A 1 hour drive or 2.5 hour transit trip?
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6 figures considered low income for family of 4 in some Bay Area counties [ABC7]
- Thread starter wenis
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A 1 hour drive or 2.5 hour transit trip?
Escape Goat
Member
50,000 in Dallas is like 90,000 in San francisco so context helps. I assume low income does not mean living at or around the poverty line.
Is it only a one hour drive? I figured much more in traffic.
To where exactly? It's not like every job in the Bay Area resides in SF/Silicon Valley. 75% of commuters in the North Bay travel within or between the two counties (Marin/Sonoma) for example.
Vegetable Lasagna
Member
There is no housing bubble in SF. The rich want to live here, period. Everyone else would also like to live here. Infinite amounts of demand. And the prices will keep skyrocketing until there are no real locals or culture left here. Just a bunch of rich white people high fiving each other and being boring. Pretty much like if the Marina District took over the entire city.
The moment this thing went up I knew I would forever be slumming it up:
The moment this thing went up I knew I would forever be slumming it up:
KennyLinder
Member
I am sure Dan on Giant Bomb was saying he paid $3k a month or something ridiculous for his appartment. I wasn't aware the GB guys were on so much! :/
Seth Enosh
Member
There isn't "infinite" demand.
I, for one, have no intention to move to SF even if houses there were $1.
There is some level of finite demand and if SF and the surrounding communities had allowed the private sector to build sufficient high-density development, or built it as public housing, the rent would not be as high as it is.
It may be fair to say that there isn't a "bubble" though since that implies irrational market exuberance, whereas what's happening in SF is a textbook case of the law of supply and demand applied to housing stock.
Vegetable Lasagna
Member
Depending on the neighborhood that could be the smallest studio apartment you've ever seen. Maybe he Is lucky and has a bedroom though.
KennyLinder
Member
I think he said it was multiple buses into work. $3k a month is proper batshit for an apartment.
jstevenson
Sailor Stevenson
hmm, the housing isn't a bubble for sure.
Tech might be, and that could be fueling the cash / salaries that is causing housing prices to explode there.
Lack of supply is a major part of the issue too.
The reality is more likely that due to all of the tech industry money flowing into that small little peninsula, you basically have a product that everyone in the country (and world really) uses being created (in large part) out of a very small region.
Similar effects are being felt in the Seattle / Redmond area, especially as Amazon continues to scale, and in the Westside of Los Angeles (Silicon Beach - as they call it) --- though urban and housing development hasn't been nearly as constrained in those areas as it is on the SF Peninsula.
I've lived in the Bay Area my whole life and yeah, things are obscene at this point.
A close friend of mine is a software engineer at a Big 4 tech company here and he's making well over $120k per year. He has a wife and 2 kids and he can't afford a house. Think about that for a second, he is a very talented software engineer, so much so that he got into a Facebook/Google/Microsoft/Amazon level company with no college degree and is getting paid handsomely, yet he still cannot afford a regular home in the South Bay.
For example, this 3 bedroom, 2.5 bathroom house in the San Jose area is $1,400,000. That's an average monthly payment of $5,600.
At around $120,000/yr in California, your take home pay is $6,700/month. That's 83.5% of your take home pay going straight to your mortgage.
That is the struggle people are dealing with while living here. Yes, the pay is great relative to the rest of the country, but the housing costs are eating WAY too high of a percentage of your salary.
A close friend of mine is a software engineer at a Big 4 tech company here and he's making well over $120k per year. He has a wife and 2 kids and he can't afford a house. Think about that for a second, he is a very talented software engineer, so much so that he got into a Facebook/Google/Microsoft/Amazon level company with no college degree and is getting paid handsomely, yet he still cannot afford a regular home in the South Bay.
For example, this 3 bedroom, 2.5 bathroom house in the San Jose area is $1,400,000. That's an average monthly payment of $5,600.
At around $120,000/yr in California, your take home pay is $6,700/month. That's 83.5% of your take home pay going straight to your mortgage.
That is the struggle people are dealing with while living here. Yes, the pay is great relative to the rest of the country, but the housing costs are eating WAY too high of a percentage of your salary.
