Author Topic: first world housing problem  (Read 11984 times)

zedpol

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first world housing problem
« on: May 13, 2014, 02:29:19 PM »
Hi All,  I've a question.  I live in an area that the housing is incredibly expensive.  Cheapest possible livable house around here is probably about 800k.  A very very modest house would go for about 1.2million.  We are currently renting a small 800 square foot house for 2k a month.  If we were to go out and rent this same house it would cost us about 3k.  Our family is growing and we no longer can comfortably fit in a 800 square foot 2 bedroom 1 bathroom house.  Renting a 3bedroom 2 bathroom will run us somewhere between 4 and 4.5k.  Or we can buy,  I'm leaning toward buy because my work offers the following 4 part deal which you can see below.  We would take everything but #4.   edit: Thanks for pointing out that I forgot to include my question, mea culpa The calculators still mostly fall on the side of renting but in light of the extra ~25k per year of income I'm thinking about buying to take advantage of the programs listed below.  Do you guys think that thinking is reasonable?

income: ~17k a month take home
spending: ~7k a month (rent/child/utilities/food/college fund/everything else)
Generally save about 8-10k a month not including 401k which is another 3k a month.



1) Salary supplement over 10 years of ~150k.  (taxed as w-2 income)

2) a zero interest loan for 20% of the house price or up to 200,000 dollars.  Kind of a funky loan in that they are basically buying equity in the house.  So if the house price goes 10% then I would owe them 220,000 at the end.   If the house price goes down I still owe them 200k. 

3) half of the down payment up to 100k. For each year I work they forgive 10k so at the end of the loan I would owe nothing assuming I stayed at this job.  (taxed as w-2 income)

4) fixed  Interest only loan for years 1-5,  6-20 at a readjusted non variable rate amortized over 25 years. ballon payment at year 20. 

We are in this area for the next 7-10 years for sure,  I have the possibility of a different job which pays quite a bit more but doesn't have any of the housing benefits so we would wait until we see if that materializes. 

Thanks for weighing in.

-z 
« Last Edit: May 13, 2014, 02:48:18 PM by zedpol »

SDREMNGR

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Re: first world housing problem
« Reply #1 on: May 13, 2014, 02:38:58 PM »
Uhh... not sure what the question is.  I'd say, lucky to be you, sounds like nice golden handcuffs? 

If the question is whether to rent or to buy, it sounds like your work sort of underwrites a nice little supplement to the income for buying a house, which rest of humanity doesn't get, so it's a nice deal.  I'd take it if you have the cash stash and qualifications to get the loan.

Which house you buy and whether you will make any money on it, will really be a separate deal.  Not sure if this is your first home purchase, but don't "fall in love" with a house and overpay for it.  Especially hard if you have a non-Mustachian spouse.

Thegoblinchief

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Re: first world housing problem
« Reply #2 on: May 13, 2014, 02:45:04 PM »
How big is your family? 800 sqft is plenty for my family of 5. Have you tried purging unnecessary furniture, different living space layouts, etc?

Then again, with your net cash flow you can pretty much do whatever the hell you want. So whatever.

zedpol

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Re: first world housing problem
« Reply #3 on: May 13, 2014, 02:52:14 PM »
Family is 3 of us with a 4th on the way + Dog.  Both my wife and I have to occasionally take night call which completely sucks and wakes up the rest of the family. 
-z

Thegoblinchief

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Re: first world housing problem
« Reply #4 on: May 13, 2014, 02:59:00 PM »
Family is 3 of us with a 4th on the way + Dog.  Both my wife and I have to occasionally take night call which completely sucks and wakes up the rest of the family. 
-z

Again, you can make it work in a space that small, but unlike my family, you don't have to.

I would personally still rent.

JohnGalt

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Re: first world housing problem
« Reply #5 on: May 13, 2014, 03:04:12 PM »

1) Salary supplement over 10 years of ~150k.  (taxed as w-2 income)

2) a zero interest loan for 20% of the house price or up to 200,000 dollars.  Kind of a funky loan in that they are basically buying equity in the house.  So if the house price goes 10% then I would owe them 220,000 at the end.   If the house price goes down I still owe them 200k. 

