Author Topic: The Bay Area - commiserate with me  (Read 4945 times)

fetish

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The Bay Area - commiserate with me
« on: August 31, 2015, 05:07:19 PM »
I work in SF (not in tech), live in Oakland. I moved to the bay area from NYC recently, lured by a big raise to $95k/year. Sadly, I'm learning that the goal of home ownership is equally no closer than when I made much less.

I don't drive, so housing near BART is a requirement, but it seems like a stretch to buy anything for more than $350k - and that's the going rate for a "complete fixer" (literally, has no kitchen) in a terrible neighborhood. Should I just bow out, keep renting (at an obscene amount), and wait for a bunch of money to fall into my lap? Have you made home owning a reality for you in the East Bay (especially if you are a BART commuter)?

Thanks!


flyfig

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Re: The Bay Area - commiserate with me
« Reply #1 on: August 31, 2015, 05:16:59 PM »
My sympathies. Originally from NYC, lived and worked in SF for 8 years and finally packed up to move down to LA (well.... really south LA so cheaper). The real estate was insane and needed to get out. Roommates are a lifesaver.

iamlindoro

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Re: The Bay Area - commiserate with me
« Reply #2 on: August 31, 2015, 05:20:45 PM »
Don't buy a home in the Bay Area, full stop.  Live extremely frugally, rake in all the Bay Area money, get out.

I know this probably isn't exactly what you want to hear, but the Bay Area isn't a place to move to be a homeowner right now.  It's a place to make an f-ton of money quicker than you can anywhere else.

bryan

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Re: The Bay Area - commiserate with me
« Reply #3 on: August 31, 2015, 05:48:25 PM »
I've been living in the bay area and minimizing expenses more than most. The plan was to get to a sufficient stash as fast as possible. But at some point.. what _city_ would I want to move to that is better than SF and Oakland?

From experience, it's a more preferable place to live than Austin, Dallas, Nashville, Seattle, at least. And anything in the northeast US is right out. Well, maybe it's a little harsh.. someone was selling me on Pittsburgh or Philly the other day.

Sorry for not espousing the reasons I love these two cities in more detail. On mobile.
« Last Edit: August 31, 2015, 06:13:23 PM by bryan »

LAGuy

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Re: The Bay Area - commiserate with me
« Reply #4 on: August 31, 2015, 08:12:06 PM »
As a life long Californian that didn't buy until he was 38, I'd say happily rent for now. I've always watched the property markets closely, and at best there is a 2 maybe 3 year window where buying makes sense, and then it's gone for like 10 to 15 years. You make nearly exactly what I do, and I paid $285,000 for my place in 2011. I too couldn't have handled much more. No way I could afford to buy my place now just 4 short years later. You make the wrong move on real estate out here and it will fuck you for the next 2 decades. Just chill and observe the market for awhile. If you're new, roommates can be fun and frankly necessary...people can be hard to meet if you're on your own. I concur with the strategy of just raking in that sweet California salary and then getting out. I love it here, but California over the last 15 years has rapidly become a place to get paid and get out...not to put down roots.

zephyr911

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Re: The Bay Area - commiserate with me
« Reply #5 on: September 01, 2015, 08:26:28 AM »
$95K wouldn't get me out of Alabama, let alone into the Bay Area.

If COL has effectively negated your raise, that's a hell of a lesson learned. It might be time to consider another move.

jinga nation

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Re: The Bay Area - commiserate with me
« Reply #6 on: September 01, 2015, 09:54:18 AM »
$95K wouldn't get me out of Alabama, let alone into the Bay Area.

If COL has effectively negated your raise, that's a hell of a lesson learned. It might be time to consider another move.

Same here, it wouldn't get me out of Florida. I love my Tampa Bay beaches a little too much. Low/Mid COL area and investable RE.

fetish

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Re: The Bay Area - commiserate with me
« Reply #7 on: September 01, 2015, 12:12:56 PM »
$95K wouldn't get me out of Alabama, let alone into the Bay Area.

If COL has effectively negated your raise, that's a hell of a lesson learned. It might be time to consider another move.

Well - I moved from NYC, so there's a big quality-of-life upgrade, space-of-living upgrade, etc.

OK, next question: what SHOULD I be doing with my money instead of buying a house?

I had 30k or so in Lending Club, which I've been drawing down over fears of illiquidity; about 10k in the stock market (now trading at... $6500); $10k in cash, and about 20k in various retirement accounts. Ideas?

iamlindoro

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Re: The Bay Area - commiserate with me
« Reply #8 on: September 01, 2015, 12:26:51 PM »
$95K wouldn't get me out of Alabama, let alone into the Bay Area.

If COL has effectively negated your raise, that's a hell of a lesson learned. It might be time to consider another move.

Well - I moved from NYC, so there's a big quality-of-life upgrade, space-of-living upgrade, etc.

OK, next question: what SHOULD I be doing with my money instead of buying a house?

I had 30k or so in Lending Club, which I've been drawing down over fears of illiquidity; about 10k in the stock market (now trading at... $6500); $10k in cash, and about 20k in various retirement accounts. Ideas?

Max out employer match on 401k
HSA if available
Roth/Traditional IRA
Max out 401k completely
Taxable

In that order, low cost total stock market funds in any account, any bond allocation in tax-advantaged accounts only.

NorCal

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Re: The Bay Area - commiserate with me
« Reply #9 on: September 01, 2015, 01:10:24 PM »
I feel your pain from San Mateo.