Old Gimlet Eyes
Member
I'll give you fairfield/vacaville, but I wouldn't count Sonoma County as Bay Area. And I sure as hell wouldn't recommend Richmond to anyone, unless they have a death wish.
Lol at that picture.
Icelandic_Jazz
Member
Not to mention putting a down payment on a house like that. It would take many many years, even with a decent income to afford a down payment of 10-20%. Factor in debt/student loans if you have them and it can be basically unachievable.
You don't have to count the North Bay as part of the Bay Area if you don't want to I guess, but it absolutely is. It's also one of the most affordable and beautiful parts of the Bay Area (but I'm biased
) Richmond has bad and good neighborhoods just like everywhere else. I wouldn't recommend the bad neighborhoods, just like I wouldn't recommend Hunters Point in SF, but the good ones are actually pretty nice.
Exactly, that $5,600/month mortgage payment I stated was under the assumption that you put down 20% up front, which for that house is $280,000 lol. Using your remaining $1,100 to feed your family, pay your bills, and pay down debt each month isn't gonna work. Not a chance.
Marty Chinn
Member
Yep, 20% down on 1.4 million is a sum of $280k. That outright buys a house in most other areas of the US and in some places, two houses.
I've been arguing for years on this board against people who are misguided to think that making six figures means you're rich because they simply do not understand the economics of what it costs to live in some places.
I honestly wish I was wiser about buying a house earlier instead of waiting simply because we were being priced out of what we were aiming for. We should have not been as conservative and we should have looked further out because we could have had a huge cost savings if we did so. I think the house we live in now was worth 25% less not even two years earlier than when we bought it. We ended up spending more and being further out than we could have as a result.
House prices may be slowing in growth in the South Bay in some parts but it's only causing houses further out to rise to that same level until the entire area is going to be over a million on average per house.
If he can't afford to live there, he ain't getting paid handsomely. I really can't understand this though, if it were me i would just say fuck it and move elsewhere with a better salary/price coefficient.
Dreams-Visions
Member
homeless?
Septimus Prime
Member
Don't worry about using that $1,100. You'll need it for property tax.
The moment this thing went up I knew I would forever be slumming it up:
Unreal. Imagine going to work every day at your middle class job and seeing that billboard, a slap in the face that you will never own your own house and be financially independant.
ghostofsparta
Member
and yet people are buying these homes with a Tesla parked in front. How? Personally my coworkers do it with a dual income. Get yourself a significant other who also makes 120k
I know foreign investment is huge as well
here's just a couple articles I found:
https://www.forbes.com/sites/ellens...s-in-u-s-commercial-real-estate/#1febf4c74199
https://www.bisnow.com/san-francisc...foreign-investment-and-the-trump-effect-67907
m_shortpants
Member
Some of these houses get multiple offers, 100% cash. Foreign investment is crazy.
opticalmace
Member
Moving to the bay area next month... RIP wallet.
You guys realize that the 6 figures in the OP is household income right? Not necessarily one person's salary.
Both spouses can work. It's not the 1950s anymore.
In your example, if his wife also worked all of a sudden the housing cost goes down to under 50% of their income.
MiniBossBattle
Member
That is crazy dans rent is more than my mortgage. My wife and I bought a fixer-upper when the housing market crashed in 2008 but neighbors are selling thier houses now at prices we could never afford. Our home value went up but I feel like if we moved, we wouldn't be able to afford to buy in our area.
"Marry someone who also makes a lot of money" is a pretty shallow mindset to have lol.
Ding ding ding!
Yes, both spouses can definitely work. But, think about it like this: If an experienced software engineer at Google, Facebook, etc can't afford a house, what the hell does it take? $120k+ is the salary of someone with a GREAT job in the Bay Area. What about the normal earners like teachers, social workers, etc who are still making like $40-50k? They're dead in the water by comparison.
Herr Schwarz
Banned
I'd be interested in seeing property ownership in terms of age.
How old are the people that are earning enough to afford the housing.
Are there enough young people emerging into an age and financial position where they are able to purchase said housing in the future.
