Advice needed from folks living or familiar with the San Francisco Bay Area

[bornInFlorida]

I am currently renting a home in the Bay Area (paying about $2,100/month in East Bay). The rent is pretty good because I am renting from family. The situation won't continue past a few more months, thereupon which my rent may go up to 3,500 per month or more.

I have been wanting to purchase a home in the area but a single family home in a good neighborhood with good schools could easily be north of $1 million. Another option, I've been contemplating is moving to Sacramento due to the relatively lower cost of homes. My employer is in the bay area but I have the flexibility to work remotely and come to the office only one day a week. My wife works in accounting/corporate finance and should be able to find employment in Sacramento also (cross industry skills).

Given the above, the questions I have are:
Is it worth relocating to Sacramento given that homes are half the price for what I would pay in the Bay Area?
Best cities in Sacramento with good schools (Roseville, Folsom any other I should I look at?)

Any advice or suggestions would be appreciated.

[Goldielocks]

Friends who lost jobs in Sacramento in 2008 had a hard time getting re-employed.   I think that is the largest drawback - employment for you or your wife now and future, so can you do this and live on only one income?  Also, the 90 to 120 minute commute, even if once a week may turn into every day if you job changes and you can't get something else closer to home..

[Irateplatypus]

For my partner and I the decision to live in the prohibitively expensive bay area came down to the fact of what are margins would be.

post tax - living expenses = margin

In the bay, the margin was significantly more than elsewhere, but we're both in niches of tech. If your margin is the same in Sacramento as it would be in the East Bay, I would consider moving. Especially if you're not attached to the bay.

Worst case if employment in Sacramento gets rough you could move back to the immediate bay area and potentially find employment here. But buying a house could hinder that decision.

My partner and I rent because.

1. A entry level house with anything regarding a sane commute is $1.2 - $1.5 million. Whereas you can rent a two bedroom from $2800 - $3500.
2. Increased mobility to follow the winds of the job market.
3. Less stress in case our employment situation changes.
4. No maintenance.

But if you're looking to buy property it's much much easier to do that in Sacramento. There are some towns in the east bay where you can find small nice-ish single family homes from $500 - $750k with good schools too. Here's an example https://www.zillow.com/homedetails/19269-Stanton-Ave-Castro-Valley-CA-94546/24905519_zpid/?fullpage=true

[jamesbond007]

Did you consider moving to Mountain View? Mountain View is rent controlled as of last November (The bill was passed by voters). Might be a good option and schools are decent too. Have you looked at Fremont? Not sure how "big" of a house you are looking at but a decent town home with good schools can be found. Rents for a 2BHK in Fremont is around $2600 in the Parkmont area (Great schools). Walking distance to BART. Just FYI.

[trollwithamustache]

what are your actual housing needs? Ain't no way around a million for a decent house in a city with decent schools.  You need the house you gotta clear out. There are cheaper apartment if what you want to do is the stuff you can do in the inner bay area, like eat out a lot.

[Another Reader]

I would not buy in Sacramento or the Central Valley.  When the Bay Area housing market sneezes, those markets catch pneumonia.  Same with employment.

Better to rent in the Bay Area in a decent school district.  Save your pennies and wait for the market to turn.

[sobezen]

Since you have telecommunity flexibility use it.  As for rental ideas it really depends on your 'actual' needs.  What are your essential needs?  Examples include:
- Reliable public transportation?  Focus on the Penninsula, SF to Sunnyvale.
- Living space?  Focus on renting a single family home in the South Bay like SJ, Milipitas, and Fremont.
- School district?  Are you already trying to start a family?  Even so, no need to buy a home.  Check the local API reports for cities that meet your needs and cross reference it against 'comps' in your desired cities.
- Career opportunities?  Do you intend to remain with your current employer?  If not consider a lateral move to an employer in a larger city with better benefits and more flexibility.
- Community/entertainment?  How important is walkability to resources to you?  Do you care about parks, oceans, other cultural activities?  The larger cities like SF and SJ have the most.
- Conveniences?  How far are you willing to drive to buy groceries?  Do you prefer to walk or bike to get things?  Or are you ok with driving 20 minutes each way just to do one errand?  Suburbs often requires more driving compared to living in SF or a city like Mountain View.

Sacramento is developing however, the API scores are not great and employers are not as high compared to other cities along the Peninsula.  Also single family homes in Sacramento do not appreciate in value as quickly compared to those located along the Peninsula or up North.  That said, you do not need to move to Sacramento or places like Tracey or Modesto, just to find reasonable housing that meets your needs.  If you are open to it, expand your housing search to include the East Bay and not limit yourself to the Peninsula which remains much higher in demand. 

OP given the facts you've shared, I strongly suggest you consider renting for now.  The Bay Area real estate market remains hotter than nationally but inventory remains low.  With this in mind, if you can wait to buy for the correction, wait and keep on saving.  If you absolutely are set to buy reconsider a single family home and opt for a condo in an area that meets more of your needs.  Feel free to PM with more questions.

[affordablehousing]

As someone familiar with both markets and who travels frequently between the two, I have never met anyone who willingly moved to Sacramento. If you've tasted the bay area, you'll stay there. Just rent an apartment in East Oakland and get a scholarship for your kids at a fancy school. At least in my field, people value hipster proximity above all else, and are weighed down by inertia so they can't fathom driving 90 miles to Temescal just for lunch at Hog's Apothecary to retire early and save 15 years in the office.