3) half of the down payment up to 100k. For each year I work they forgive 10k so at the end of the loan I would owe nothing assuming I stayed at this job.  (taxed as w-2 income)

4) fixed  Interest only loan for years 1-5,  6-20 at a readjusted non variable rate amortized over 25 years. ballon payment at year 20. 


Okay - I'll force myself to suppress the cost of housing face punching I feel like I should be doing because I'm pretty sure it won't do any good and it's not what you asked for...

My assumption based on your comments is that each option can be chosen on its own.

1) Clearly an extra $25,000/yr is good - if there are no other strings, you take this.

2) So basically - your interest rate = appreciation rate.  In theory this means that they are setting the interest rate at inflation - and generally it works out that you're better off taking the loan that matches inflation and investing in something that tends to beat inflation.  However - if you feel that appreciation will outpace whatever interest rate you could otherwise get on that portion of the loan, this is a bad deal for you.  You are taking on the risk with no shot at the gain.  If the house goes down in value, you still owe the $200,000 (albeit at 0% interest).  If the house goes up in value, you only get to receive the original $200,000.  I would probably not take this part in a market with the appreciation potential that exists in that market. 

3) Is there any interest on this if you don't stay the full 10 years?  If not, definitely take it.  If so, probably still take it depending on the rate.

4) There might be some math to do to be sure (comparing interest rates, predicting the rate 5 years out, deciding if you would stay after the initial 7-10 years you know you'll be there)- but probably wouldn't take this.  Lock in today's low rates for the long term. 

« Last Edit: May 13, 2014, 03:07:01 PM by JohnGalt »

zedpol

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Re: first world housing problem
« Reply #6 on: May 13, 2014, 05:05:24 PM »
Quote
Okay - I'll force myself to suppress the cost of housing face punching I feel like I should be doing because I'm pretty sure it won't do any good and it's not what you asked for...

I know, the housing thing makes me sad.  An entry level 3 bedroom 2 bathroom within 15 minutes of work housing starts at ~1.5-2 million,  move to 15-30 minutes and it goes to 1-1.5 million.  30-45 minutes 800-1.2.  45-60 minutes around 800.  The whole thing is just silly.

JohnGalt

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Re: first world housing problem
« Reply #7 on: May 13, 2014, 06:38:35 PM »
Quote
Okay - I'll force myself to suppress the cost of housing face punching I feel like I should be doing because I'm pretty sure it won't do any good and it's not what you asked for...

I know, the housing thing makes me sad.  An entry level 3 bedroom 2 bathroom within 15 minutes of work housing starts at ~1.5-2 million,  move to 15-30 minutes and it goes to 1-1.5 million.  30-45 minutes 800-1.2.  45-60 minutes around 800.  The whole thing is just silly.

I find it very hard to believe that there isn't a house that would work for under $1 million within a 30 minute drive radius of just about anywhere.  It might not meet the standards you're looking for - but I'd be very surprised if the option is not there to even get into the $500,000 ballpark within that 30 minute drive radius.  Justify the expense any way you want - I actually don't won't even fault you for it so long as you realize that you're making the choice to trade additional years of working for it.  If it's worth it to you - that's perfectly fine - but own up to the choice rather than trying to tell us that you have no choice. 




Chuck

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Re: first world housing problem
« Reply #8 on: May 13, 2014, 06:59:06 PM »
Where the hell do you live? I mean, I'm in the NoVa area just outside of DC... Housing here is inflated, but nothing nearly that insane. Do you live in frikken Dubai?

mm1970

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Re: first world housing problem
« Reply #9 on: May 13, 2014, 08:05:45 PM »
Where the hell do you live? I mean, I'm in the NoVa area just outside of DC... Housing here is inflated, but nothing nearly that insane. Do you live in frikken Dubai?
Could be New York or many areas of Coastal California - SF Bay area is that expensive.  I live in Santa Barbara, and a 2BR/1BA in a bad school district is over $700k.  If you want a 3BR, it's close to $900k.  If you want a house in good condition or in a half decent school district, it's over a million.

