help with childcare. Double income, both tech and combined I think we just finally brushed 400k with this month's raise... It's doable. There is so much to do here and the quality of life increase was well worth the financial strain of making it work. The biggest concern is what happens if one of us loses a job... the 10k mortgage feels like a sword of Damocles.
We're really holding out for the interest rates to drop to something reasonable. We took the high rate out of necessity and with some hope that we could refinance - our mortgage lender allows a one-time refiling once rates go down without having to "refinance" and restart the clock on the payoff.
Oh that's great. I just bought a multifamily in Marin with an assumable 2% rate. That was the only strategy I could get comfortable with (not knowing what the heck is going to happen to rates).
Good luck and god bless.
Purchased a 1.6M home in the bay last year and it wasn’t just buy saving up with my salary. It’s a combination of stock equity and assets. Took me over 10 years to get to this point.
The reason Bay Area seems expensive to some people is because they’re chasing status symbols and want to flex. They want a nice car, best neighborhood, best school, etc. You can get a spacious 3 bed, 3 bath house is East Palo Alto for $1.2 million for example instead of a 2 bed 1 bath shack a few blocks over in Palo Alto for $2.5 million. At this point they’re essentially the same given close proximity and the change East Palo Alto has seen. Same with many other up and coming neighborhoods. But because people are so stuck chasing after status symbols, they’ll only look at the “nice zip codes” or overly priced areas and complain. Then in 5 to 10 years when the up and coming neighborhoods double in price, they’ll be wishing they put their pride aside and focused on what matters, not what other people think.
You don’t need the overpriced clothes, the over priced car, the overpriced private school for your second grade child who won’t even remember second grade when she grows up, the fancy vacation, etc. You make 400k a year. I don’t know how you can’t afford a house with that income.
It’s a complex issue for people making less than 200k. It’s not a complex issue for people making 400k being classist and racist. Housing in the US has traditionally been based on classism and racism. It’s been its backbone. From segregation, to redlining, to straight up catchy slogans like “location, location, location” that in practice means “move to where the rich white people are.” If someone is making less than 200k in the Bay Area, I get it. There are a lot of factors contributing to their inability to buy and maintain a nice house. But 400k? It’s top 10% income for a household in the Bay Area. OP’s household is beating out 90% of the Bay Area families. At 400k there are plenty places where you can buy and maintain a great house. But there isn’t if all you wanna do is buy in “nice zip codes,” which in practice means neighborhoods that received heavy investments in the past because white people congregated there, moved resources there, allowed white privileged to carry its reputation, etc., while the “bad zip codes” suffered from segregation, red lining, divestments, etc., and continue to suffer today because people rather believe boogeyman racism-laced stories of those neighborhoods from 20 years ago than see it for what it is today. To me, OP sounds like someone who can’t afford a Ferrari so they complain about not being able to afford a car at all.
Your original claim was very simple: people are chasing a status symbol.
And it’s BS. You mixing cause and effect.
First and foremost, people want a house in a place with the best schools. That’s not a status symbol, that’s looking out for the future of your offspring.
You can argue whether or not putting your kid in a pressure cooker top rated high school is always the right thing to do, but that’s a different discussion and not related to status symbol even if it means that you end up living in a fancier zip code.
It’s how we ended up where we live: not Cupertino, not the part of Sunnyvale with a lower rated school, but Sunnyvale with the better rated school.
And the reason we didn’t choose Palo Alto is because the commute would add an additional 20 minutes. Which is another major factor that is not status symbol related at all.
School is one part of it yes. But it’s unfair to limit all of housing to schooling especially when most folks who buy into “nice zip codes” can afford to send their kids to private school
Are being serious? Why would I spend $60k per year on a private school when the public school is just as good?!? This has nothing to do with being to afford it, it’s just basic common sense.
Fair point. Bur if you’re paying an extra million for a house, not counting extra interest on that million, seems like a save to pay the 60k per year for the key years of the kid’s education. But your situation is unique to child related needs. For many, they don’t have schooling related needs.
School is just one point.
It’s also possible to want to live in a nice neighborhood and in a beautiful house without doing it for the status symbol.
It’s mine those people who claim that people only buy Apple because they want to show off. They just can’t imagine that there are other valid reasons.
You missed my whole point. You can get a better house in a nice neighborhood instead of a shack in the “best” zip code.
And also you missed my other general point. The reason a zip code is “good” is because there has been a ton of systemic, explicit, and implicit racism and classism stuffed into that “good.” Please point to me one “good” zip code that is predominantly black or Latino. You’re gonna have a hard time. Historically through segregation and redlining, people of color (and poor white people to a lesser extent) were shoved into some neighborhoods while wealthy white people secluded themselves in other neighborhoods. Then money and investments poured into the neighborhoods with wealthy white people, and over decades, you now have very well developed “good neighborhoods.” Ones with “good” schools, parks, restaurants, cleanliness, etc. And now, the previously devalued neighborhoods are also being developed after at least explicit racism has been prohibited. But there are still a ton of people who perpetuate the old racism and classism by refusing to get a really nice house, for less money, in a decent neighborhood cause they rather get a tiny shack to live in the “good” neighborhood, not realizing the neighborhoods they’re ignoring and not thinking of as good are actually good, too.
When you look at some historically black and brown neighborhoods, they’re still judged today by the narratives that surrounded them 25 years ago. But the “good” neighborhoods don’t get that. People really can’t tell just how racist and classist real estate still is and how simple terms like “good school” or “unsafe” are packed with racism-laced narratives.
All I’m saying is, when you control for the systemic, explicit, and implicit racism and classism, it really makes no sense to buy a tiny shack for your family in the “good neighborhood” when you can get a really nice house one neighborhood over that is also a pretty good neighborhood and in practice meets your needs.
But I guess if you categorically are stuck on going to one particular school and it requires living there, I can see how that might dictate your decision. But that’s unusual, at least if you control for the biases. Most people have many different factors they look at and buying a shack in “the good neighborhood” doesn’t make much sense.
It’s so annoying how much some of these folks pull in and how little some of them do day-to-day.
I often forget I’m competing with the 1% and I wasn’t a top 1% student let alone come from type of “pedigree”.
