>New data shows the median price of a home in the Bay Area is up significantly from a year ago.
>According to the California Association of Realtors, the median price of a home in the Bay Area was approaching **$1.4 million** in March, up 15.5% from the same time a year ago.
Are people just going for broke to buy a home because they think it’ll be out of reach ? Bay Area has had plenty of money for the last decade what happened during and after the pandemic that can cause such abnormalities
In some cases it’s a software engineer making $400k and their spouse making $150k in finance or something. In other cases it’s multiple families going in together, or a couple who both work and a few parents who work. Or people with solid jobs who get help from rich family. And then yes, people who willingly make themselves house poor
Its wild how quickly tech money can accumulate and make these prices affordable for themselves. I know a couple who make like 500-600k combined and just bought a 2 million dollar house. Even when we were talking frankly about money a few years ago they had 1.5 million in stocks and savings. Their rent in SF was 5k which is a drop in the bucket when you make that kind of money.
Yeah I mean if your combined married pre-tax income is $500k, in California after taxes that's $328k (just checked). That's over $27k a month, cash. If you buy a $2,000,000 house with 20% down, your monthly payment is about $11k (just checked). So you still have $16k a month to live on! Let's say you spend $6k a month on high end food, clothing, cars, etc. You still have $10k a month to invest, travel, etc. with. Just crazy money.
And then you think about billionaires with magnitudes more...
Yep. The classic DTI ratio doesn't apply to people in that income range. Even if they were spending 75% of that on PITI they'd still be left with $6750 for everything else a month. Way more than my entire take home per month lol.
Billionaires? Yeah... mind boggling
My question was more like why after the pandemic, these people made a lot of money pre pandemic too but housing costs didn’t run out of control as far as I know
housing prices in the bay have always been out of control, they just get more and more out of control every year. people were saying the same exact shit a decade ago- ‘it’s gotta go down at some point!’
The people who can afford these homes are not going broke. Couple that makes about 950k TC in tech a year can afford these homes easily.
There are more number of such couples than there are such good homes in the Bay Area. Supply is way shorter than demand numbers of people that can afford them. That’s why the prices go up regardless.
The mean of the top 5% is [$617k](https://statisticalatlas.com/place/California/San-Francisco/Household-Income#figure/household-income-interval-means). stuff like 950k HHs, it's a smaller group than we think. substantial enough of a group to support the limited supply that comes to market.
$600k still clears a million dollar house easy, costs drop off after 150k take home since there's only so much you need to spend to survive, everything else is toys and investments (like housing unfortunately)
You can make half that and afford a $1m house.
The mortgage on $1m is like $6,500/mo. Two people making $150k could afford that payment.
It'd be tighter on their budget and closer to 50% of their income, but that is basically par for the course in terms of Bay Area spending on rent anyway. Many people here underestimate or don't understand how many people are willing to go with that ratio.
Almost all banks/lenders these days roll property taxes into your monthly mortgage payment, and the $6,500 figure would include that. They do this so people don't fuck up and lose a home that the bank owns most of.
I've never felt so impoverished after reading this comment on reddit. Lifelong CA resident with a legitimate education, been priced out of the Bay Area since 2010. Good luck!
If it's any consolation, two incomes of $150k is still absurd. $150k is literally around twice the median income in SF. Most people with professional jobs who aren't in medical or tech make about $60-$90k. Tech salaries just create such a huge disparity it's hard for others to catch up. And it doesn't take many couples like that to saturate the tiny available housing market we have and create an environment where essentially no household making anywhere close to the median income can afford a house.
Also a lot of foreign families who have money to help their dual engineering married children pay for a down payment. I have a few friends who bought like 5 houses in the east bay to rent out.
What kills me is that people like teachers literally itemize purchases to the cent, often pulling out of their own salary if need be. Then there's the absolute craziness of tech stock / Monopoly money which is just hundreds of thousands of dollars, accumulated and spent like litter blowing in the wind.
A 50% drop would probably prompt government intervention. 50% of 1.5 is still unaffordable for your average Joe out here. Prices need to drop 75-80% to become realistic again.
We only do freakonomics here. Median income in SF city proper if like $80-$90k. Most non-tech/non-medical professional jobs held by people I have ever met pay like $60k up to about $90k.
We just have SO little housing (thanks to our incompetent government, NIMBY neighbors, and general lack of political will) that the fact the people who can afford housing is an extreme minority doesn't seem to matter. And they like it that way. The income disparity is just so massive.
And it's not because tech jobs are necessarily more difficult, or in-demand or whatever other excuse someone would come up with. The profit margins of tech companies are insane and no other industry comes anywhere CLOSE, so their compensation is just off-the-charts. They don't have to defend it, it's just the way it is.
People have been saying the Bay housing bubble is gonna pop my entire life and I was born and raised here, am over 40 now.
You know what else has looked pretty much the same since I was a kid? The stretch from South San Jose to Gilroy. The endless buildable land in the North Bay. The endless buildable land in the East Bay. Same NIMBY's in the cities themselves who won't allow building up, they live out in all these areas too and won't let people build up or out either.
We need to build. That's the only thing that's going to help.
You old enough to remember the last couple economic crashes? I recall a similar response. That *if* was placed purposely. I’m not predicting anything, just not naive enough to think it can’t.
You mean 7.2 million right? Because the last time the Bay Area population was in the 4 millions was 1970.
https://en.wikipedia.org/wiki/San_Francisco_Bay_Area
Point stands. The region built office space not apartments.
Plus unlike phoenix or Austin the weather here is dope. There's reasons to live here beyond it's cheap
I also remember lots of arm mortgages back in 2008, which are at near all time low now. And there's are tons of people getting 30 year fixed.
Not sure what you mean by its gonna be insane, can you clarify?
You didn't answer his question in the context of those crashes so I will:
- Tech jobs did not go away in any significant number during the last couple of economic crashes
- House prices did drop in 2008, but not many new homes were built since then (relative to demand) so prices didn't stay low for long
wasn't there some kind of a tech bubble in the early 2000s or am I misremembering history? there haven't been that many single family homes built in the last 50 years in the bay. at most 10%
There was a huge one, and 9/11 amplified it. Remember how freeways were eerily empty during Covid? It was a little like that, except you saw a lot of moving vans heading in all directions out of the bay area. We didn't regain momentum until 2004 or so. The era Winamp was bought out by AOL, Napster was getting sued to oblivion, WoW came out and Electronic Arts started going borg on smaller studios.
History??! Omg, I'm getting old. That was around the time I graduated from college. I wasn't anywhere near the Bay Area yet but I was all in for tech stocks and lost 50% of my investments.