Duredhel

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Re: first world housing problem
« Reply #10 on: May 13, 2014, 10:18:29 PM »
Sounds exactly like my country.

RealCanadianSavings

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Re: first world housing problem
« Reply #11 on: May 13, 2014, 10:40:47 PM »
Vancouver's downtown is like that, so are the oil patches in Alberta.

zedpol

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Re: first world housing problem
« Reply #12 on: May 14, 2014, 09:45:22 AM »
Quote
I find it very hard to believe that there isn't a house that would work for under $1 million within a 30 minute drive radius of just about anywhere.  It might not meet the standards you're looking for - but I'd be very surprised if the option is not there to even get into the $500,000 ballpark within that 30 minute drive radius.  Justify the expense any way you want - I actually don't won't even fault you for it so long as you realize that you're making the choice to trade additional years of working for it.  If it's worth it to you - that's perfectly fine - but own up to the choice rather than trying to tell us that you have no choice.

few things: 
1) I think at 30, maybe 25 minutes from work one might be able to get something right around 1 million but i think i said that below.

2) The only option in the 600 range is east palo alto which is right about 20 minutes with an exceedingly high crime rate and poor schools.  It is improving but isn't great. http://en.wikipedia.org/wiki/East_Palo_Alto,_California

3) feel free to put in palo alto california, and do the search for yourself on zillow or some equivalent housing search.  When you see the prices just understand that houses are selling for an average of 20-30% above list price.   


mboulder

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Re: first world housing problem
« Reply #13 on: May 14, 2014, 09:56:09 AM »
3) half of the down payment up to 100k. For each year I work they forgive 10k so at the end of the loan I would owe nothing assuming I stayed at this job.  (taxed as w-2 income)

What are the rules on this? If you leave your job before the 10 years is up, is the remaining balance due immediately, like with a 401k loan?

zedpol

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Re: first world housing problem
« Reply #14 on: May 14, 2014, 10:04:06 AM »
Quote
Quote from: zedpol on May 13, 2014, 02:29:19 PM
3) half of the down payment up to 100k. For each year I work they forgive 10k so at the end of the loan I would owe nothing assuming I stayed at this job.  (taxed as w-2 income)

What are the rules on this? If you leave your job before the 10 years is up, is the remaining balance due immediately, like with a 401k loan?

Yeah, I would either have to refinance, pay them the balance, or sell the house.  When I asked they said they would "work with me"  as long as I was selling the house/refinancing they wouldn't require the money immediately.


NumberCruncher

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Re: first world housing problem
« Reply #15 on: May 14, 2014, 11:41:43 AM »
Sounds exactly like my country.

Yeah, my first thought was "Singapore?" I think it currently ranks as most expensive place to live in the world according to the first results on google. Only thing crazier than the housing prices are the car costs. Hats off to anyone who can be mustachian there. I read this article about Singapore's housing a while ago, warning of a bubble: http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/ and the followup after some criticisms: http://www.forbes.com/sites/jessecolombo/2014/01/16/its-not-a-bubble-until-its-officially-denied-singapore-edition/

To the OP, if you definitely want to stay where you are, buying might be okay...just make sure you cover all your bases (1) think of the worst case scenario with buying - value tanks, you're in the hole potentially hundreds of thousands of dollars, and you need to move for work or some other reason. Would you be okay? (2) Are you really where you want to be in terms of company/job/location? Will buying a house tie you down in some way that limits your potential?

JohnGalt

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Re: first world housing problem
« Reply #16 on: May 14, 2014, 01:31:48 PM »
Quote
I find it very hard to believe that there isn't a house that would work for under $1 million within a 30 minute drive radius of just about anywhere.  It might not meet the standards you're looking for - but I'd be very surprised if the option is not there to even get into the $500,000 ballpark within that 30 minute drive radius.  Justify the expense any way you want - I actually don't won't even fault you for it so long as you realize that you're making the choice to trade additional years of working for it.  If it's worth it to you - that's perfectly fine - but own up to the choice rather than trying to tell us that you have no choice.

few things: 
1) I think at 30, maybe 25 minutes from work one might be able to get something right around 1 million but i think i said that below.

