They're a little off, but not much. The problem is that most people can't build a 5k sq ft place on a 7500 sq ft lot without going down as well as up. Basements in the Palo Alto flood zones are crazy expensive to build and permit so most don't do it, opting to stick to the sq ft requirements, which on a 7500 sq ft lot would be ... 3200?
5k would need a 10k lot in palo alto. A 10k lot in palo alto goes for 3m to 5m depending on neighborhood.
Land/lot cost: pretty dead on from my browsing of real estate in the Bay Area. I think the cost to build ($2M) is a little high — but I suppose the kind of person that drops $2M on the lot is "in for a pound" so to speak and will want the works when the house is constructed.
Presumably you mean they're to low? Don't forget that land and construction prices have continued to increase by a fair amount in the past two years, so expect to pay somewhere between 10% and 20% more, depending on the area. Also note that your local muni government may flat out refuse to let you build the house you want to build, depending on which city you're in and how big the house is you're trying to build.
Not to mention living with all of your extended family under one roof, starting a church or homeless shelter or disco club, stockpiling enough food to outlast a zombie uprising, or displaying your collection of luxury cars you never drive....
More seriously, in general single-family houses should be on the order of 1000–2000 square feet. The rest is typically a complete waste (nobody I know who has a 4000+ square foot house actually uses most of the space – people with real on-site wood shops etc. put them in a separate space detached from their home, not in spare bedrooms), and serves to isolate households from each-other, force a car-centric lifestyle, drive up housing costs for everyone and force people working essential menial jobs to live far away and commute long distances, cost much more public infrastructure than denser alternatives, etc.
I have a several rich programmer friends (early facebook or whatever) who bought outrageously large houses in Silicon Valley as a status symbol, but work all the time, eat out every meal, and only go home to sleep. What a tremendous demonstration of unthinking excess.
I don’t know about you, but 1000-2000 sqft for a single family home with an actual family in it is downright cramped.
You could turn a garage into a wood shop though if you don’t have a particular need to store your car in a garage.
The point of a large home is to turn it into your own personal oasis where you can spend days at a time without ever really needing to leave, and without feeling bored. The thing is, many people just don’t know how to live in a big house, because they spend so much time in cramped quarters until they can afford a home. A big house is all about features. Every room is an opportunity to have a space dedicated for something, if not for sleeping. Mindless excess is dumb, but thoughtful excess is amazing.
Oh, I don't know. We've lived in a 1900 sq ft house for the past 15 years. We have 7 kids (currently ages 4 to 20) and it has worked out just fine so far. We haven't felt cramped yet.
And a well designed small house is better still in my view - having everything you describe in a small place without it feeling cramped. My suggested measure is being able to vacuum the whole house from a single power point.
And a well designed small house is better still in my view
The design and layout of a house is so much more important than just the sq ft. I wish more people would focus on that. We have a really well planned out 1500 sq ft. house and we have literally more usable rooms and space than many people I know with houses more than twice the size.
Um... I grew up living in a maybe 1100 square foot house with 4 people and occasional extended guests. It was a bit tight maybe (e.g. 2 kids in one bedroom, some contention for the one bathroom), but “downright cramped” is an exaggeration. I currently live with 3 people in a 1200 square foot condo and it seems plenty spacious. 2000 square feet should be enough for a family of 8 or something.
My godparents’ family lived with a dozen people in a few mud-brick + straw roofed rooms probably totaling 500 square feet, plus some outdoor space between buildings. Now that’s cramped.
> The point of a large home is to turn it into your own personal oasis where you can spend days at a time without ever really needing to leave, and without feeling bored.
In my opinion that is a depressing vain and wasteful way to live. YMMV.
Bedrooms, multiple kids, large spacious bathrooms, an office, a gym, a combined living room/kitchen/dining room open space for hosting parties, and most importantly of all, storage space. That can become 3000 sqft fairly quickly, of which you only use 1000 sqft frequently as a family :D
Do not forget spacious walk-in closets, which are very underrated. Having a boutique-like experience for picking out clothes and a full size mirror to check them out in is a great way to start a day or prepare for a fancy event.