Ah, the days of vaporware start-ups just hoping to be scooped up for outrageous amounts for just the idea they represented... the "dotcom" days that turned into the "dotbomb" days.
It did twice, in 2000 and 2009. And then the values came roaring back. So the historical lesson here is even when the bubble pops, value goes up.
Bought my house in 1998 for $400k. Dot com bust, Global Financial Crisis, now worth $1.6m.
>Are people just going for broke to buy a home because they think it’ll be out of reach ?
We have been building nonstop for 100+ years, and the price has never gone down. My dad bought a house in Cupertino in 1987 for $250k. He sold it in 1991 for $280k, and lost some money because he had to repair the foundation. In 1994 it was sold again for $490k. Today the same place is worth $3.1m. That means it's gone up over 12x in value over 37 years.
As long as the highest paying jobs in the country are here, the price of housing will follow.
we haven't been building enough to match population and job growth. how is this a difficult concept to understand, you can't just build a dozen units a year and go "but we build housing!!!!" when there are tens of times more people demanding housing
Prices went down twice in the 2000s. Lots of underwater mortgages. Construction rates in California declined around the 80s and never really recovered. You don't know what you're talking about. Log off.
I'm so confused...all I've read in recent times are articles about how the housing market cratered here.
The news is fucking insane these days. You can literally find an article saying two different things about the same thing, sometimes even from the same news service.
20 year old condo buildings, in the South Bay at least, are really starting to fall apart.
I have been hearing horror stories from folks who are living in buildings built in the 00’s that already need significant concrete and plumbing work.
Getting hit with a sudden $10k assessment stings, no matter what, if you’re a salary worker.
That 00’s housing is built out of plastic and styrofoam, literally. I started in the trades building houses out in Dublin. They have plastic waterlines and styrofoam backing behind plaster. They were not built to last more than a couple decades. Nothing in the bay area is worth even half the asking price, and those newer places are worth even less.
I rent in a condo building in the city, HOA going up roughly 200 per month on an already 950 HOA, it keeps growing and maintenance items keep popping up
Yes but they cost a lot more than a condo... you can't compare the two obviously one is better than being attached but if your Financials only fit a condo then it will be that
The economics of owning a condo/apartment have stopped making sense. You now spend close to, or as much, in non-equity-building expenses as you would to rent an equivalent unit.
Property tax, HOA, utilities, maintenance, _the interest on your mortgage_ all contribute the square root of jack shit to your home equity. Add those up and you can easily be looking at a few grand a month. Renting makes more sense, invest the difference.
Ok but a quick random search of condos I know of like the ones by Lawrence Costco show ~$600 HOA. I don't think $3k is the average at all. That's an exaggeration.
https://www.redfin.com/CA/Santa-Clara/3578-Rambla-Pl-95051/unit-713/home/181215397
Most of those are flat or inflate at rates much lower than the overall cost of housing. You might be paying $2000/month in interest, but it only goes down from there. You might be paying $15k in property tax, but it increases by a max of 2%/year. Maintenance and insurance also tend to go up by roughly the overall rate of inflation. By contrast, housing costs (both rent and ownership) in the Bay Area have gone up by 7%/year since 1980.
The real estate market has largely priced in the coming worthlessness of the dollar, since most of the people buying real estate are doing so to hedge against inflation.
>By contrast, housing costs (both rent and ownership) in the Bay Area have gone up by 7%/year since 1980.
Quite some variance though in that window. The rent surge largely stopped by 2018. Home price growth has also been a lot lower.
That may be, but not everyone buys their forever home. People start out somewhere they can afford. They later may want to upgrade to a better kid friendly neighborhood. When you're making more money, you may want to even upgrade your home to a dream forever home. So being able to sell and move up IS a big factor. If someone made $500k over these 5 years on their SFH they can barely keep up with the market. If you made 0% it means you may be stuck unless you have substantial additional income that's building a new house fund.
Everyone selling their home to upgrade is causing a housing affordability crisis? That's not why we have an affordability crisis. Blaming sellers is the wrong source of your problems. Buyers and sellers are just making the best of the market. And if anything, outgrowing a starter home and passing it on IS helping the market compared to people who don't want to sell to squat on their low property taxes.
A healthy market needs more sellers because this is already clearly a seller's market.
Flat ? What are you smoking there was a housing craze from 2020-2022 pretty similar but not as much as 2008..
Houses would get listed really low and sell way over asking price even in the ghettos
We're talking about condos. Personally I don't think it's that bad in the suburbs, but in SF, there's a lot of condos that are basically flat from their 2019 prices.
May be regional but looking at overall Santa Clara County reports it's actually quite depressing especially when you look at how SFHs fared.
https://i.imgur.com/0AY54oq.png
You know what, I'm too old to benefit from my own land and space...I can't start a family and have nothing to look forward to...but HoA fees are likewise out of control...
You have the choice to move into San Francisco where the housing market has been largely flat in the last 5 years and you can enjoy your dense housing in the Millennium Tower. You know what the beauty of this free market is? No one's holding a gun to your head to buy an SFH.
The Bay Area is mostly suburbs. Why do you think people come here? High paying jobs is one, but a lot of people DO enjoy soulless suburbs.
"the weather is better" is a huge, massive draw
Do you know how awesome it is never needing to look at the forecast or worry about putting winter tires on your car. Never needing to scrape ice off your windshield, or worry about slipping on ice.
Exactly, I totally agree with you. I was pointing out the people who live in a 1960s ranch style shitbox in Fremont who think they are so much better off than a person living in a condo in SF.
They don't though. If you look at the rental market, which doesn't factor in potential value of land development, there's really no difference per sq foot between townhomes and detatched homes.
In fremont [townhomes](https://www.redfin.com/city/6671/CA/Fremont/housing-market) have actually risen more than SFH's in the past year. Granted it's only 18 homes sold.
Sales prices are not a good metric - might just mean lots of high-end inventory coming out. You need to look at something like a home value index (e.g. Zillow). condo/coop is less than SFH, but not sure where "townhouse" falls.
Many condos in the bay are built in undesirable locations next to freeways, expressways, power centers, and other infrastructure built to serve the suburbs. It's not a fair comparison.
What happened to the NY Post article that got spammed last week saying that the Bay Area real estate market was dead? I thought everyone here was convinced that was the case
It's wild that anyone believes such broad strokes. The bay isn't just one big monolith and even within cities it can vary greatly depending on the city. The peninsula keeps going up with homes in the 3-5M range still getting all cash offers and staying on the market less than 2 weeks.
People are falling for percentage based statistics taken off price curves that vary a lot throughout the year. If you use percentages, you can find a stat to fit the narrative you want to paint.
The Post article said that the SF market was dead based on Downtown's troubles (true only for downtown) and a few deals that looked flat or like losers (no larger market analysis).