2) The only option in the 600 range is east palo alto which is right about 20 minutes with an exceedingly high crime rate and poor schools.  It is improving but isn't great. http://en.wikipedia.org/wiki/East_Palo_Alto,_California

3) feel free to put in palo alto california, and do the search for yourself on zillow or some equivalent housing search.  When you see the prices just understand that houses are selling for an average of 20-30% above list price.   


So I obviously don't live there and don't know the driving conditions and market... but just a couple of quick searches looks like there are options...

According to Google, Sunnyvale is 15 minutes away from Palo Alto.  Granted that's not rush hour, but it's 9.6 miles so it can't be much worse than 30 minutes.  http://imgur.com/An9JAQm
According to Zillow, there are 3/2 new houses in the $300,000 range.  http://www.zillow.com/homedetails/1111-Morse-Ave-SPC-40-Sunnyvale-CA-94089/2108131181_zpid/

As I said, if you want to pay the million it costs to live where you want to live that's fine - but is it not worth at least considering alternatives in the context of what a difference it would make towards reaching financial independence? 

Of course I also said I wouldn't get into this... so this is where I bow out.  You're either open to examining options like this or you aren't, I don't think anything I can bring up will change that.


ZiziPB

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Re: first world housing problem
« Reply #17 on: May 14, 2014, 01:53:02 PM »
JohnGalt, your Zillow link pulls up a property in a 55+ community ;-) - probably not what the OP would be interested in.

worms

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Re: first world housing problem
« Reply #18 on: May 14, 2014, 02:23:47 PM »
JohnGalt, your Zillow link pulls up a property in a 55+ community ;-) - probably not what the OP would be interested in.

I like the bit where it says "This stunning...home...will not last long!" Lol!

JohnGalt

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Re: first world housing problem
« Reply #19 on: May 14, 2014, 02:33:41 PM »
JohnGalt, your Zillow link pulls up a property in a 55+ community ;-) - probably not what the OP would be interested in.

haha fair enough - didn't see that part.  So maybe $300k isn't doable - I probably shouldn't have picked the lowest option I could find anyways.  Point is that $1 million isn't the minimum price range to be looking at.  It looks like there are plenty in the $500k - $700k range that would be within a half hour or so of Palo Alto. 

It may take the million to get what they want where they want it - hell, they can afford it and still hit FI fairly young - but the point is that this is a huge expense and warrants really considering every possible alternative to bring it down because they could get there even younger if they chose to prioritize it.  If that's not what they want to prioritize fine, but the cop out of "we just live in an expensive area so we have to spend more on a house than what many people on this forum plan to have as total assets when they retire" goes against the very core of what this site is about. 

mboulder

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Re: first world housing problem
« Reply #20 on: May 14, 2014, 03:02:02 PM »
Well, based on the info you've given, 1) seems like the best deal if there are no strings attached. 2) is basically a variable-rate loan of $200k - I don't know Palo Alto real estate that well, but I'd be surprised if the home didn't earn equity over 10 years - which means this could be an extremely expensive loan. 3) is bad because, if you leave, you'll be forced to either liquidate your savings/investments to pay it off at once (bad if the market is down), or refinance, possibly at a non-optimal rate if the timing is bad. 4) just sounds like a bad deal all around.

If there were no strings attached, like having to repay anything if you leave before 10 years and you are hell bent on buying, I'd go for option 1. But really these options are nothing more than 10 year golden handcuffs. Who stays in their job for 10 years anymore? Who can predict what the market will do between now and then? There is just too much uncertainty, and you are the one that takes all the risk on if things don't pan out. Plus it closes options for you - you might not be encouraged to find a better job if it means you'll be on the hook for $50k or something. I live relatively frugally so I can have options, so I would be extremely wary of a course of action that potentially closes any.

roboto

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Re: first world housing problem
« Reply #21 on: May 14, 2014, 10:25:33 PM »
Sounds exactly like my country.