I have a fairly modest house and incorporated a dressing room. Wouldn't be without one in any future house, assuming I could afford/justify it. I would also try for a utility room behind my kitchen for stashing mess as our kitchen gets overrun very quickly when we host people (10+ people reasonably often). Things like home offices, games room, second lounge area, etc quickly take up space.
Maybe I'm missing something but it looks like she omitted general contractor fees unless she rolled them into the sq/ft cost. Not that most people are qualified but I know people who GC the projects themselves to save a great deal of money. It's worth calling out as it's own item...
I found an up and coming architect so my design fees were substantially less than my GC fees... by about 8-10x.
Square foot costs are only given by a GC, so that's already included.
> I know people who GC the projects themselves to save a great deal of money.
Do not do this unless you know what you're doing. One bad contractor (and you will be hiring many) can trash the whole project. The value of the GC is that he brings a stable of quality contractors that he knows and works with.
I've gone both ways, it really depends on the situation.
Any advice on how to find a good GC? All the people I know who remodeled their home seem to have horror stories. A couple of them ended in law suits with the GC.
I had good luck. As mentioned above, finding a good GC is not easy because they do not advertise. It is entirely word of mouth.
I live in the pacific NW where there are a lot of old craftsman style homes. High quality woodwork details is the theme.
I started by calling high end custom furniture shops and asked them if they could do built in cabinetry work. They did not, but they recommended a number of woodworkers that moved on from furniture into contracting (carpentry, custom window sashes, storm windows, etc...).
Then, I asked them what GCs they have worked with in the past and which they would recommend.
A few names came up often, I spoke with them, picked one, and was really happy with the work.
I guess the tl;dr is, good GCs use highly skilled subs, so find the subs then ask which GCs they recommend.
1. Keep talking to people who've finished projects. Eventually you'll get to people who recommend their GC.
2. If you've run out of people to chat up, try going to your city's build permits department and see which builders have been getting permits in the last few years. Not a guarantee of quality, but gives you a list to interview.
3. Ask for referrals from your architect or engineer. And then ask the referrals for references.
But even if you do this, finding a good GC in Silicon Valley is very hard right now.
I tried getting contractors to bid almost a year ago. From 25 calls/emails, I got replies from about 8. Of those, half said some variant of "sorry, too busy to take on new projects right now."
I can't imagine how much crazier it'll be this year with the hotter housing market and the added demand for rebuilding after the fires.
Have you or your friends worked with any contractor that you like and trust? If so start there and work backwards. I happened upon a really good plumber, for example, so now any time I hire any other contractor I call that plumber and ask him whom I should call. So far it's worked out great.
Had a chat with our insurance agent recently; she wants us to increase our insurance coverage on our home in old palo alto, which is currently calculated based on $350/sq.ft. rebuild cost. She said that clients in the burned-out areas in Santa Rosa were being quoted much higher rates, and although she admitted that was partly due to a large number of people competing for contractors all at once, she believes $450 is a more realistic replacement cost basis.
That would be also based on replacing the existing structure, which is single-story, no basement.
What almost always happens when an older house is sold in this area, is that the property sells for between 1M and 2M, is immediately scraped and replaced by a two-story-plus-full-basement (with home theater and au-pair apartment), which then sells for 6M-8M with a profit of circa 1.5M.
So based on that rate I should be able to easily purchase my ~550 sq. ft. apartment. In fact the payments on a 30 year mortgage would be about $1300/month. Clearly the problem is the price of land, made even less affordable because of density maximums. If the price of a lot could be split over 6 people, a lot more people could afford to purchase a house.
Yes but your nimby neighbors won’t allow it. Also high end homes and condos have higher profit margins, this is because finishing costs are cheap relative to sale value.
I've always wondered what software developers make in the heart of silicon valley. I see some things that basically say 'more than Portland but only by maybe 50% or so', which means perhaps $180K or so? Nobody is buying a million dollar house on that kind of income, but in Portland (where I think houses are pretty expensive) someone making $120K wouldn't have any problem buying a perfectly fine place, even pretty close in to the urban core.