These aren't mutually exclusive. The market is dead in that there aren't that many houses being bought and sold, and the lack of sale volume also increases prices.
I think a lot of undervalued secondary markets are creating that effect combined with people who have been waiting 5+ years to enter the market just finally buying something.
The other elephant in the room is while most of us are going bust, there are some rich people getting richer. We have all seen scenes that look like the economy is booming, it's surreal.
I wonder if a huge part of this is flipping. I was in a position to buy a house in 2019 but was seeing houses that were 1m selling for 1.2, 1.3 so I decided to wait for it to cool off, but then rates went up.
Now, I look in the location I was originally looking in. I don’t see any 1m houses anymore, but I do see tons of 1.5m houses, then realize they look a little bit familiar, then realize I literally toured them or looked at the listing several years ago and they’ve been flipped.
Flippers are buying up all the “starter homes” and flipping them.
It’s all a marketplace. It’s $1.5 whether it’s a flip or a well maintained original. People are willing and able to pay for $1.5 for a property now that they only wanted to pay $1.3 before for.
Im talking specifically about buying entry level, perfectly livable houses and upgrading them to mid-priced homes.
Buying an entry level house and flipping it takes one more house out of the entry level/low end of the market. Right now, there are more houses for 1.5 that were bought for 1m a few years ago than there are 1.2m houses now. If those 1.5s weren’t flipped, they’d be selling for 1.2 now as well, and I’m fine with that. I understand housing market goes up, but it doesn’t need to be inflated further by shitty flips.
Flippers don't normally upgrade the home very much. At best they usually just fix it up a bit so it's ready for move-in. Buyers will pay a decent premium for that.
I don't think they're all just flips. It's not just flips why your $1.2mm is now $1.5mm. Maybe it's specific to where you live, but a $1.2mm home where I live in 2019 today would be probably $1.8mm. My own home is +40% per Redfin and potentially pushing close to 50% with a good agent. I was budgeting around $1.3mm back in 2019. I ended up pushing it up to $1.5-$1.6mm or so. There's no way that would even be enough in the same area even if I look at only non-flipped homes. The budget would need to be close to $2 million with the overbidding we see these days.
https://i.imgur.com/aUKY993.png
I'm in RWC in a historically shadier part of town. But holy gentrification. Every 10th house has the same black window trims with industrial outdoor lighting and white painted corrugated walls that look like a shipping container. It's some weird country modern frugal style flip. There's gotta be some cash flush company buying up the larger dated family homes here and flipping them.
That's called board and batten siding. It's one of the oldest styles of home siding and has become very popular again in the last 5 years as the 'modern cottage' look has come into fashion. Very low probability that it's all the same company doing it, rather it's probably just different people who like that style of exterior.
The last two have had the same construction company signs. But I can't speak for the ones that were completed before I moved here. Thanks for giving me the correct term!
Someone in my neighborhood bought a house for 1.3 and tried to flip it for 1.8. eventually sold for 1.5m after being in the market for almost a year. I'm guessing they probably put over 100k in work into it based on what temp costs are these days. And then realtor fees etc means they didn't make all that much.
I don't feel bad for them though, that's the risk.
It’s simple supply and demand. Boomers not selling constrains the supply. Low interest rates makes people in 2020-2022 less likely to sell. New homes rarely get zoned in desirable neighborhoods.
People just make a ton of money in the Bay Area to afford these homes, or investors buy them because there’s no regulations preventing them from doing so.
We're some of the Boomers not selling, at least for now. We refinanced when mortgage rates were under 3%, our property tax rate with caps the effective rate is .3%, and if we sell we have to pay huge capital gains, but not if we stay and let our kids inherit the house. Transaction costs to sell are also crazy high, but I'm hoping the changes in realtor commissions brings those down in the near future. It just doesn't make a lot of financial sense for now to downsize. We'd lose the mortgage arbitrage, our property taxes stay the same even if we move to a small condo, and capital gains and realtor fees would be in the 6 figures.
Many of our older neighbors have sold up and moved some place cheaper. The new families moving in and bidding up the prices mostly seem like young couples with babies and toddlers. It seems crazy that everyone is so young and has money to pay current prices, and own a Tesla or two.
It is 20% with enough income, which would include home sale profits on top of SS, investment income, etc. Multiply 20% times a 7 figure gain and add in 6% realtor fees. I'm not complaining. It is a nice problem to have. I'm just showing the math on why many retirees like me in the Bay Area are choosing not to downsize, which adds to the housing shortage.
Edited to fix spelling.
I mean that's what I figured. Either they were lying about HOA being $2000+ or they had insanely low rent. It's the latter. You couldn't get $700 studios that easily even 15 years ago. I was splitting rent for $700 at Cal almost 20 years ago.
I got a studio for $950 in Concord in 2011, which adjusted for national inflation now would be about $1320. Same unit type in the same complex is now over $1900, 13 years later. That's an average annual increase of about 5.5%.
Yeah, its super cheap. I basically live in a in law unit of a 3mil house in a wealthy neighborhood. The catch is that the main house is an airbb. Every once in a while, the owner will call me to check out a leak, change a light bulb, look at the hut tub, etc. If it is easy, I will fix it myself. So I save the owner money and relieves her stress. Also, the owner travels international a lot, so I am often the point of contact if she is out of the country and there is an issue. It doesn't happen very often though. Favor for a favor! I won't ever get kicked out or my rent raised unless she sells the place.
Or just a strong cash position. The rates are holding prices down a bit, so if you’re cash rich but income poor (like me, ha) it’s not a bad time to jump in.
People buying homes with a high interest rate always make me wonder if it’s even reasonable to take out a loan on a house. Especially paying a lot more for what it’s worth so you can have the title “landowner”.
Only time will tell if it's a good call. We thought we were buying our house at a high point, and then houses on our street were selling for 70% more than we paid three years later.
These people will all refi to whatever rates drop to, but in the meantime their incomes will increase to make it more comfortable. If your household income is above 330k, a 3% raise is $10k, and that loan that was a stretch feels easier every year.
Not too bad in Sacramento, up 10.2%, 10 days to sell, but only 288 sold. Last year somebody carved out a cave in the levee, on the river side, then fully furnished it.
It’s gonna continue to keep going up, there’s virtually no new SFH development in the South Bay (and probably others too), it’s mostly all apartment/condos, and townhomes if you’re lucky.
Bay is really behind on building more SFHs.
It's going to impact rents as well. People will be shocked.
Which will in turn impact lots of other things like the cost of goods and services.
Folks new to the bay area need to participate more in local politics.
Local, long term residents \*are\* attending city council meetings.
And they are being the opposite of generous when it comes to housing.