That said, Sacramento is awesome. Houses are dirt cheap- $250K buys a decent 3 bedroom in a safe neighborhood with room to garden, build stuff and park the cars. With a $1,000 mortgage, you can send your kids to private school. The commute isn't bad, just don't schedule morning meetings or leave SF to go home before 7PM. Also, I hate to say it, but there isn't much to do in Folsom and Roseville. Sacramento has more going on.

[bornInFlorida]

Great advice and suggestions. Thank you all. Love the mustachian community :-)

[Joel]

What do you do for a living? Could you also find work in Sacramento?

We really enjoy the Sacramento area and have found that there is plenty of opportunity here (CPA and project manager). If I was you, I would at least be open to the area. You may want to try it out first and rent for a year or two before buying in case you don't like it.

[Dicey]

Sacramento is also a lot hotter than the Bay Area. We crank the A/C on once or twice a year, vs. my brother in Folsom's near daily use. Not because he's a wuss, but because it's consistently 10+ degrees hotter. Trade-off is you're much closer to skiing and such in the winter, except that also means it's colder there in the winter.

+1 for continuing to rent, whilst saving like hell so you can pounce when the market dips next. It always dips eventually.

[trashmanz]

Well you didn't specifically say your budget, but I'm sure if you are ok with off the beaten path you could probably swing living in the bay area still.

There are creative ways to get into good schools even in cheaper neighborhoods, like charter schools etc. or renting in a place for just elementary school and then moving later etc.  Just depends how much you like living in the bay area. 

Also, I could delve deeper into what you consider makes a "good" school, (what metrics are you using)? 

[bornInFlorida]

Well you didn't specifically say your budget, but I'm sure if you are ok with off the beaten path you could probably swing living in the bay area still.

There are creative ways to get into good schools even in cheaper neighborhoods, like charter schools etc. or renting in a place for just elementary school and then moving later etc.  Just depends how much you like living in the bay area. 

Also, I could delve deeper into what you consider makes a "good" school, (what metrics are you using)?

Thank you All.

@trashmanz - the metrics for good schools I am using is based on 1-10 (10 being great school) that real estate listing sites provides which in turn is based on information from Greatschools.org. It seems like you have some deeper knowledge on what makes good schools instead of just relying on high level metrics provides by these real estate listing sites. Would love to hear more from you on this.

[wordnerd]

I grew up in Sacramento and think it's a great area. But, the commute to the Bay is insane, especially from Folsom, Roseville, etc. You're talking 3-4 hours RT without traffic. I do think it's worth looking into whether you could find a job in Sacramento if you like the area.

On schools...I believe Elk Grove schools are known to be good, in addition to the areas you mentioned. I went to a pretty decent, but not amazing school (think it's a 7 on great schools) and went to UCLA and have generally lived a productive life. I'm not sure how important it is to have a 10 vs. 7, especially when the school in question has good advanced classes.

[ysette9]

Perdoankkky is take the scores from API and Greatschools.org with a grain is salt. In my limited experience they seem to reflect the demographics of the kids going to the school and not much else. Meaning, a low score = more kids qualifying for subsidized lunches and English-language learners. Chances are that your kids will do well wherever you send them, so focus on the other things you want out of a school. We are planning on sending our kid to a nearby school that doesn't score well overall but has a mandarin immersion program we are very keen on, just as an example. That opened up life neighborhoods to us than if we had stuck with just API scores alone. Our house in our "bad" school district cost us a good $200-300k less than one mile away in a "good" district and we still live on an awesome section of the peninsula.

If you plan on staying here long term then buying usually makes sense, but if you aren't sure then renting is certainly the way to go. We rented for five years before buying in the same neighborhood because we really wanted to be sure.

[ClaycordJCA]

You might consider looking a little farther out in the East Bay. Have you looked at Pleasant Hill, Concord or Clayton?  How about Dublin or Pleasanton?  Not Sacramento prices, but still on a BART line (assuming your job is BART accessible).   

[Goldielocks]

For all my negative cautions above, I must say that Sacremento is my #1 favorite city in region, and I would love to live in an area there with older trees in the neighborhood.

[trashmanz]

Perdoankkky is take the scores from API and Greatschools.org with a grain is salt. In my limited experience they seem to reflect the demographics of the kids going to the school and not much else. Meaning, a low score = more kids qualifying for subsidized lunches and English-language learners. Chances are that your kids will do well wherever you send them, so focus on the other things you want out of a school. We are planning on sending our kid to a nearby school that doesn't score well overall but has a mandarin immersion program we are very keen on, just as an example. That opened up life neighborhoods to us than if we had stuck with just API scores alone. Our house in our "bad" school district cost us a good $200-300k less than one mile away in a "good" district and we still live on an awesome section of the peninsula.

If you plan on staying here long term then buying usually makes sense, but if you aren't sure then renting is certainly the way to go. We rented for five years before buying in the same neighborhood because we really wanted to be sure.

I second this, especially in the bay area it seems there is a common theme of homogeneous students from engineering parents with Chinese, Indian, or White backgrounds at "top" schools and a lot of kids burn out from all the pressure to test well while also not getting exposed to a broad spectrum of society.  Just take into account everything you want for your children when selecting schools.  However if Ivy Leagues is the main goal certainly one could do worse than focusing in on 10 rated school and pushing your kids to be the top of the top.