Maybe I'm getting my numbers from the wrong place.
Aren't there many more general software developers than there are VP's, founders, and low digit employee exiters?
Like, I'm curious what drives the demand for homes in the ~$2M range in the bay area, if it's not the general software developer who's able to afford it.
From what I understand the insane home prices in SV are also due to a large number of foreign cash buyers coming in and quickly securing deals. Sometimes multiple all cash bids on the same house.
My grandmother's home and my childhood home, both in Cupertino, just sold for upwards of 2.5 mil each to all-cash buyers. I can't verify the foreign money aspect for these sales but people I have worked with who have left the valley in the last few years indicate it is quite common. I left silicon valley nearly 10 years ago now but was born and raised in Cupertino.
I keep hearing the foreign money story, but I can't really find much evidence of it. (I'm currently in SV; touring properties and talking to RE agents nearly every weekend.) I'm not saying it's 0% of the transactions, but I'd be really surprised if it were even 5%.
I'm going to temporarily ignore the "superexpensive" properties, which I'll arbitrarily define as over $4M in SV. That's a different market... for the "global jet-set." Or the people who were the first X employees at a startup with a real liquidity event (and their founders treated them fairly).
Down on the valley floor, $1-3M is within reach of a lot of people in tech, especially double techies. (If you've been here since before the last 2 booms, you've got even more going for you.) Most big tech companies (FANG) stock is way up... Take that as a downpayment... multiple it 2,3, or 4 times and voila.
Markets that have really been hit by foreign money are Vancouver [1] and certain neighborhoods in Los Angeles [2].
Having been to those places (for extended periods of time), I can say SV doesn't feel like those to me.
One last bit of anecdata: I know of one house in SV that received at least 7 offers in the past month. Only 1 of those 7 was all cash foreign money... but they weren't the high bid. 5 other "locals" with loans had higher offers.
What you are saying actually makes sense. A friend who was trying to buy a home once told me, the homes more or less were instantly bought when put for sale on places like redfin, before they(remainder of the crowd wanting to buy) could arrange for mortgage. Indicating that some body had all the cash to make it a straight pay-and-buy deal.
>Like, I'm curious what drives the demand for homes in the ~$2M range in the bay area, if it's not the general software developer who's able to afford it.
The margins. The actual numbers of homes turning over at such prices is miniscule.
Salary varies with experience and size of company quite a lot, but $180,000 is certainly not outside the norm. I think it's possible to buy a $1M house on that income if you save for 4-5 years.
Senior should make 175-200k base plus 100-200k in RSUs per year rolling - that is if you get a good initial grant and keep getting good reviews by year 4 you have staggered vesting that nets that amount. At 300-400k per year you should be able to live a good lifestyle while saving for a house.
Really senior engineers can certainly make more; 500k for a top 10% performer.
For reference I just got my tax statement for last year and I’m over 300k.
I don't think that's what a typical software engineer makes. A Level 5 SWE at Google makes that. But that is far from representative of the vast majority of SWEs.
More likely, you can afford a $1m mortgage on a double income of $150k which, IMO, is a lot more common.
The reality is that a lot of people (single and married with kids) rent with the hopes they will be able to afford a mortgage.
Is it even worth it? It's like buying a car in a city where average commute time is two hours. Diminishing returns, not worth it to have a car under those conditions.
Maybe a different region would have better balance, even at lower pay. I know people who own a newly constructed, large house with a garden, two cars, and raise kids in Romania on a meagre salary compared to yours. In the Bay area most of the profit and hard work goes to pay the exorbitant housing prices - just making the landlords and constructors rich.
Reminds me of Andrew Ng who expects "70-90 hours a week" from his employees, and is talking up "importance of velocity" with his new fund. That's 15 hours of work per day and one day off per week. Crazy! Why bother to do that, it would be a disaster for balanced life. (https://techcrunch.com/2018/01/30/andrew-ng-officially-launc...)