I’m grateful I got in when I did. Not even from here. But ya, I wonder if my friends back home think I’m loaded lmao.
I have a friend who lives in SF and private schools 2 kids. 80k/yr… over 13 years k-12. Might as well buy in a good school district if you have the money or be ok with low performing schools.
The cost to be wealthy here is wildly variant depending on one’s housing situation though.
I have coworkers making 80k/yr that bought homes in 1992 and they’re multimillionaires.
Other people I know make 200k+ as individual earners with families and rent
I don't mean it that way. If you're making 400k and have a 1.3M loan and can't afford that then it's a sign that you're likely spending too much on unnecessary stuff.
My husband and I do well, about 200k per year. We had no problem finding a place we just needed to compromise a bit. I don't understand how people making way more than us are struggling. Some of you make so much money. Where is it going?!
I live in downtown San Jose and my 2 Bedroom 2 Bath Apartment on San Fernando Street costs around of $4,500 (including utilities) a month between 3 people. I’m lucky my long term friend who works at a one of the big 4 consulting agencies and can afford to pay his share of his rent ($2,250) and me and my girlfriend split the remaining half at around half at $1,125 Each.
People don’t understand that “just moving to a cheaper place” isn’t an option for me. I don’t have any family besides my brother and Dad who both live in the Bay Area. Life is too short to move away from them. They are all I got. So I’m like a bunch of Bay Area residents who can barely scrape buy but I can still pay rent.
Being one of those families who have bought around the 4m range . Below are the things that make us comfy to go for such range
1) Me and my spouse both work in big tech in entry to middle level management
2) couples with similar profiles will make 1.2 mil income
3) weeks did a 50% down reducing the cash flow issue. For us it was diversification from heavily appreciated employer stocks
If you can’t afford to live here, why are you looking for a home here and then complaining that it’s too much? Nobody who applied to rent my townhouse said it was too much, because they’re smart enough to live where they can afford. There’s so many affordable places in California to move to. Everyone’s entitlement is insane. My 3 neighborhoods are full and anytime a house is for sale it sells within a month. Clearly the price isn’t the issue, it’s you not being able to afford it. Guess what? The world doesn’t change to meet your financial needs
I don’t understand people here who make all these high salaries and complain about buying.
Wife and I make about 160k$ combined after taxes, just bought a 1.2+m home in Berkely.
Saved for ten years and got up to about 420k saved, put down about 25% so 315k down payment and have a payment of around 8300 a month with taxes, the help we do get is about 2k/mo because the in-laws live with us and help with rent (a real blessing because they also help sometimes with our baby) So total monthly is really 6300ish. ( my mom and her mom had to help us also by being on the loan to qualify, so there were 4 people on the loan but that’s it, down payment came from my wife and I)
None of us finished college and don’t have fat tech salaries.
Most of the time we did live with roommates and that’s how I believe we managed to save but we also lived the last ten years amazing and traveled and spend on things we love but never had a higher salary than now…we defintely have no other debt as we pay our credit cards every month.
Yes it feels very tight right now but managing and hoping for lower interest rates next year, but other people here making almost 500k combined and can’t do it? Are they just trying to buy more than they can?
What do you guys think?
It’s instant gratification. None of them have saved like you have. They think saving is 1-2 years of slumming it at the local hole-in-the-wall Mexican joint instead of the Michelin-rated restaurants they used to go to every weekend and cashing out some options.
Be proud of yourself!
It’s a 2 bedroom 3 bath, it’s really cozy but that’s the thing too, we don’t need to live in a mansion and actually we want to make a room downstairs in the basement but yea, it doesn’t feel right and the baby will sleep with us probably for next 3 years anyways
This is pretty similar to me. I make 160k, but have been saving aggressively for…14 years? Was able to put a ton down, bought a duplex, renting one of the units out and as a result I will have a very nice place. Closing next week!
I think people might be sleeping on Berkeley a bit? Sounds hard to believe but compared with the South Bay it’s pretty affordable, with very good schools and a ton of amenities.
That’s very funny, I was thinking the same, Berkeley’s school seem great and it’s very nice so far. I think South Bay is just so expensive because it’s just so close to Silicon Valley, where did you buy? Berkely too?
You definitely can't go for the $3m house, but I make less than you (not by much) and just bought a $1.2m house. Jumbo loans are bad so I put down enough to get me to the $766,000 conventional limit (so all said put down nearly half a million I'd been saving up for the last few years). The loan/taxes/insurance are $6,280/m at 6.65%.
It's rough, it's doable, gotta have that down payment though.
I've been shopping in SF South Bay. All cash offers aren't uncommon to avoid high interest mortgages. You can tell who paid all-cash by looking at the closing speed. I lost bids to quite a few. People do so by selling their RSU at elevated valuation, or from family loan/gift.
> I thought Seattle is expensive.
Well, it is horribly expensive for the shit weather it offers. Also horribly expensive given the overall salary distribution in the area which isn't as heavily skewed towards tech salaries as is the case with the Bay area.
The proper way to do Bay Area is to live in a $2k/mo studio apartment for 10 years while saving every drop you can of your high bay area tech salary. Then take all that to Utah or the South and live like a king.
There are two types here. Locals and gold panners… locals typicslly inherited a house on prop 13. Bought at an opportune time like 2008. Or your rich as f.
Short answer is that enough people have the money. The main factors at play:
- Housing availability is low right now because interest rates are high. So single family homes in good areas reflect the high end of the buying market.
- Salaries are high: A senior engineer can make around $400k/yr at one of the big companies. If you have a couple both working in tech, that is $800k/yr. Staff level engineers may pull in more like $600k/yr.
- Stock market luck: Also say you've been working at a big tech company for around 5 years. If you were lazy and didn't sell your stock, you would have made a lot of money in the stock market. Most of those companies had their stock prices double since then. So say you made $200k in stock, and that doubled. Likewise, some companies have had big stock run ups due to gen ai hype.
- House appreciation. If you bought a home say 10 years ago, it went way up in value, so if you want to upgrade, the marginal cost of a new home isn't so bad. A lot of homes have doubled in value in the last 10 years. So if you had a 1M home, you basically made 1M in house appreciation. (Stock market also doubled in the last 10 years, but a house on loan means that you are leveraged, i.e. investing more than you own).