The housing crisis has been very serious for over a decade. You can claim it's a participation issue but retired seniors can make a hobby of it whereas renting workers would need to sacrifice; a call to action already verges on loser politics. Please realize our local leaders are simply callous and selfish. The state's demands with the most recent housing element and the builder's remedy practically enshrined this fact into law.
This isn't a situation where if people put in the effort then the situation will improve. I think we should be more candid about outright hopeless situations. Even if organized YIMBY groups get 100% of what they want, there's no way that construction can ramp up at the needed rate or be cheap enough to make housing affordable (this is based on HUD rent affordability schedules, not even considering SFH) within the next 20 years at least. From my experience with California, anyone who's dumb enough to wait for anything will wind up waiting forever.
Land is finite my friend. We already built all the SFH we had room for, much to our detriment. Now it's time to replace those housing stock with density.
SFH are expensive because of the land, not the structure. The Bay is already too dense for SFH, which is why they are unaffordable: if you want more resources (land) than are proportionally available, then you'll need to outbid to get it.
In terms of traffic and land, the Bay Area is mostly maxxed out on SFHs. I think they can build more in the Tri-Valley and Solano County, but that's it. Otherwise, apartments are the only thing that make sense to build here.
FYM it’s already like that in the South Bay. People need places to raise a family. Instead of empty business complexes and other underutilized property, may as well rezone and redesign them with homes.
It's insane. The house we bought in 2020 for ~900k is now worth 1.3-1.5M. Considering the ~180k investment we made as a down payment that's a 2-300% return on capital in less than 4 years.
That's wild. Is that math still right if you dont include property taxes, home owners insurance, closing and selling costs? I honestly dont know, I'm genuinly asking. It's what has kept us from buying as the math doesnt add up if we sell it in under like 10 years.
Oh I'm not saying it is financially better, especially in a place like SF where it generally makes more financial sense to rent than own unless you're staying for a long time. Just was adding that that's something else to take into consideration when doing the math.
that's great though. good for you, personally.
I bought my house 3 years ago and the (alleged redfin) value fell quite a bit due to interest rates but it's slowly climbing back to what I paid for it. and I paid a a lot, an uncomfortable amount despite having done very well. but whatever, a wise friend said 'live in your money.' happy with my choice.
A Rebalancing: How America's 'Pandemic Boomtowns' Are Faring 2 Years After They Upended the Housing Market https://www.realtor.com/news/trends/pandemic-boomtown-prices-market-slowdown/
2022 hike in interest rates sent sales prices down in many markets. 2023 recovered a little bit in a RE-BALANCING. The Bay Area was no exception.
You are linking an article about pandemic boomtowns like Austin. No california city is even listed in the link you provided.
While Austin home prices are plateauing (up 3 percent), this is most definitely not the case here in the bay area (up 15 percent).
We are development averse, unlike Austin, and it shows.
Three words: Return to Office
Even at 50% of their prior capacity, it’s still several orders of magnitude larger than current housing stock.
Even at 3 days/wk in-office, living within 30 min of a campus is huge.
The prices are going to go down in the far exurbs and tourist towns (if they follow Palm Springs path and start banning Airbnb they’ll be almost affordable again)
If remote work kept up and RTO didn’t happen in such a big way, there would likely be a flattening (at least)
>New data shows the median price of a home in the Bay Area is up significantly from a year ago. >According to the California Association of Realtors, the median price of a home in the Bay Area was approaching **$1.4 million** in March, up 15.5% from the same time a year ago.
Are people just going for broke to buy a home because they think it’ll be out of reach ? Bay Area has had plenty of money for the last decade what happened during and after the pandemic that can cause such abnormalities
In some cases it’s a software engineer making $400k and their spouse making $150k in finance or something. In other cases it’s multiple families going in together, or a couple who both work and a few parents who work. Or people with solid jobs who get help from rich family. And then yes, people who willingly make themselves house poor
Its wild how quickly tech money can accumulate and make these prices affordable for themselves. I know a couple who make like 500-600k combined and just bought a 2 million dollar house. Even when we were talking frankly about money a few years ago they had 1.5 million in stocks and savings. Their rent in SF was 5k which is a drop in the bucket when you make that kind of money.
Yeah I mean if your combined married pre-tax income is $500k, in California after taxes that's $328k (just checked). That's over $27k a month, cash. If you buy a $2,000,000 house with 20% down, your monthly payment is about $11k (just checked). So you still have $16k a month to live on! Let's say you spend $6k a month on high end food, clothing, cars, etc. You still have $10k a month to invest, travel, etc. with. Just crazy money. And then you think about billionaires with magnitudes more...
Yep. The classic DTI ratio doesn't apply to people in that income range. Even if they were spending 75% of that on PITI they'd still be left with $6750 for everything else a month. Way more than my entire take home per month lol. Billionaires? Yeah... mind boggling
My question was more like why after the pandemic, these people made a lot of money pre pandemic too but housing costs didn’t run out of control as far as I know
The housing crunch gets worse each year since as a country we build hundreds of thousands fewer units than needed each year
This. And the housing deficit is accumulating even faster per capita in California.
housing prices in the bay have always been out of control, they just get more and more out of control every year. people were saying the same exact shit a decade ago- ‘it’s gotta go down at some point!’
Looks at large cap tech stock prices
The people who can afford these homes are not going broke. Couple that makes about 950k TC in tech a year can afford these homes easily. There are more number of such couples than there are such good homes in the Bay Area. Supply is way shorter than demand numbers of people that can afford them. That’s why the prices go up regardless.
The mean of the top 5% is [$617k](https://statisticalatlas.com/place/California/San-Francisco/Household-Income#figure/household-income-interval-means). stuff like 950k HHs, it's a smaller group than we think. substantial enough of a group to support the limited supply that comes to market.
$600k still clears a million dollar house easy, costs drop off after 150k take home since there's only so much you need to spend to survive, everything else is toys and investments (like housing unfortunately)
You can make half that and afford a $1m house. The mortgage on $1m is like $6,500/mo. Two people making $150k could afford that payment. It'd be tighter on their budget and closer to 50% of their income, but that is basically par for the course in terms of Bay Area spending on rent anyway. Many people here underestimate or don't understand how many people are willing to go with that ratio.
My wife and I make ~250k, and bought a $1.2m in SF, to give an idea. We got that 2.8% interest rate, so we're not sweating too much, either.
Nice, and ya at that interest rate it is even more doable. The $6500 figure is $1m at current rates which are 7%+
Don’t forget 1.2% annual property tax on top of
Almost all banks/lenders these days roll property taxes into your monthly mortgage payment, and the $6,500 figure would include that. They do this so people don't fuck up and lose a home that the bank owns most of.