If not then it will be a bubble that'll burst but aslong as there's a market for houses at those prices then it'll remain.
It just depends if the new generation of working class are getting equal economic footing as the older generations.
How old are the people that are earning enough to afford the housing.
Are there enough young people emerging into an age and financial position where they are able to purchase said housing in the future.
If not then it will be a bubble that'll burst but aslong as there's a market for houses at those prices then it'll remain.
It just depends if the new generation of working class are getting equal economic footing as the older generations.
facetheslayer92
Member
Welp, I hear Phoenix is nice and affordable, right guys? :/
Marty Chinn
Member
In his example, the family has two kids so whatever the spouses take home pay, subtract around 36k for daycare for the two kids. When you have kids, you either pay a high cost of daycare or you have the person stay home to take care of the kids. So you don't suddenly get all that income without any trade off.
Yea I see your point. What I don't understand is where do all the people who work at McDonald's live? I assume with a lot of roommates or far away. But then, why would they choose to work there when they can live cheaper somewhere else while doing the same thing?
A huge part of this is that the people who own these homes bought them a long time ago. The same friend I mentioned earlier has a grandfather with a home in this same area. He bought the house 40+ years ago for $30,000 and now it's worth around $1,200,000. Because he bought it for $30k, the taxes/mortgage have always been cake.
I think one of the major issues is that housing has shot up in price in the last 20 years and salaries haven't. We've been seeing wage increase debates regularly here in California. Hell, San Jose recently increased minimum wage to $15/hr by 2019. Even if that change took place immediately, you'd barely scrape by making that much here.
A lot of people do leave. Many people from the Bay Area have fled to Seattle, Portland, and Austin in the last 10 years. Prices there are inflating too because of the incoming waves.
Wages are higher in the city. Minimum wage in SF is $13/hour for example, so there's some benefit to them commuting.
MrToughPants
Brian Burke punched my mom
Was wondering why SF has no large apartment/condo complexes and the building height limit is 40ft? Lmao
lastflowers
Banned
I point out this exact thing in conversation with coworkers.
ghostofsparta
Member
From my experience, the vast majority of those working in low wage jobs like McDonalds are Mexican or Central American. I know for a fact these people live in shared housing, like 2-4 families to a house, usually in the "bad" parts of the Bay like East Oakland, East Palo Alto, San Leandro, etc. Each family will take a room plus the garage.
Why do they stay? Because the alternative is the Central Valley, and trust me, you don't want to go to the Central Valley. But a lot eventually do have to call it quits and move, and have to travel from Tracy, Stockton, Patterson.
I have no studies on this, but I can personally invite you to check it out.
The poorest often do not have an option to move, they are in a rent trap and cannot afford a disruption in whatever support structure they have.
It's the correlation between race, class and economic outcomes that make anti housing policies, racist policies.
Edit: and as @ghostofsparta wrote, just because tenements were made illegal does not mean they went away.
It's criminal I tell you
The suspect the land isn't the most stable land to build on. There are some buildings in SF that are sinking. The one that comes to mind is the Millennium tower.
But on top of that, building up isn't going to help when the city is over populated to begin with. I remember one holiday where I travelled two blocks in 2 1/2 hours. And I remember that someone thought it was a bright idea to build a basketball stadium in SF. It's hard enough driving when there's a giants game. I think that idea was finally scrapped.
I left 2 years ago after my house went for almost double the price after 8 years but I heard things got worse since then.
Pagusas
Elden Member
Looks ugly to me.
That idea is not scrapped.
In fact my office is right next to the future warriors arena. Mission bay, dogpatch and soma are fucked
Paris is dense as hell and barely had any buildings taller than 6 stories.
Skyscrapers do not fix housing problems. 6 story walk-ups do.
Rest
All these years later I still chuckle at what a fucking moron that guy is.
Doesn't make it not lower middle class.
Roommates are the norm here. Or multiple (or large) families living in single family homes. It's asinine.
That's almost the price I paid for my house 5 and a half years ago outside of Boston, within walking distance to a direct subway straight into Boston. And Boston is considered one of the more expensive markets in the country. Just to put the insanity into perspective. My house is worth close to $400k now, but still.
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