We dropped out of the housing market in 2012 because it was too expensive for our tastes at the time.  We decided to save for a bigger down payment.  Now we're extraordinarily lucky to have below-market rent (good relationships with your landlord are important) of "only" $2,800/mo.  And now that we've saved an extra few-hundred thousand, we can actually afford to buy less than we could when we dropped out of the market.

While it is annoying, I still felt we made the right choices along the way.

Don't rush to buy just for the sake of buying.  Keep renting and saving until buying truly makes sense for you personally. 

CanuckExpat

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Re: The Bay Area - commiserate with me
« Reply #10 on: September 01, 2015, 01:37:24 PM »
Don't rush to buy just for the sake of buying.  Keep renting and saving until buying truly makes sense for you personally.

This pretty much sums it up. There is no reason to have home ownership as a goal, unless it is some deeply held fetish of yours.

Do what makes sense for you both personally and financially.

fetish

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Re: The Bay Area - commiserate with me
« Reply #11 on: September 01, 2015, 02:52:26 PM »
You know, I've been working for 15 years now and never had an employee match a penny of retirement/401k/deferred comp money, just allowed us to contribute pre-tax. Where's everyone getting these matching deals from?

iamlindoro

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Re: The Bay Area - commiserate with me
« Reply #12 on: September 01, 2015, 03:04:09 PM »
You know, I've been working for 15 years now and never had an employee match a penny of retirement/401k/deferred comp money, just allowed us to contribute pre-tax. Where's everyone getting these matching deals from?

Plenty of companies offer them-- though by no means all.  My fiancÚ works retail.  She has a 401k match.

Still, just because you don't have matching doesn't mean the tax-deferral isn't highly valuable.

CanuckExpat

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Re: The Bay Area - commiserate with me
« Reply #13 on: September 01, 2015, 03:46:30 PM »
You know, I've been working for 15 years now and never had an employee match a penny of retirement/401k/deferred comp money, just allowed us to contribute pre-tax. Where's everyone getting these matching deals from?

It's not the only reason why, but the company's hand might be forced a bit more if you work somewhere with both higher and lower incomes, and where the latter group does not contribute much as the former . This can get the company in trouble with the IRS.

One way around it is to meet the safe harbor rules, one option being allowing a certain amount of employer matching with immediate vesting. Then I think the difference in contributions between higher and lower income employees no longer becomes a problem.

Scarter

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Re: The Bay Area - commiserate with me
« Reply #14 on: September 02, 2015, 02:31:28 AM »
Look into Below Market Homes in San Francisco.  Every county is mandated to offer some type of affordable living space for rent or sell.  I believe in the County of San Francisco you are considered moderate or low income at $95K a year.  Read the link carefully and think whether you would like to put your roots down in the Bay Area.  This program allows you to live in an affordable home for 45 years then all equities are yours, if you stay for less than 45 years the equity is limited.  This program allows you to purchase a very affordable home in a very decent area, so your mortage is often close to what you pay in rent and meanwhile you can stash more money away.  Hopefully some day in the near future, have enough to saved to move or upgrade or FI.  All the best!

http://sf-moh.org/index.aspx?page=299

cloudsail

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Re: The Bay Area - commiserate with me
« Reply #15 on: September 02, 2015, 10:29:01 AM »
Don't buy a home in the Bay Area, full stop.  Live extremely frugally, rake in all the Bay Area money, get out.

I know this probably isn't exactly what you want to hear, but the Bay Area isn't a place to move to be a homeowner right now.  It's a place to make an f-ton of money quicker than you can anywhere else.

Agree 100%. Now is not a good time to buy here.

cloudsail

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Re: The Bay Area - commiserate with me
« Reply #16 on: September 02, 2015, 10:33:14 AM »
Mountain View here, originally from Seattle.  We bought our old and small townhouse a couple years ago.  I'm terrified that the housing crash will come before we are ready to sell our place and get the hell out.  New townhomes in our neighborhood are going for over $1.3 million.

No way we can retire here.  We are both in tech, and with two young children the stress is really starting to get to me.  I love California and the sunshine, but I'm beginning to dream of leaving.

CanuckExpat

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Re: The Bay Area - commiserate with me
« Reply #17 on: September 02, 2015, 11:16:52 AM »
I don't drive, so housing near BART is a requirement, but it seems like a stretch to buy anything for more than $350k - and that's the going rate for a "complete fixer" (literally, has no kitchen) in a terrible neighborhood.

tonysemail

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Re: The Bay Area - commiserate with me
« Reply #18 on: September 02, 2015, 11:42:05 AM »
You know, I've been working for 15 years now and never had an employee match a penny of retirement/401k/deferred comp money, just allowed us to contribute pre-tax. Where's everyone getting these matching deals from?

You're not alone... I've been at the same company for 15 years and they only added 401k match 2 years ago.
The excuse from the CEO was that re-investing profits into the business provides better return to employees than 401k match.
But eventually the masses got their 401k when it became apparent that the stock is not growing :P

El Marinero

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Re: The Bay Area - commiserate with me
« Reply #19 on: September 02, 2015, 12:37:41 PM »
Looks like the OP would qualify for the federal Mortgage Certificate Program which would help with the mortgage on a Bay Area property

More info here:  http://www.calhfa.ca.gov/homebuyer/programs/index.htm