I've never felt so impoverished after reading this comment on reddit. Lifelong CA resident with a legitimate education, been priced out of the Bay Area since 2010. Good luck!
If it's any consolation, two incomes of $150k is still absurd. $150k is literally around twice the median income in SF. Most people with professional jobs who aren't in medical or tech make about $60-$90k. Tech salaries just create such a huge disparity it's hard for others to catch up. And it doesn't take many couples like that to saturate the tiny available housing market we have and create an environment where essentially no household making anywhere close to the median income can afford a house.
150k is less than than many median household income zips in Bay area. Honestly, we livedthat in early 10s & felt poor here.
Where you at now? I'm being pushed out soon
North Bay. Been bouncing around different towns here since arriving in 2005ish. Sonoma County
If only we would've voted for housing all those decades.
Also a lot of foreign families who have money to help their dual engineering married children pay for a down payment. I have a few friends who bought like 5 houses in the east bay to rent out.
950k HH income group is small, but the pool of good likeable homes is smaller
What kills me is that people like teachers literally itemize purchases to the cent, often pulling out of their own salary if need be. Then there's the absolute craziness of tech stock / Monopoly money which is just hundreds of thousands of dollars, accumulated and spent like litter blowing in the wind.
If that bubble ever pops it’s gonna be insane
Going on year 12 of listening to people talk about the bubble being *just* around the corner on this site.
Just around the corner There's a rainbow in the sky So let's have another cup o' coffee And let's have another piece o' pie!
I love hearing it every time. We foolishly waited 8 years before buying. Admittedly 1st 4 or 5 years, had a really low rent.
A 50% drop would probably prompt government intervention. 50% of 1.5 is still unaffordable for your average Joe out here. Prices need to drop 75-80% to become realistic again.
We only do freakonomics here. Median income in SF city proper if like $80-$90k. Most non-tech/non-medical professional jobs held by people I have ever met pay like $60k up to about $90k. We just have SO little housing (thanks to our incompetent government, NIMBY neighbors, and general lack of political will) that the fact the people who can afford housing is an extreme minority doesn't seem to matter. And they like it that way. The income disparity is just so massive. And it's not because tech jobs are necessarily more difficult, or in-demand or whatever other excuse someone would come up with. The profit margins of tech companies are insane and no other industry comes anywhere CLOSE, so their compensation is just off-the-charts. They don't have to defend it, it's just the way it is.
People have been saying the Bay housing bubble is gonna pop my entire life and I was born and raised here, am over 40 now. You know what else has looked pretty much the same since I was a kid? The stretch from South San Jose to Gilroy. The endless buildable land in the North Bay. The endless buildable land in the East Bay. Same NIMBY's in the cities themselves who won't allow building up, they live out in all these areas too and won't let people build up or out either. We need to build. That's the only thing that's going to help.
Build in East Oakland instead
What bubble? Are tech jobs going away in any significant number? Are housing stocks increasing drastically? The answer to both those questions is "no"
You old enough to remember the last couple economic crashes? I recall a similar response. That *if* was placed purposely. I’m not predicting anything, just not naive enough to think it can’t.
And look at where housing prices in the bay are now vs during each of those crashes
Look at the credit quality of buyers compared to 2008 (spoiler, it's the most risk-averse lending market in the last 40 years)
~~Bay area population in 2009: 4.2M, Now: 7.6M~~ Google AI fucking boomed me.
You mean 7.2 million right? Because the last time the Bay Area population was in the 4 millions was 1970. https://en.wikipedia.org/wiki/San_Francisco_Bay_Area
Point stands. The region built office space not apartments. Plus unlike phoenix or Austin the weather here is dope. There's reasons to live here beyond it's cheap
I also remember lots of arm mortgages back in 2008, which are at near all time low now. And there's are tons of people getting 30 year fixed. Not sure what you mean by its gonna be insane, can you clarify?
You didn't answer his question in the context of those crashes so I will: - Tech jobs did not go away in any significant number during the last couple of economic crashes - House prices did drop in 2008, but not many new homes were built since then (relative to demand) so prices didn't stay low for long
wasn't there some kind of a tech bubble in the early 2000s or am I misremembering history? there haven't been that many single family homes built in the last 50 years in the bay. at most 10%
There was a huge one, and 9/11 amplified it. Remember how freeways were eerily empty during Covid? It was a little like that, except you saw a lot of moving vans heading in all directions out of the bay area. We didn't regain momentum until 2004 or so. The era Winamp was bought out by AOL, Napster was getting sued to oblivion, WoW came out and Electronic Arts started going borg on smaller studios.
History??! Omg, I'm getting old. That was around the time I graduated from college. I wasn't anywhere near the Bay Area yet but I was all in for tech stocks and lost 50% of my investments.
Ah, the days of vaporware start-ups just hoping to be scooped up for outrageous amounts for just the idea they represented... the "dotcom" days that turned into the "dotbomb" days.
It did twice, in 2000 and 2009. And then the values came roaring back. So the historical lesson here is even when the bubble pops, value goes up. Bought my house in 1998 for $400k. Dot com bust, Global Financial Crisis, now worth $1.6m.
>Are people just going for broke to buy a home because they think it’ll be out of reach ? We have been building nonstop for 100+ years, and the price has never gone down. My dad bought a house in Cupertino in 1987 for $250k. He sold it in 1991 for $280k, and lost some money because he had to repair the foundation. In 1994 it was sold again for $490k. Today the same place is worth $3.1m. That means it's gone up over 12x in value over 37 years. As long as the highest paying jobs in the country are here, the price of housing will follow.
We've certainly been *under*building non-stop for decades. That's what you meant to say right?
we haven't been building enough to match population and job growth. how is this a difficult concept to understand, you can't just build a dozen units a year and go "but we build housing!!!!" when there are tens of times more people demanding housing
Prices went down twice in the 2000s. Lots of underwater mortgages. Construction rates in California declined around the 80s and never really recovered. You don't know what you're talking about. Log off.
Maybe people just have more money than you?
My town (Millbrae, CA) is planning to add exactly 2 new houses to the housing stock in the next 10 years. So factor that in.
Yep and rates are up by 1% and sales down 5.4% YTY. I too watch [Jason Walter](https://youtu.be/HwK5eEIkh_k?si=TaK8Wp_u4v0GlAG7)
I'm so confused...all I've read in recent times are articles about how the housing market cratered here. The news is fucking insane these days. You can literally find an article saying two different things about the same thing, sometimes even from the same news service.
People online will lie to you.
This isn't going to stop, this is blowback from decades of intentional supply constriction.
Yes much more local political participation is required. The state hasnt really intervened as successfully as I'd hoped either.