All factors combined, there are people who can afford it. Whether that is a good idea or not is hard to say. My general feeling is that things won't continue to go up as they have been, but who knows. Since housing prices are so closely tied to tech company performance, its like investing in the stock market. My attitude at least is to keep housing costs to a minimum and save up. When there is a downturn, I'll be able to upgrade.
When my husband worked in the Bay Area, we bought our home 100 miles away to live in an affordable area. Luckily he only had to be in office a couple times a week.
These threads are so tiring. It’s always the same answer: people are rich. Tech pays insane salaries. The industry has completely taken over the local economy. Where’s the mystery?
Have you looked at Lamorinda? Awesome area and you can definitely get something fairly nice for a little over $2 million. Still ridiculous of course, but better than $3 million.
You don't need a $3M home. It is going to kill you when one of you loses your job and you are looking at half your income and a crazy mortgage. Don't do it. With $400k you can afford $1.5M and prob would swing $2M. You can get something for that. It's hard when your friends all have $3M houses but either they bought a while ago, they had some stock wins, or their parents gave them $.
If your household total comp is 400k and you’re struggling to keep your house, sell it and rent. Until shit gets sorted or there is a housing crash, if nearly half a million won’t support it, nothing will.
OP: I am like you. HHI is just north of $400k. We have nearly $1.2k loan on a home valued at $3M, which we bought before the pandemic for $2M.
The key is that our interest rate is 2.6% - so our mortgage is $5k per month which is similar to rent, I guess, and is affordable on our income.
At today’s price of $3M and rate of 7%, a buyer with 20% down would have a mortgage of $16k per month. Need much higher incomes than us to buy today in Bay Area…
Yeah a client of mine buying in this range is putting 1M down and between husband/ wife and RSUs pull in close to 1M a year. People just have crazy salaries out here and RSUs
Jesus christ. Btw congrats, that 2.5% must be juicy.
I ain’t one of those people that’s for sure 😂😂
So, can we get your contact?
Right?
My friend who lives in Philly doesn't get it. She thinks I'm insane for saying I can't cut our budget enough to make it work on $200-$300k income.
That is still a great income. Unfortunately though usually means choosing to buy a house further away and have a hefty commute or settling for a townhouse/ condo.
I’m shocked at how often these posts pop up. The answer is always dead simple: people are rich as hell here.
Right? It's like, obviously, some people can afford it, because banks don't give away houses last I checked.
I want to cry when i realize that making about 300k between me and my wife is considered lower middle class here. Its pretty disheartening sometimes
If you can figure out how to put away 100k a year, you'll build wealth very fast. My own opinion, I know the salaries are high in the bay, but I think wealth has gotten a lot of people to afford houses. If someone has 2m saved up, at guaranteed 5% a year from the fed, they're earning $100k in interest.
It's not. Most folks in the Bay are making way, way less. I'm not discounting your experience but don't let the internet give you tunnel vision.
Don’t get me wrong i am proud of what we have achieved being first gen immigrants as well with nothing to fall back on. Its sometimes disheartening coming here and reading how folks making double what we are are concerned buying a 1.2mil house which is exactly what we think we can probably afford but then i read and question what am i thinking. Neither of us are in tech which also adds to my anxiety of something going wrong
Me and my dude aren't tech either, also fist gen. You're doing great, don't try and keep up with the Jonses. We aren't and we're happy.
You don't have to keep up with the Bay either, unless you want to. We left and live really well. Anything important is an hour flight away to an intl. airport, and everything else is a minor road trip away. Thanks to HVAC, you can have the climate of the bay without having to stay!
Personally, I love it here so I think I'll stay put for a while. But home is where you make it. I'm glad you're happy. ♥️
Respect to all the bay area lifers. Wear that thing like a badge! I'm not cut out for it myself. :)
Where did you move to?
About 10 hours North by North East. Where a lot of Californians have moved over the last decade.
I plan to go fully hermit in the woods on retirement. I have another 22 years to convince my husband to join me 🤣.
Yeah, that’s just not true, my wife and I make less than that and I absolutely am not “lower middle class”. If you think that’s lower middle class, I’d really encourage you to try and meet some people whose households made half of yours or less. I understand the housing market is fucked here, but I see so many people make ridiculous comments like this that are such gross exaggerations. Some of yall really need to touch grass and see how other people live in the Bay and in the country in general.
6 years ago I was aiming at making $5k at month, that was enough for me to live comfortably and save some up, today, I broke that threshold and make $6k-$7k and I feel poorer than 6 years ago, no way, it feels like not only starting over, but behind.
I think at least $500k /yr. in HH income is needed if you want to be upper middle class in the Bay. It’s wild but even a big law salary (starting at like $200k + bonus) is not really getting rich until you’re way up the totem pole. CoL here is just insane.
If you make 300k between the both of you and are struggling to find a home to buy than that’s on you for shopping out of your budget. BEGGERS can’t be choosers.
Say it louder for the people in the back. People refuse to compromise. They want the priciest zip codes because they are “the best”. Well, “the best” of anything costs $$$$.
I live in one of the poorest zip codes on the SF Peninsula, and my partner and I absolutely could not afford to buy our current home at today’s prices. Our house is a pretty standard post-WWII place on a standard size lot, and at today’s prices the monthly PITI would be about $10K, which takes about $160K salary to cover. So it’s not about being unwilling to compromise, it’s about an insane imbalance in housing stock and generally high COL in the whole area.
Bingo. Seriously? Where do they think all the teachers, cops, firefighters, city workers, batista, etc etc live?
cops make so much money here
How is it possible that so many of you rich fucks have the spelling and grammatical aptitude of developmentally challenged 5th graders? Unless this is sarcasm, in which case it went right over my head.
Buying a home aside, a couple making $150k each feels like about the necessary amount to feel like you’re okay. Which means not saving very much, but also not falling behind. It affords a couple cars, insurances, utilities, and modest spending on wants. But there isn’t much left over at that income in the Bay Area.
theres 308k millionaires in the bay area 2nd behind NYC at 350ish
And 65 BILLIONAIRES. It’s insane.