Yeah, my first thought was "Singapore?" I think it currently ranks as most expensive place to live in the world according to the first results on google. Only thing crazier than the housing prices are the car costs. Hats off to anyone who can be mustachian there. I read this article about Singapore's housing a while ago, warning of a bubble: http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/ and the followup after some criticisms: http://www.forbes.com/sites/jessecolombo/2014/01/16/its-not-a-bubble-until-its-officially-denied-singapore-edition/

To the OP, if you definitely want to stay where you are, buying might be okay...just make sure you cover all your bases (1) think of the worst case scenario with buying - value tanks, you're in the hole potentially hundreds of thousands of dollars, and you need to move for work or some other reason. Would you be okay? (2) Are you really where you want to be in terms of company/job/location? Will buying a house tie you down in some way that limits your potential?

Public housing in Singapore doesn't cost upwards of a million. Only if you want to go all fancy pants and get a condo or half of a duplex. Cars are definitely killer in price, but as a mustachian you won't need one!

chasesfish

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Re: first world housing problem
« Reply #22 on: May 15, 2014, 05:41:27 AM »
I would do that, nice deal from your employer

NumberCruncher

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Re: first world housing problem
« Reply #23 on: May 20, 2014, 07:46:09 AM »
Sounds exactly like my country.

Yeah, my first thought was "Singapore?" I think it currently ranks as most expensive place to live in the world according to the first results on google. Only thing crazier than the housing prices are the car costs. Hats off to anyone who can be mustachian there. I read this article about Singapore's housing a while ago, warning of a bubble: http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/ and the followup after some criticisms: http://www.forbes.com/sites/jessecolombo/2014/01/16/its-not-a-bubble-until-its-officially-denied-singapore-edition/

To the OP, if you definitely want to stay where you are, buying might be okay...just make sure you cover all your bases (1) think of the worst case scenario with buying - value tanks, you're in the hole potentially hundreds of thousands of dollars, and you need to move for work or some other reason. Would you be okay? (2) Are you really where you want to be in terms of company/job/location? Will buying a house tie you down in some way that limits your potential?

Public housing in Singapore doesn't cost upwards of a million. Only if you want to go all fancy pants and get a condo or half of a duplex. Cars are definitely killer in price, but as a mustachian you won't need one!

Aren't there income limits for public housing in Singapore? Somewhere like $10k-$15k? (just using Wiki - not sure if it's up to date).
« Last Edit: May 20, 2014, 08:36:26 AM by NumberCruncher »

Another Reader

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Re: first world housing problem
« Reply #24 on: May 20, 2014, 08:18:53 AM »
The house John Galt cites is a mobile home in a senior mobile home park.  Space rent has to be added as well.  The cheapest thing on the market in Sunnyvale is a one bedroom condo at $375,000.  You can get small 3/2 houses in Sunnyvale starting just under $700k, but you will be on a busy street and/or in a marginal neighborhood.  To get a decent house in the $750k range will put the OP 45 minutes or more away from work.

In the OP's shoes, I would keep the sweet rental deal and wait.  The market here is cyclical and peak demand has passed.  Houses are staying on the market longer and there are fewer multiple offers.   When tech company earnings drop and the layoffs begin, prices will drop.

dragoncar

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Re: first world housing problem
« Reply #25 on: May 20, 2014, 10:08:44 AM »
The house John Galt cites is a mobile home in a senior mobile home park.  Space rent has to be added as well.  The cheapest thing on the market in Sunnyvale is a one bedroom condo at $375,000.  You can get small 3/2 houses in Sunnyvale starting just under $700k, but you will be on a busy street and/or in a marginal neighborhood.  To get a decent house in the $750k range will put the OP 45 minutes or more away from work.

In the OP's shoes, I would keep the sweet rental deal and wait.  The market here is cyclical and peak demand has passed.  Houses are staying on the market longer and there are fewer multiple offers.   When tech company earnings drop and the layoffs begin, prices will drop.

Yeah but the point is that there are cheap (under $1 million) options in the area.  As a house hunter myself I'm getting tired of the completely subjective phrase "decent house".

totoro

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Re: first world housing problem
« Reply #26 on: May 20, 2014, 11:37:58 AM »
The new job - how much more does it pay and is it better than your current job after factoring in the housing allowance plus all other variables? 