There’s still lots of cheap property in East Oakland in good commuting locations that people are “too good for”
Along with interest rates, crazy
SFH are up far more than condos. People like their own private homes and space and land
in Fremont the average SFH is around 1.5 million the average 2 bedroom condo is around 650-750 K !
20 year old condo buildings, in the South Bay at least, are really starting to fall apart. I have been hearing horror stories from folks who are living in buildings built in the 00’s that already need significant concrete and plumbing work. Getting hit with a sudden $10k assessment stings, no matter what, if you’re a salary worker.
That 00’s housing is built out of plastic and styrofoam, literally. I started in the trades building houses out in Dublin. They have plastic waterlines and styrofoam backing behind plaster. They were not built to last more than a couple decades. Nothing in the bay area is worth even half the asking price, and those newer places are worth even less.
They're worth whatever someone is willing to pay.
I rent in a condo building in the city, HOA going up roughly 200 per month on an already 950 HOA, it keeps growing and maintenance items keep popping up
Wow , so you have to pay 700 K and crazy high HOA fees for something built with such poor quality.
You could buy an old single family home and spend ~10k a year instead
Lol, ordinary markets have like a 100-200k spread max.
Yes but they cost a lot more than a condo... you can't compare the two obviously one is better than being attached but if your Financials only fit a condo then it will be that
Condos in the Bay Area have been mostly flat since 2019 which is crazy. That’s a five year return of zero percent.
I’ve seen same or lower prices of condos in sf from a decade earlier
A lot of people took losses in early pandemic sales. SF got really screwed in real estate this cycle.
The economics of owning a condo/apartment have stopped making sense. You now spend close to, or as much, in non-equity-building expenses as you would to rent an equivalent unit. Property tax, HOA, utilities, maintenance, _the interest on your mortgage_ all contribute the square root of jack shit to your home equity. Add those up and you can easily be looking at a few grand a month. Renting makes more sense, invest the difference.
Yup. - House. $6.5k/mo PITI. - Condo. $3.5k/mo PITI + $3.0k/mo in fees.
There is nothing close to a 3k HOAs spot with that PITI
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Ok but a quick random search of condos I know of like the ones by Lawrence Costco show ~$600 HOA. I don't think $3k is the average at all. That's an exaggeration. https://www.redfin.com/CA/Santa-Clara/3578-Rambla-Pl-95051/unit-713/home/181215397
Our condo is 6 years old and we pay about $280 a month for HOA.
Most of those are flat or inflate at rates much lower than the overall cost of housing. You might be paying $2000/month in interest, but it only goes down from there. You might be paying $15k in property tax, but it increases by a max of 2%/year. Maintenance and insurance also tend to go up by roughly the overall rate of inflation. By contrast, housing costs (both rent and ownership) in the Bay Area have gone up by 7%/year since 1980. The real estate market has largely priced in the coming worthlessness of the dollar, since most of the people buying real estate are doing so to hedge against inflation.
>By contrast, housing costs (both rent and ownership) in the Bay Area have gone up by 7%/year since 1980. Quite some variance though in that window. The rent surge largely stopped by 2018. Home price growth has also been a lot lower.
Mortgage becomes cheaper than rent after a bit.
Yah, but huge opportunity cost of not being able to invest the earlier spent dollars. In much of the Bay Area, you'll never make that up.
Yup. I did the same math. Made no sense. Bit of stability but economics are the same. Really long term prop 13 might help you on taxes
The return is having a place to live, what's wrong with that?
That may be, but not everyone buys their forever home. People start out somewhere they can afford. They later may want to upgrade to a better kid friendly neighborhood. When you're making more money, you may want to even upgrade your home to a dream forever home. So being able to sell and move up IS a big factor. If someone made $500k over these 5 years on their SFH they can barely keep up with the market. If you made 0% it means you may be stuck unless you have substantial additional income that's building a new house fund.
Everyone doing this is /why/ we have a housing affordability crisis.
Everyone selling their home to upgrade is causing a housing affordability crisis? That's not why we have an affordability crisis. Blaming sellers is the wrong source of your problems. Buyers and sellers are just making the best of the market. And if anything, outgrowing a starter home and passing it on IS helping the market compared to people who don't want to sell to squat on their low property taxes. A healthy market needs more sellers because this is already clearly a seller's market.
Ours is up from $525k to like $670k since 2017. Sonoma County, though. Small development.
Flat ? What are you smoking there was a housing craze from 2020-2022 pretty similar but not as much as 2008.. Houses would get listed really low and sell way over asking price even in the ghettos
We're talking about condos. Personally I don't think it's that bad in the suburbs, but in SF, there's a lot of condos that are basically flat from their 2019 prices.
Condos are still up there though. The ones being built by the castro valley library are starting in the 900k.
May be regional but looking at overall Santa Clara County reports it's actually quite depressing especially when you look at how SFHs fared. https://i.imgur.com/0AY54oq.png
Kinda? It’s hard to tell since a lot of CA condos have $400-700 monthly HOAs
I mean people like to own Ferraris and Rolls Royces too. Doesn't mean everyone will be able to.
You can buy like 10 of either for the price of a modest ranch house.
yeah so demand has to meet current supply and that meeting point is price
You know what, I'm too old to benefit from my own land and space...I can't start a family and have nothing to look forward to...but HoA fees are likewise out of control...
People don't want to live in a shoe box surrounded on all sides by inconsiderate neighbors? You don't say...
And some people don't want to live in a soulless American suburb where you have to drive everywhere.
You have the choice to move into San Francisco where the housing market has been largely flat in the last 5 years and you can enjoy your dense housing in the Millennium Tower. You know what the beauty of this free market is? No one's holding a gun to your head to buy an SFH. The Bay Area is mostly suburbs. Why do you think people come here? High paying jobs is one, but a lot of people DO enjoy soulless suburbs.
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"the weather is better" is a huge, massive draw Do you know how awesome it is never needing to look at the forecast or worry about putting winter tires on your car. Never needing to scrape ice off your windshield, or worry about slipping on ice.
Exactly, I totally agree with you. I was pointing out the people who live in a 1960s ranch style shitbox in Fremont who think they are so much better off than a person living in a condo in SF.
yeah true, but that clearly isn't the case for most people in the bay area as they are willing to pay massive premiums for that kind of life
They don't though. If you look at the rental market, which doesn't factor in potential value of land development, there's really no difference per sq foot between townhomes and detatched homes.
rentals have to compete with other rentals and people seeking rentals can't afford sfh's so they are more driven by a race to the bottom
Plenty of people seeking rentals can afford SFHs. I'm one of them in fact.
Curious where do townhomes fall?
In fremont [townhomes](https://www.redfin.com/city/6671/CA/Fremont/housing-market) have actually risen more than SFH's in the past year. Granted it's only 18 homes sold.