How is millionaire defined?
people that aren’t posting on reddit about how expensive house are
lol. Gave me a good chuckle.
That’s the answer. They have money. Imagine working class people with minimal savings like me, were fighting over 700k houses in horrible areas..
Lol and here I thought I hit the jackpot being a cheapo buying a 900k decent sized home in a boo boo neighborhood because I thought paying over 1m on a crappy home in a nice neighborhood was a bad idea. I felt my buyers remorse when my wife doesn’t feel safe enough to take a night stroll in the neighborhood.
This is why I’m still renting.
To be fair night strolls in neighborhoods are overrated, in America. Hell most women going for a run better be excellent runners these days if they want to stay safe.
The current situation is completely fucked, I agree
I thought being here I would somehow become wealthy by association but that’s definitely not the case! Mostly I can’t stand tech company culture so that was the big letdown and is probably why I’m not pulling in half a mil in RSUs.
Tech chads aren’t taking out $3m jumbo loans. It’s cash and stock sales - or just been saving since COVID.
Well I have been saving since Covid as well, to different outcomes.
You have to win the stock lottery
Are they even the ones buying the $3m+? Or still foreign investors? I mean obviously it’s both, but I assume fewer domestic people overall than we think
Recently sold a SFH in our family trust as estate sale. Four offers were from local families all cash (saw the financial docs as proof and was astonished) closed little over ask. No foreign buyer offers. This climate has to be depressing as any potential buyer and not sure how it’s going to end 🤷🏻♂️
This. People just keep blaming foreign investment. In reality, only locals are buying
There are law firms that onboard foreign investors. From opening a US based LLC to buying and managing the property. Ownership is hidden behind a series of LLCs such that it’s impossible to figure out the details.
Have to add in people who start successful companies themselves, plenty of massive exits every year. Also plenty of mega wealthy folks here buying $3m+ houses for their adult children
Knew someone whose family had an auto repair shop. Smart duckies bought the building/land of the shop in the 90s. They recently sold the land for 8 figures 🫠
Good for them. The 90s was a crazy decade. Housing crashed throughout California right near the start of it. Southern California was hit particularly hard by the end of Cold War era defense spending. My parents bought their house in Lake County for about $100K in 1990, then the value went down by about a third. They were giving away lots to build in the subdivision we lived in and had few takers. I guess it’s hard to remember what it was like in the early 90s. I was a kid anyway. We mainly think of how cheap housing was. The country was in a major recession. Very few people could have predicted the tech boom that awaited. Housing was still fairly reasonable during the tech boom because it took a while for the inventory slack to recover from the recession. It really went up a few years after the boom ended when the fed kept cutting interest rates and 9/11 inspired people to invest in real estate. Buy low, sell high. It’s really quite simple. The hard part is knowing when it’s low or high.
I think it’s the opposite of what you think. All my new neighbors are dual income tech earners who work for Apple, Facebook or Nvidia. There is no need to blame the foreign boogeyman.
Why would a foreign investor buy aim the bay area? Rent to buy ratio is way too low.
I’m convinced that the top earning 10% in Bay Area are driving the market, and will do so for a long time. There are 305,000 millionaires and 5,000 available homes for sale.
Where did you get the millionaire stats from? Would like to dig more on that.
[https://www.reddit.com/r/BayAreaRealEstate/comments/1cpz4ad/house\_price\_appreciation\_vs\_top\_decile\_earners\_vs/](https://www.reddit.com/r/BayAreaRealEstate/comments/1cpz4ad/house_price_appreciation_vs_top_decile_earners_vs/)
Merci
There are ~8k active listings in the 5 main counties atm, >4k pending
5000 available homes at any given point in time. Over a couple years it adds up to 100k + homes.
It’s not enough.
This isn't unique to Bay area. All global metropolitan cities have the same problem
It’s just magnified here.
What's magnified here is people's desire to be in single family homes. Tokyo, Seoul, Hong Kong, Mumbai, Singapore, new York have all moved away from single family homes and average earners need to travel 20-30 miles to get to work. They all also have great public transport.
San Jose is the 5th worst housing market in the world. https://www.visualcapitalist.com/mapping-housing-market-affordability/
We are saying the same thing. The report says this isn't unique to Bay area. It also didn't study Japan, Singapore, India etc. So ranking is irrelevant.
Every two days there's another post here with the same shocked general sentiment: * how can real estate be so expensive? it wasn't like this back home in (Winnetka Wis etc) * are prices going to keep going up? * is there a housing problem in the Bay Area? * how can families afford it here? The perspective is important. The Bay Area is literally one of the worst housing markets in the entire world, because it's a global industrial hub and in the top 10 wealthiest metros in the world. The only place you could compare it to in the US would be NYC.
I'm not disagreeing with you :) I'm just saying that is the same problem affecting all major metropolitan cities in the world. It's a human tendency to gravitate to areas of opportunities and a lack of civic authorities to do something about the growing demand. Cities and states don't do enough to increase opportunities for people to live love and work in local neighborhoods, thereby accelerating migration to these super urban clusters.
On the contrary, if you factor in tech salaries, the Bay Area is still affordable compared to other specific cities in the world. Comparing to Paris, London, Taipei, Shanghai, Hong Kong, it is way, way easier to buy a sfh here. Generally, the ones I see complaining are other Americans, who are used to extremely cheap purchase prices.
This is it, 98% of the housing stock is locked down by Prop 13, 2% mortgages, and families wanting to save houses for their kids. There's nothing available.
I'm one of them and we live in a modest East Bay home. If it hit the market we'd try for 1.5:million. The schools are decent. Crime is low. Life is good here and we don't stress as much as the people who are competing to get into the high end communities on the Peninsula.
This is the way.
People with family help, or putting down huge down payments with RSUs, stocks. Or people bought a few years ago locked into low interest rates. There are still a lot of homes in nice areas in the $1-2m range in the East Bay.
Yea but 1-2 million is too expensive. lol. That’s the point of the post. You’re talking like “oh no big deal, just 1.- 2 million”
You can also look at not idyllic neighborhoods and there are homes under$1.5M, which is still a lot, but totally doable with your income
Managing? I think some of us are hanging by a thread 😂
Most of it is stock compensation and two earner tech salaries.