If you take this housing perk and then take a new job what happens to #2?

If you factor in your housing perks and you have $100,000 to put down that can be matched by your employer (is the matching $100,000 interest free?) plus the $15,000 a year housing supplement (what is this after tax?) plus the $200 000 interest-free loan you get to a housing cost of about $2000-$2500 a month for a 1.1 million dollar home if you get a mortgage for a ten year term @ 2.99 amortized over 25 years. 

In my area this budget would include taxes, insurance and most repairs on a well-maintained home but no renos - I don't know your area well enough to guesstimate.   

If you invest the savings of buying vs. renting over ten years ($24,000 a year at 6%) you will have an additional $332,886.57 in year ten by buying rather than renting.   

At year ten, factoring in the full loan forgiveness, you will have $100,000 of your down payment plus the $100,000 down payment gift from your company plus another $200,000 in paid-off equity, less the payment due on the appreciation on your $200,000 interest-free down payment gift and lost opportunity costs on your $100,000 down payment.

This means that if there is no appreciation over the next ten years you will have the $100,000 (gift from company) + $200,000 equity pay down -  $35,000 LOC = $265,000 to the black.

If you get 3% appreciation average over ten years you will get the $265,000 + $378,308 in appreciation - $68,743 payment on company down payment appreciation = $572,565 to the black less cost to sell to realize gains - unless you choose to borrow against equity to invest otherwise instead.

Also, where you live can you write interest on mortgages off against income?  If so, you need to add this benefit to the bottom line.  You also need to adjust for rental increases and make reasonable estimates of the costs of owning for the house and the neighbourhood.

Renos are tricky, if you do them well you can get a fair portion back on resale so they are not a complete loss but you can erode your bottom line by going overboard on these.

Now, if you would never rent for the next ten years you need to do the calculation all over again with the scenario of being at a higher wage at a different job without the housing perks vs. staying where you are.  Job security is also a factor.

I don't believe that you can predict a market crash.  I also believe prices cannot rise above inflation forever.  Put those things together and you need to make sure you manage risk while considering the most likely scenarios.

Finally, being forced to sell a high priced property with a big mortgage during a crash is a path to bankruptcy.  Divorce and job loss are two major risks that could lead to this.

Kyle M

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Re: first world housing problem
« Reply #27 on: May 20, 2014, 11:45:41 AM »
I wouldn't be too worried if I were you.

Cassie

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Re: first world housing problem
« Reply #28 on: May 20, 2014, 01:48:20 PM »
When I was raising 3 boys we first lived in a 1,000 sf home & it was not fun.  We then moved to a 1600 with still only one bathroom and it was great.  The boys could have friends over, etc without everyone being on top of each other.  Our house became the place to gather & we could not have done that in a smaller house because I was also going to college & needed  a quiet place to study.

burly

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Re: first world housing problem
« Reply #29 on: May 20, 2014, 01:58:58 PM »
Maybe I'm looking at the wrong sunnyvale, CA?

http://www.zillow.com/homedetails/1225-Vienna-Dr-559-Sunnyvale-CA-94089/2107361712_zpid/

3br, 2 bath, 1600sqft in an 'all age community' of Plaza Del Rey for $329k.

dragoncar

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Re: first world housing problem
« Reply #30 on: May 20, 2014, 02:09:12 PM »
Maybe I'm looking at the wrong sunnyvale, CA?

http://www.zillow.com/homedetails/1225-Vienna-Dr-559-Sunnyvale-CA-94089/2107361712_zpid/

3br, 2 bath, 1600sqft in an 'all age community' of Plaza Del Rey for $329k.

Sure, if you want to rent your land for another $1k-???/mo

Gen Y Finance Journey

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Re: first world housing problem
« Reply #31 on: May 20, 2014, 02:39:33 PM »
Maybe I'm looking at the wrong sunnyvale, CA?

http://www.zillow.com/homedetails/1225-Vienna-Dr-559-Sunnyvale-CA-94089/2107361712_zpid/

3br, 2 bath, 1600sqft in an 'all age community' of Plaza Del Rey for $329k.