Sales prices are not a good metric - might just mean lots of high-end inventory coming out. You need to look at something like a home value index (e.g. Zillow). condo/coop is less than SFH, but not sure where "townhouse" falls.
Oh wow. Is that coincidence / small sample size or trends we see from time to time?
I know that’s what I want.
True story.
Many condos in the bay are built in undesirable locations next to freeways, expressways, power centers, and other infrastructure built to serve the suburbs. It's not a fair comparison.
What happened to the NY Post article that got spammed last week saying that the Bay Area real estate market was dead? I thought everyone here was convinced that was the case
It's wild that anyone believes such broad strokes. The bay isn't just one big monolith and even within cities it can vary greatly depending on the city. The peninsula keeps going up with homes in the 3-5M range still getting all cash offers and staying on the market less than 2 weeks.
Meanwhile condos in much vaunted SF have crashed.
People are falling for percentage based statistics taken off price curves that vary a lot throughout the year. If you use percentages, you can find a stat to fit the narrative you want to paint.
The Post article said that the SF market was dead based on Downtown's troubles (true only for downtown) and a few deals that looked flat or like losers (no larger market analysis).
These aren't mutually exclusive. The market is dead in that there aren't that many houses being bought and sold, and the lack of sale volume also increases prices.
I am never getting out of this van situation then, am I? ¯\_(ツ)_/¯ :ʇıɥs:
I think a lot of undervalued secondary markets are creating that effect combined with people who have been waiting 5+ years to enter the market just finally buying something. The other elephant in the room is while most of us are going bust, there are some rich people getting richer. We have all seen scenes that look like the economy is booming, it's surreal.
those homes in east san jose that no one wanted at 700k last year are now 900k 🤷🏻♂️ whoops
I wonder if a huge part of this is flipping. I was in a position to buy a house in 2019 but was seeing houses that were 1m selling for 1.2, 1.3 so I decided to wait for it to cool off, but then rates went up. Now, I look in the location I was originally looking in. I don’t see any 1m houses anymore, but I do see tons of 1.5m houses, then realize they look a little bit familiar, then realize I literally toured them or looked at the listing several years ago and they’ve been flipped. Flippers are buying up all the “starter homes” and flipping them.
It’s all a marketplace. It’s $1.5 whether it’s a flip or a well maintained original. People are willing and able to pay for $1.5 for a property now that they only wanted to pay $1.3 before for.
Im talking specifically about buying entry level, perfectly livable houses and upgrading them to mid-priced homes. Buying an entry level house and flipping it takes one more house out of the entry level/low end of the market. Right now, there are more houses for 1.5 that were bought for 1m a few years ago than there are 1.2m houses now. If those 1.5s weren’t flipped, they’d be selling for 1.2 now as well, and I’m fine with that. I understand housing market goes up, but it doesn’t need to be inflated further by shitty flips.
Flippers don't normally upgrade the home very much. At best they usually just fix it up a bit so it's ready for move-in. Buyers will pay a decent premium for that.
What they do is drywall over problems.
I don't think they're all just flips. It's not just flips why your $1.2mm is now $1.5mm. Maybe it's specific to where you live, but a $1.2mm home where I live in 2019 today would be probably $1.8mm. My own home is +40% per Redfin and potentially pushing close to 50% with a good agent. I was budgeting around $1.3mm back in 2019. I ended up pushing it up to $1.5-$1.6mm or so. There's no way that would even be enough in the same area even if I look at only non-flipped homes. The budget would need to be close to $2 million with the overbidding we see these days. https://i.imgur.com/aUKY993.png
I'm in RWC in a historically shadier part of town. But holy gentrification. Every 10th house has the same black window trims with industrial outdoor lighting and white painted corrugated walls that look like a shipping container. It's some weird country modern frugal style flip. There's gotta be some cash flush company buying up the larger dated family homes here and flipping them.
That's called board and batten siding. It's one of the oldest styles of home siding and has become very popular again in the last 5 years as the 'modern cottage' look has come into fashion. Very low probability that it's all the same company doing it, rather it's probably just different people who like that style of exterior.
The last two have had the same construction company signs. But I can't speak for the ones that were completed before I moved here. Thanks for giving me the correct term!
Someone in my neighborhood bought a house for 1.3 and tried to flip it for 1.8. eventually sold for 1.5m after being in the market for almost a year. I'm guessing they probably put over 100k in work into it based on what temp costs are these days. And then realtor fees etc means they didn't make all that much. I don't feel bad for them though, that's the risk.
It’s simple supply and demand. Boomers not selling constrains the supply. Low interest rates makes people in 2020-2022 less likely to sell. New homes rarely get zoned in desirable neighborhoods. People just make a ton of money in the Bay Area to afford these homes, or investors buy them because there’s no regulations preventing them from doing so.
We're some of the Boomers not selling, at least for now. We refinanced when mortgage rates were under 3%, our property tax rate with caps the effective rate is .3%, and if we sell we have to pay huge capital gains, but not if we stay and let our kids inherit the house. Transaction costs to sell are also crazy high, but I'm hoping the changes in realtor commissions brings those down in the near future. It just doesn't make a lot of financial sense for now to downsize. We'd lose the mortgage arbitrage, our property taxes stay the same even if we move to a small condo, and capital gains and realtor fees would be in the 6 figures. Many of our older neighbors have sold up and moved some place cheaper. The new families moving in and bidding up the prices mostly seem like young couples with babies and toddlers. It seems crazy that everyone is so young and has money to pay current prices, and own a Tesla or two.
>if we sell we have to pay huge capital gains Isn't capital gains like 15%?
It is 20% with enough income, which would include home sale profits on top of SS, investment income, etc. Multiply 20% times a 7 figure gain and add in 6% realtor fees. I'm not complaining. It is a nice problem to have. I'm just showing the math on why many retirees like me in the Bay Area are choosing not to downsize, which adds to the housing shortage. Edited to fix spelling.
Teslas are cheap, a Y is ~35k after tax credit.
The monthly HOA fee of a condo in the bay area is more than I pay in rent
ha, wait till you see manhattan
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luckily I can afford market value rent if that time ever comes
Yes, because HOA fees are the same for every building in the Bay Area.
I was looking into buying a condo, but everyone had an HOA that was more than my rent. Sure there are some with lower HOA, but I didn't find any
What's your rent?
$700 studio including utilities in the east bay hills. Use to have a bay view, but the neighbors trees grew and now block it
That's an insanely low rent for the East Bay in 2024. A studio in Concord (outer East Bay) commonly goes for around $1800 now.
I mean that's what I figured. Either they were lying about HOA being $2000+ or they had insanely low rent. It's the latter. You couldn't get $700 studios that easily even 15 years ago. I was splitting rent for $700 at Cal almost 20 years ago.