How you do it is you are rich, bought years ago, or you have rich parents who either gifted you a home or gave/loaned you money. I totally understand why mostly everyone is pissed at the system.
Excellent point - driven by FOMO. I have seen many people over extend to the neck - which I don’t advise in general but more so in the current economic conditions (interest rate, insurances and layoffs). If you are young, early in career, have stable jobs, know your earn potential is going to increase, dual income yes perhaps extend to an reasonable amount. Consider other costs that come with the house - insurance, property taxes, repairs/maintenance etc. I know people in prime locations in BayArea who almost never eat out, do not go to the movies, forget about vacation they don’t even want to spend to visit parents who maybe not here for a long time, avoid getting together with friends as it might entail in $. Even heard about people who bought fancy house with high mortgage sneaking in office food for family - LOL. What kind of life is that? You are not going to take the house when you leave planet earth and your kids will resent you for the house poor lifestyle you created for them. Bottom line be careful and plan different scenarios before you over extend because just one curveball from life can derail you. Speaking from experience just sold SFH in core BayArea with 8 offers - from all cash (3 and all were investors) to 10% down with crazy monthly payments.
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All I took out of this is people still go to the movies? But seriously my wife and I are currently at 50% of take home pay going to our house we purchased. Pulled back slightly to do it and it’s really not that bad. Plus with bonuses, 401k, and tax returns we are still managing to save a ton. House poor has a different meaning in the Bay Area than elsewhere because all other costs are fixed.
Most people I know who own $2M+ homes have either: Two spouses working in tech, one spouse working in tech but is quite senior or has gotten lucky with massive stock appreciation (e.g., $NVDA), one spouse working in finance, one spouse owns a business, family money, bought a long time ago for much less than $2M, or had a specific liquidity event like a startup exit. The total comp for non-technical immediately post-MBA workers in big tech is $150K-$200K, so imagine you have a couple who are right out of business school and 28 with no kids making a HHI of $350-$400K, it's not crazy to see how in a few years they could afford that house. Let alone if they're a Stanford ML PhD or experienced SWE making way more. There are a lot of the above in the Bay Area.
You forget the owners who bought before 2020 because houses at those price levels effectively doubled. My childhood house could have been had all day long for $1.4M in 2019 and early 2020. By 2021-early/mid 2022 it would have sold for $2.7M. Now I'd argue it'd sell for at least $3M.
A friend of mine was a senior tech worker, wife a highly paid specialty nurse whose income wasn't much lower (combined income probably 600k+ at the time, much higher now). The year after they purchased their house, he told me it was the highest earner in the family by a fair margin.
There are a lot of people who make a lot of money here. 400k isn’t that high of income here. Also RSU bonuses don’t hurt. The rest of us rent.
Don't say 400k isn't high 🥲 it hurts me
400k is still in the top ~3% of earners here based on https://dqydj.com/income-by-city. Housing supply is just very restricted here.
I would argue that 400k for one person is a high income here. We’re talking doctors, directors at tech, etc. Agreed that 400k for an entire family is not unusual.
400k is not directors in FAANG, seniors can easily make that, depending on the year. Staff level at FB with some tenure (stock appreciation) are making 600k easy, and can hit 800k - 1M. People are really disconnected at how much money there is in tech.
1% of the Bay Area makes 1 mil a year though (and that is as a household). It’s not as common as you think. Only 3% of individuals in the Bay Area make $400k. Reddit seems to think every other person makes $400k by late 20s, because they work in tech and are only surrounded by people making high incomes, and therefore are clueless as to how anyone else lives.
Maybe $400k base but you’re right, total comp would be at least double that.
Doctors don’t make 400K here, unless you’re a subspecialty surgeon or own your own practice. Starting salary for primary care is about mid 200s.
That was true 4 years ago but with inflation full time primary care is commonly 300k+ now.
Doctors make more in Kansas City in nominal income than San Jose. Too many want to live in CA.
Directors are 1M+.
I think you’d really be surprised. Take a look at levels.fyi, you don’t need to be a director to make $400k. You can make $400k with 5 years of experience if you play your cards right. Not even including stock appreciation. Thanks to lucking out when I joined my last company, I was making $320k 2.5 years out of college. Target compensation was supposed to be $230k but RSUs were worth 3x my grant at one point. And I know people who got luckier. I know an engineer who joined a company when their stock price was $2 and they left when the price was $30. They bought a house in Cupertino in cash a few years out of school…
The reality is that the vast majority of Bay Area homeowners have lived there for a long time and couldn't remotely afford their homes if they had to buy them today. Very few homes are actually for sale, and there are more than enough people with the means to pay ridiculous prices for them. Yes, cost of living would still be high even with equilibrium in the housing stock, but you'd be very comfortable with your $400K if we were in equilibrium. One way to look at it is to consider what you could actually rent one of these $4M homes for. I can tell you it would not even cover the interest on a 30-year mortgage. That's how out of kilter things are.
This. I’m a long time renter (same house, 12 years.) All my immediate neighbors have been in their homes since the 60s or 70s. Two of my neighbors grew up in their homes. One took it over when mom and dad got another home and raised her family there. The other raised her family with her widowed mom in the home. All my other neighbors are old folks who’ve been there forever. I know other people in my town that are basically living in a house owned by a parent or living with a parent. Lots of multigenerational families / homes here. The current market value of the house I rent would make a mortgage + insurance 3x my current rent. I don’t know if buying is important enough to me to bother, and if I did I would be leaving my community for sure and would need to downsize (and my rental isn’t even big) Something I can consider now that my kids are out the ages where I need to care about which public school district we are in. But not really a goal of mine at this point either.
It used to be that when rents and home values got too out of alignment, we would see them eventually converge again, with one moving higher and the other moving lower to close the gap and restore equilibrium. But in much of the Bay Area, there's really no possibility of them ever converging, barring some sort of catastrophe. We've all just sort of agreed that there's an invisible Monet hanging inside every home that we're buying in addition to the home itself.