Sunnyvale is full of attractive looking mobile homes listed on Zillow as single family homes. If the OP is looking for an actual single family home in or near Palo Alto, he's going to have to shell out the big bucks. There are fixer-uppers in Palo Alto being sold for over $1M.

Now, I'm completely priced out of the area, so it doesn't matter to me whether a house is $600k or $1.2M, I can't afford it either way. So I haven't done extensive research on the type of home you can get in the lower range, but I don't think the OP is exaggerating very much, if at all.

NumberCruncher

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Re: first world housing problem
« Reply #32 on: May 20, 2014, 02:43:22 PM »
Maybe I'm looking at the wrong sunnyvale, CA?

http://www.zillow.com/homedetails/1225-Vienna-Dr-559-Sunnyvale-CA-94089/2107361712_zpid/

3br, 2 bath, 1600sqft in an 'all age community' of Plaza Del Rey for $329k.

Sure, if you want to rent your land for another $1k-???/mo

Management seems like a peach, too: http://www.citysearch.com/profile/862361/sunnyvale_ca/plaza_del_rey_mobile_home_park.html

chschen

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Re: first world housing problem
« Reply #33 on: May 20, 2014, 03:34:49 PM »
Now, I'm completely priced out of the area, so it doesn't matter to me whether a house is $600k or $1.2M, I can't afford it either way. So I haven't done extensive research on the type of home you can get in the lower range, but I don't think the OP is exaggerating very much, if at all.

I agree. I live in this area, too, and the housing prices are crazy. I am lucky enough to currently be squatting with my in-laws, but we were thinking of moving out and renting a place, and it scares me how much rent is. I have friends (a couple) who are looking to buy in SF. One is a doctor and the other is a lawyer, so they make good incomes, but they're experiencing quite a bit of sticker shock, even considering the places they're looking at are already considered "cheaper" parts of the city. And he'll have to commute an hour each way by bike/public transit to his place of work. They have a bun in the oven, so that's why they're leaving their nice one-bedroom rent-controlled apartment in a desirable part of the city. Also, they aren't Mustachian (but still relatively frugal).

When we were looking at housing options I looked at those mobile homes in Sunnyvale, too, but I don't want to have to pay land rent on top of everything else. :\ It's the worst of both worlds.

dragoncar

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Re: first world housing problem
« Reply #34 on: May 20, 2014, 03:39:15 PM »
Now, I'm completely priced out of the area, so it doesn't matter to me whether a house is $600k or $1.2M, I can't afford it either way. So I haven't done extensive research on the type of home you can get in the lower range, but I don't think the OP is exaggerating very much, if at all.

I agree. I live in this area, too, and the housing prices are crazy. I am lucky enough to currently be squatting with my in-laws, but we were thinking of moving out and renting a place, and it scares me how much rent is. I have friends (a couple) who are looking to buy in SF. One is a doctor and the other is a lawyer, so they make good incomes, but they're experiencing quite a bit of sticker shock, even considering the places they're looking at are already considered "cheaper" parts of the city. And he'll have to commute an hour each way by bike/public transit to his place of work. They have a bun in the oven, so that's why they're leaving their nice one-bedroom rent-controlled apartment in a desirable part of the city. Also, they aren't Mustachian (but still relatively frugal).

When we were looking at housing options I looked at those mobile homes in Sunnyvale, too, but I don't want to have to pay land rent on top of everything else. :\ It's the worst of both worlds.

Damn, I'd keep anything rent controlled in a heartbeat, save up cash to buy after the next big quake or tech downturn.

Not that I'm buying, but are ground leases rent-controlled?  I always assumed they must be somehow because otherwise what the heck would you do if you couldn't afford the rent increase?

Nords

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Re: first world housing problem
« Reply #35 on: May 24, 2014, 10:33:01 AM »
Yeah but the point is that there are cheap (under $1 million) options in the area.
I'd call this sentiment oxymoronic, but I frequently find myself uttering the same thoughts on parts of Oahu...

First-world problem indeed.