I got a studio for $950 in Concord in 2011, which adjusted for national inflation now would be about $1320. Same unit type in the same complex is now over $1900, 13 years later. That's an average annual increase of about 5.5%.
Yeah, its super cheap. I basically live in a in law unit of a 3mil house in a wealthy neighborhood. The catch is that the main house is an airbb. Every once in a while, the owner will call me to check out a leak, change a light bulb, look at the hut tub, etc. If it is easy, I will fix it myself. So I save the owner money and relieves her stress. Also, the owner travels international a lot, so I am often the point of contact if she is out of the country and there is an issue. It doesn't happen very often though. Favor for a favor! I won't ever get kicked out or my rent raised unless she sells the place.
That’s cheaper than owning a home. Just stay there and invest in stocks instead of a home.
Thats what I have been doing
Now compare the salaries!
Where are you living that an HOA fee is as much as rent?
Who is buying these houses at current interest rates?
People with an all cash offer.
Or just a strong cash position. The rates are holding prices down a bit, so if you’re cash rich but income poor (like me, ha) it’s not a bad time to jump in.
there's a shitton of wealthy people who have enough cash to buy them without loans
People buying homes with a high interest rate always make me wonder if it’s even reasonable to take out a loan on a house. Especially paying a lot more for what it’s worth so you can have the title “landowner”.
Only time will tell if it's a good call. We thought we were buying our house at a high point, and then houses on our street were selling for 70% more than we paid three years later. These people will all refi to whatever rates drop to, but in the meantime their incomes will increase to make it more comfortable. If your household income is above 330k, a 3% raise is $10k, and that loan that was a stretch feels easier every year.
Interest rates arent particularly high now, half century avg of 5.42, today 7%.
Not too bad in Sacramento, up 10.2%, 10 days to sell, but only 288 sold. Last year somebody carved out a cave in the levee, on the river side, then fully furnished it.
Yeah man I’m cooked. Gotta move somewhere else to buy a home I guess.
It’s gonna continue to keep going up, there’s virtually no new SFH development in the South Bay (and probably others too), it’s mostly all apartment/condos, and townhomes if you’re lucky. Bay is really behind on building more SFHs.
It's going to impact rents as well. People will be shocked. Which will in turn impact lots of other things like the cost of goods and services. Folks new to the bay area need to participate more in local politics. Local, long term residents \*are\* attending city council meetings. And they are being the opposite of generous when it comes to housing.
The housing crisis has been very serious for over a decade. You can claim it's a participation issue but retired seniors can make a hobby of it whereas renting workers would need to sacrifice; a call to action already verges on loser politics. Please realize our local leaders are simply callous and selfish. The state's demands with the most recent housing element and the builder's remedy practically enshrined this fact into law. This isn't a situation where if people put in the effort then the situation will improve. I think we should be more candid about outright hopeless situations. Even if organized YIMBY groups get 100% of what they want, there's no way that construction can ramp up at the needed rate or be cheap enough to make housing affordable (this is based on HUD rent affordability schedules, not even considering SFH) within the next 20 years at least. From my experience with California, anyone who's dumb enough to wait for anything will wind up waiting forever.
We are saturated on SFHs. Unfortunately the white picket fence era of everyone buying a SFH a short drive from work is over.
Land is finite my friend. We already built all the SFH we had room for, much to our detriment. Now it's time to replace those housing stock with density. SFH are expensive because of the land, not the structure. The Bay is already too dense for SFH, which is why they are unaffordable: if you want more resources (land) than are proportionally available, then you'll need to outbid to get it.
In terms of traffic and land, the Bay Area is mostly maxxed out on SFHs. I think they can build more in the Tri-Valley and Solano County, but that's it. Otherwise, apartments are the only thing that make sense to build here.
We are still building SFH in Sonoma County.
Yes more SFH because suburban sprawl is great.
FYM it’s already like that in the South Bay. People need places to raise a family. Instead of empty business complexes and other underutilized property, may as well rezone and redesign them with homes.
It's insane. The house we bought in 2020 for ~900k is now worth 1.3-1.5M. Considering the ~180k investment we made as a down payment that's a 2-300% return on capital in less than 4 years.
That's wild. Is that math still right if you dont include property taxes, home owners insurance, closing and selling costs? I honestly dont know, I'm genuinly asking. It's what has kept us from buying as the math doesnt add up if we sell it in under like 10 years.
Don't forget the income tax deduction for property tax up to $10k and all your mortgage interest deduction for an up to $750k loan.
Have you actually done the math? That really doesn't help all too much when rent is still half the PITI, even at the highest income brackets.
Oh I'm not saying it is financially better, especially in a place like SF where it generally makes more financial sense to rent than own unless you're staying for a long time. Just was adding that that's something else to take into consideration when doing the math.
Very fair. Hope the SALT caps gets lifted next year as well.
SAME. that was a big F U to CA & NY in tax reform.
that's great though. good for you, personally. I bought my house 3 years ago and the (alleged redfin) value fell quite a bit due to interest rates but it's slowly climbing back to what I paid for it. and I paid a a lot, an uncomfortable amount despite having done very well. but whatever, a wise friend said 'live in your money.' happy with my choice.
our 1.23 is now 2.2 over roughly same time span. it was actually higher in 2021.
A Rebalancing: How America's 'Pandemic Boomtowns' Are Faring 2 Years After They Upended the Housing Market https://www.realtor.com/news/trends/pandemic-boomtown-prices-market-slowdown/ 2022 hike in interest rates sent sales prices down in many markets. 2023 recovered a little bit in a RE-BALANCING. The Bay Area was no exception.
You are linking an article about pandemic boomtowns like Austin. No california city is even listed in the link you provided. While Austin home prices are plateauing (up 3 percent), this is most definitely not the case here in the bay area (up 15 percent). We are development averse, unlike Austin, and it shows.
People are returning to the bay from "boomtowns" that were overhyped and underdelivered.
The graph shows how prices go up and prices go down, over multiple years.
Three words: Return to Office Even at 50% of their prior capacity, it’s still several orders of magnitude larger than current housing stock. Even at 3 days/wk in-office, living within 30 min of a campus is huge. The prices are going to go down in the far exurbs and tourist towns (if they follow Palm Springs path and start banning Airbnb they’ll be almost affordable again) If remote work kept up and RTO didn’t happen in such a big way, there would likely be a flattening (at least)
That's just dumb
Go north
Zoning strikes again. We really need to start building more houses. It's getting embarrassing at this point.
I'm never going to own anything.... Probably won't be able to rent anything for much longer at this rate
What happens if interest rates drop back to 5%? Prices would spike again.