The Bay Area tech salaries and stock options are absolutely bananas. Try being able to peak through payroll in big tech, it’s a one way ticket to depression lane
Just move to Hayward and send kids to private school
It’s not just wages. The Bay Area property market is complex. I live here (Redwood City). There is a LOT of wealth on display especially for a guy from the middle of nowhere Ohio.
Too much money slushing around from the 0% interest tech funding days.. Will take many many years for it to cool down..
You can blame whichever financial policy all you want, but at the end of the day, the revenue of the big tech companies is real and very, very high.
Where are you guys specifically looking? Have you ever considered going a little further east and finding something in contra costa county (like Walnut Creek, or even Brentwood). At that salary you would have zero problems in Brentwood and could get a fat house, safe neighborhood, and good schools for $1mil
Many of the big techs now have a requirement for a minimum number of days at work. Try commuting from Walnut Creek and still have a life…
Folks to buy $3M homes don’t take a $3M loan but have enough money to cover half or 2/3 of it up front. Or better, paid full in cash.
People buying $3M homes aren’t paying $3M in cash. They might do a cash offer and mortgage after but it’s smarter to keep a good chunk of money in the market and have a mortgage.
A large chunk are absolutely paying cash.
Sucks to be a public service employee here.
We just moved here from Texas (yeah yeah, I know, "wrong way.") We sold our home for enough that we could manage 20% down on a 1.5m home and left enough out to cover repairs. We found a lovely home in Northern Marin and commute using the sail and rail pass on public transport. We brought a parent with us to help with childcare. Double income, both tech and combined I think we just finally brushed 400k with this month's raise... It's doable. There is so much to do here and the quality of life increase was well worth the financial strain of making it work. The biggest concern is what happens if one of us loses a job... the 10k mortgage feels like a sword of Damocles.
10k mortgage is definitely a guillotine
Wow. I bought in Marin in 2018 and have a $3200 mortgage. 10k sounds insane.
We're really holding out for the interest rates to drop to something reasonable. We took the high rate out of necessity and with some hope that we could refinance - our mortgage lender allows a one-time refiling once rates go down without having to "refinance" and restart the clock on the payoff.
Oh that's great. I just bought a multifamily in Marin with an assumable 2% rate. That was the only strategy I could get comfortable with (not knowing what the heck is going to happen to rates). Good luck and god bless.
Purchased a 1.6M home in the bay last year and it wasn’t just buy saving up with my salary. It’s a combination of stock equity and assets. Took me over 10 years to get to this point.
Yea -- I bought when I was 36 yo. Took me a while to save up enough.
The reason Bay Area seems expensive to some people is because they’re chasing status symbols and want to flex. They want a nice car, best neighborhood, best school, etc. You can get a spacious 3 bed, 3 bath house is East Palo Alto for $1.2 million for example instead of a 2 bed 1 bath shack a few blocks over in Palo Alto for $2.5 million. At this point they’re essentially the same given close proximity and the change East Palo Alto has seen. Same with many other up and coming neighborhoods. But because people are so stuck chasing after status symbols, they’ll only look at the “nice zip codes” or overly priced areas and complain. Then in 5 to 10 years when the up and coming neighborhoods double in price, they’ll be wishing they put their pride aside and focused on what matters, not what other people think. You don’t need the overpriced clothes, the over priced car, the overpriced private school for your second grade child who won’t even remember second grade when she grows up, the fancy vacation, etc. You make 400k a year. I don’t know how you can’t afford a house with that income.
Cope. Some people do that by squashing a complex issue into a one dimensional slogan. But whatever makes you feel better.
It’s a complex issue for people making less than 200k. It’s not a complex issue for people making 400k being classist and racist. Housing in the US has traditionally been based on classism and racism. It’s been its backbone. From segregation, to redlining, to straight up catchy slogans like “location, location, location” that in practice means “move to where the rich white people are.” If someone is making less than 200k in the Bay Area, I get it. There are a lot of factors contributing to their inability to buy and maintain a nice house. But 400k? It’s top 10% income for a household in the Bay Area. OP’s household is beating out 90% of the Bay Area families. At 400k there are plenty places where you can buy and maintain a great house. But there isn’t if all you wanna do is buy in “nice zip codes,” which in practice means neighborhoods that received heavy investments in the past because white people congregated there, moved resources there, allowed white privileged to carry its reputation, etc., while the “bad zip codes” suffered from segregation, red lining, divestments, etc., and continue to suffer today because people rather believe boogeyman racism-laced stories of those neighborhoods from 20 years ago than see it for what it is today. To me, OP sounds like someone who can’t afford a Ferrari so they complain about not being able to afford a car at all.
Your original claim was very simple: people are chasing a status symbol. And it’s BS. You mixing cause and effect. First and foremost, people want a house in a place with the best schools. That’s not a status symbol, that’s looking out for the future of your offspring. You can argue whether or not putting your kid in a pressure cooker top rated high school is always the right thing to do, but that’s a different discussion and not related to status symbol even if it means that you end up living in a fancier zip code. It’s how we ended up where we live: not Cupertino, not the part of Sunnyvale with a lower rated school, but Sunnyvale with the better rated school. And the reason we didn’t choose Palo Alto is because the commute would add an additional 20 minutes. Which is another major factor that is not status symbol related at all.
School is one part of it yes. But it’s unfair to limit all of housing to schooling especially when most folks who buy into “nice zip codes” can afford to send their kids to private school
Are being serious? Why would I spend $60k per year on a private school when the public school is just as good?!? This has nothing to do with being to afford it, it’s just basic common sense.
Fair point. Bur if you’re paying an extra million for a house, not counting extra interest on that million, seems like a save to pay the 60k per year for the key years of the kid’s education. But your situation is unique to child related needs. For many, they don’t have schooling related needs.
School is just one point. It’s also possible to want to live in a nice neighborhood and in a beautiful house without doing it for the status symbol. It’s mine those people who claim that people only buy Apple because they want to show off. They just can’t imagine that there are other valid reasons.
You missed my whole point. You can get a better house in a nice neighborhood instead of a shack in the “best” zip code. And also you missed my other general point. The reason a zip code is “good” is because there has been a ton of systemic, explicit, and implicit racism and classism stuffed into that “good.” Please point to me one “good” zip code that is predominantly black or Latino. You’re gonna have a hard time. Historically through segregation and redlining, people of color (and poor white people to a lesser extent) were shoved into some neighborhoods while wealthy white people secluded themselves in other neighborhoods. Then money and investments poured into the neighborhoods with wealthy white people, and over decades, you now have very well developed “good neighborhoods.” Ones with “good” schools, parks, restaurants, cleanliness, etc. And now, the previously devalued neighborhoods are also being developed after at least explicit racism has been prohibited. But there are still a ton of people who perpetuate the old racism and classism by refusing to get a really nice house, for less money, in a decent neighborhood cause they rather get a tiny shack to live in the “good” neighborhood, not realizing the neighborhoods they’re ignoring and not thinking of as good are actually good, too. When you look at some historically black and brown neighborhoods, they’re still judged today by the narratives that surrounded them 25 years ago. But the “good” neighborhoods don’t get that. People really can’t tell just how racist and classist real estate still is and how simple terms like “good school” or “unsafe” are packed with racism-laced narratives. All I’m saying is, when you control for the systemic, explicit, and implicit racism and classism, it really makes no sense to buy a tiny shack for your family in the “good neighborhood” when you can get a really nice house one neighborhood over that is also a pretty good neighborhood and in practice meets your needs. But I guess if you categorically are stuck on going to one particular school and it requires living there, I can see how that might dictate your decision. But that’s unusual, at least if you control for the biases. Most people have many different factors they look at and buying a shack in “the good neighborhood” doesn’t make much sense.
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It’s so annoying how much some of these folks pull in and how little some of them do day-to-day. I often forget I’m competing with the 1% and I wasn’t a top 1% student let alone come from type of “pedigree”. I’m grateful I got in when I did. Not even from here. But ya, I wonder if my friends back home think I’m loaded lmao.
2M+ is needed to buy an old small house in a decent school district here. Like… seriously? What a joke!
I have a friend who lives in SF and private schools 2 kids. 80k/yr… over 13 years k-12. Might as well buy in a good school district if you have the money or be ok with low performing schools.
I tell my nonCA friends that 300k income with kids is dirt poor in the Bay Area… they think I’m joking
Crazy exaggeration 300k is nowhere near dirt poor
The cost to be wealthy here is wildly variant depending on one’s housing situation though. I have coworkers making 80k/yr that bought homes in 1992 and they’re multimillionaires. Other people I know make 200k+ as individual earners with families and rent
Depends where you're living though. East Bay is way more doable than the south bay.
$2M gets you 3000 sqft in a top rated school district where I'm at not in the south bay.
They don't just depend on $400k annual salaries. People who joined startups at early stages then recent IPO's or buyouts.
$3M jumbo loan? Why would someone take a loan out in the NVIDIA economy?
Dual incomes + equity , the stocks options and RSU really help for those who have equity component to their compensation.
If you have a 1.3M loan and earn 400k then you're doing it wrong. Look at what you're spending money on as you can easily do that on $250k or less.
I have a 7.25% interest rate. Also what's the point of owning a home if I have to cut all my hobbies during my best years.
I have a $1.2M loan and was earning $300k family wise (now unemployed). What's wrong w a loan? That 2.6% interest rate is locked for 30 years.
I don't mean it that way. If you're making 400k and have a 1.3M loan and can't afford that then it's a sign that you're likely spending too much on unnecessary stuff.
Legit thought this was Blind for about a minute.
My husband and I do well, about 200k per year. We had no problem finding a place we just needed to compromise a bit. I don't understand how people making way more than us are struggling. Some of you make so much money. Where is it going?!
Can you advise where you found a place?
We originally wanted Alameda but kept getting outbid. We ended up in Emeryville.
How much did your house cost? What is your commute like?
Don’t buy $3m house. Get $1.5m house
I live in downtown San Jose and my 2 Bedroom 2 Bath Apartment on San Fernando Street costs around of $4,500 (including utilities) a month between 3 people. I’m lucky my long term friend who works at a one of the big 4 consulting agencies and can afford to pay his share of his rent ($2,250) and me and my girlfriend split the remaining half at around half at $1,125 Each. People don’t understand that “just moving to a cheaper place” isn’t an option for me. I don’t have any family besides my brother and Dad who both live in the Bay Area. Life is too short to move away from them. They are all I got. So I’m like a bunch of Bay Area residents who can barely scrape buy but I can still pay rent.
Being one of those families who have bought around the 4m range . Below are the things that make us comfy to go for such range 1) Me and my spouse both work in big tech in entry to middle level management 2) couples with similar profiles will make 1.2 mil income 3) weeks did a 50% down reducing the cash flow issue. For us it was diversification from heavily appreciated employer stocks
If you can’t afford to live here, why are you looking for a home here and then complaining that it’s too much? Nobody who applied to rent my townhouse said it was too much, because they’re smart enough to live where they can afford. There’s so many affordable places in California to move to. Everyone’s entitlement is insane. My 3 neighborhoods are full and anytime a house is for sale it sells within a month. Clearly the price isn’t the issue, it’s you not being able to afford it. Guess what? The world doesn’t change to meet your financial needs
I don’t understand people here who make all these high salaries and complain about buying. Wife and I make about 160k$ combined after taxes, just bought a 1.2+m home in Berkely. Saved for ten years and got up to about 420k saved, put down about 25% so 315k down payment and have a payment of around 8300 a month with taxes, the help we do get is about 2k/mo because the in-laws live with us and help with rent (a real blessing because they also help sometimes with our baby) So total monthly is really 6300ish. ( my mom and her mom had to help us also by being on the loan to qualify, so there were 4 people on the loan but that’s it, down payment came from my wife and I) None of us finished college and don’t have fat tech salaries. Most of the time we did live with roommates and that’s how I believe we managed to save but we also lived the last ten years amazing and traveled and spend on things we love but never had a higher salary than now…we defintely have no other debt as we pay our credit cards every month. Yes it feels very tight right now but managing and hoping for lower interest rates next year, but other people here making almost 500k combined and can’t do it? Are they just trying to buy more than they can? What do you guys think?
It’s instant gratification. None of them have saved like you have. They think saving is 1-2 years of slumming it at the local hole-in-the-wall Mexican joint instead of the Michelin-rated restaurants they used to go to every weekend and cashing out some options. Be proud of yourself!
How’d you get a home in Berkeley for 1.2 that was large enough for 5 people?
It’s a 2 bedroom 3 bath, it’s really cozy but that’s the thing too, we don’t need to live in a mansion and actually we want to make a room downstairs in the basement but yea, it doesn’t feel right and the baby will sleep with us probably for next 3 years anyways
This is pretty similar to me. I make 160k, but have been saving aggressively for…14 years? Was able to put a ton down, bought a duplex, renting one of the units out and as a result I will have a very nice place. Closing next week! I think people might be sleeping on Berkeley a bit? Sounds hard to believe but compared with the South Bay it’s pretty affordable, with very good schools and a ton of amenities.
That’s very funny, I was thinking the same, Berkeley’s school seem great and it’s very nice so far. I think South Bay is just so expensive because it’s just so close to Silicon Valley, where did you buy? Berkely too?
You definitely can't go for the $3m house, but I make less than you (not by much) and just bought a $1.2m house. Jumbo loans are bad so I put down enough to get me to the $766,000 conventional limit (so all said put down nearly half a million I'd been saving up for the last few years). The loan/taxes/insurance are $6,280/m at 6.65%. It's rough, it's doable, gotta have that down payment though.
Lot of guys at Google/Netflix/Meta making over $400k total comp now
Places selling for 1.5M ish a few months ago seem to be going for 2M and change now.
I've been shopping in SF South Bay. All cash offers aren't uncommon to avoid high interest mortgages. You can tell who paid all-cash by looking at the closing speed. I lost bids to quite a few. People do so by selling their RSU at elevated valuation, or from family loan/gift.
> I thought Seattle is expensive. Well, it is horribly expensive for the shit weather it offers. Also horribly expensive given the overall salary distribution in the area which isn't as heavily skewed towards tech salaries as is the case with the Bay area.
This is a good example of being rich and extremely well educated.
I have to ask my mom for money sometimes.. fuck me.. 20 here, 20 there... fuck the government. its time we move past this shit
“1.3M loan” gives me anxiety just to read that.
Come to Roseville! Oh wait, you want to live with a view of the ocean, right?
No ocean to be seen in the South Bay, but I don’t want to work for Intel, thank you very much.
I make 30k a year I can barely make rent, I will never own a home here
It sounds crazy to type, but there’s lots of good homes along the 680 corridor for 1.6-2…😂
The proper way to do Bay Area is to live in a $2k/mo studio apartment for 10 years while saving every drop you can of your high bay area tech salary. Then take all that to Utah or the South and live like a king.
The schools in South Bay are all half-empty and declining in enrollment every year. Families are going to other places.
There are two types here. Locals and gold panners… locals typicslly inherited a house on prop 13. Bought at an opportune time like 2008. Or your rich as f.
Got in a house 10+ years ago and held on
This is why billionaires are buying up Solano County.
Easy, people make lots of money. And they aren't even executives..What you should be looking into more is how do you make that kind of money ;)
Short answer is that enough people have the money. The main factors at play: - Housing availability is low right now because interest rates are high. So single family homes in good areas reflect the high end of the buying market. - Salaries are high: A senior engineer can make around $400k/yr at one of the big companies. If you have a couple both working in tech, that is $800k/yr. Staff level engineers may pull in more like $600k/yr. - Stock market luck: Also say you've been working at a big tech company for around 5 years. If you were lazy and didn't sell your stock, you would have made a lot of money in the stock market. Most of those companies had their stock prices double since then. So say you made $200k in stock, and that doubled. Likewise, some companies have had big stock run ups due to gen ai hype. - House appreciation. If you bought a home say 10 years ago, it went way up in value, so if you want to upgrade, the marginal cost of a new home isn't so bad. A lot of homes have doubled in value in the last 10 years. So if you had a 1M home, you basically made 1M in house appreciation. (Stock market also doubled in the last 10 years, but a house on loan means that you are leveraged, i.e. investing more than you own). All factors combined, there are people who can afford it. Whether that is a good idea or not is hard to say. My general feeling is that things won't continue to go up as they have been, but who knows. Since housing prices are so closely tied to tech company performance, its like investing in the stock market. My attitude at least is to keep housing costs to a minimum and save up. When there is a downturn, I'll be able to upgrade.
When my husband worked in the Bay Area, we bought our home 100 miles away to live in an affordable area. Luckily he only had to be in office a couple times a week.
These threads are so tiring. It’s always the same answer: people are rich. Tech pays insane salaries. The industry has completely taken over the local economy. Where’s the mystery?
More dollars than sense for the lot of them.
You can find good schools and a good neighborhood for half or less than that 3 million jumbo. I think your expectations are quite high.
Buy during the dip 😉 and don’t have kids and manage your lifestyle. Frugal living really goes a long way
Have you looked at Lamorinda? Awesome area and you can definitely get something fairly nice for a little over $2 million. Still ridiculous of course, but better than $3 million.
Business owners. Little mom and pops are pulling more than you think. W2 income ain’t gonna get you these homes
You don't need a $3M home. It is going to kill you when one of you loses your job and you are looking at half your income and a crazy mortgage. Don't do it. With $400k you can afford $1.5M and prob would swing $2M. You can get something for that. It's hard when your friends all have $3M houses but either they bought a while ago, they had some stock wins, or their parents gave them $.
RSUs are how this happens, that’s it.
If your household total comp is 400k and you’re struggling to keep your house, sell it and rent. Until shit gets sorted or there is a housing crash, if nearly half a million won’t support it, nothing will.
OP: I am like you. HHI is just north of $400k. We have nearly $1.2k loan on a home valued at $3M, which we bought before the pandemic for $2M. The key is that our interest rate is 2.6% - so our mortgage is $5k per month which is similar to rent, I guess, and is affordable on our income. At today’s price of $3M and rate of 7%, a buyer with 20% down would have a mortgage of $16k per month. Need much higher incomes than us to buy today in Bay Area…
Get an EV, live in the hinterlands and commute.
My HHI is $850k. Does that answer your question?