If you buy, you have expenses but any principal payments you make are wealth that you keep. So you can retire to Romania later if you feel like it. Getting paid Bay Area salaries and owning a home is a great way to build wealth even if you ignore the massive price appreciation.
The range of compensation is wide, ie. there is a lot of income inequality among Bay Area software developers. I’d estimate Google, Apple, Facebook alone have a five-digit number of employees or former employees who were there early enough to afford a multi-million dollar home, or who get paid enough now to afford such a house.
There are also some other factors which tend to push up Bay Area home prices. Due to building restrictions, the market for homes is undersupplied. Due to prop 13 and the nice weather, people are less likely to leave even if they don’t need to be here for work anymore. So the market for homes is not very liquid and prices are sort of a one-way ratchet (barring economic meltdown). Really, only the top 10-20% or so of earners are in competition to buy a single family home at all in the area, and that number is shrinking.
Consider a random engineer at Google who bought their home seven years ago for $1M and it’s now worth $2M, while they paid off the mortgage with their RSUs. This person is no bigwig, but they might get approved for a mortgage on a $5M house and afford the down payment no problem.
A $1M loan (at 4%), is just under $60k/year for the mortgage, you also need to pay property tax and insurance, but it wouldn't take you too far off the rules of thumb for a $180k. Of course, $1M doesn't get you much of a house in the south bay. Either a pretty small house with a fairly small lot in an iffy neighborhood with poor schools, or a condo/townhouse with more square feet and nearly zero outdoors space. If you want to live in mountain view, $1M is probably going to get you a small condo/townhouse.
It's a bit tight at the beginning, but since salaries seem to be increasing at a crazy pace, and your housing costs would be locked in, it gets easier in a few years. Or everything goes to hell, and at least California is a no-recourse state, so at worst, you can walk away with ruined credit and no further obligation to pay.
A $180k income with a maxed 401k in California is around $8500/mo in take home. Servicing the mortgage alone would be $4728. With maintenance, insurance, etc. you're pushing 70% of your take-home dedicated to housing. That's not "comfortably."
At that income, $2500/mo would be an unambitious savings target. $2500 minus living expenses, travel, savings for children's educations, etc. would be a pitiful savings rate.
if you are buying a house you are probably a member of a family with two adults and hopefully two incomes. That makes a $1M more realistic.
At least that is the way it works here in Stockholm where $1M houses frequently are bought by people with way lower salary than 180k, often not even 180k combined in the family. However, prices here are very inflated and rates are super low.
Given the constrained supply of houses in south bay, you need only a handful of people with 300-400K+ salaries to justify the home prices.
For example, today there are only 44 homes (3+ bed, 2+ bath) in Sunnyvale [1]. That means you need only 44 successful bids to cover entire Sunnyvale market. Now consider number of E5/L5 SWEs in FB/Google and their equivalents across LinkedIn, Microsoft, Apple etc. Also consider double income couples where one person is somewhat junior with a spouse contributing further to gross family income. Also consider other high paying roles in similar companies like Product Manager, Sales etc. There would be thousands of families passing the bar of 300-400K gross annual income.
It is in fact a surprise that median price of those 44 homes is less than 1.3M [1], given the proximity of Sunnyvale to all these companies. Home prices are really determined at the margins of income distribution and not at the averages.
This is an interesting article that describes building a $2-6 million dollar house in a matter-of-fact manner. I wonder what the prospective audience size for this article is in the Bay Area –maybe less than 5000 local people are capable of affording these properties.
That's a wild underestimate. I'd guess at least 100k people can afford properties like that, unless you mean something like afford it in cash. Even then, it's still an underestimate.
So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks.
How many households are pulling this kind of cash down? Is that a common salary at a big tech company? Maybe for CxOs but not for run of the mill Director-level middle management.
The Bay Area has around 3 million households. The top 1% of households in this area make around 720k or so. So that by itself gets you to 30k households.
Account for the fact that 2 million is much more attainable than 3, and based on income alone you get pretty close to 100k households.
Many people also store their assets in real estate. Add those in (people selling their old house to buy a new one), and you are definitely above 100k households able to afford a 2 million dollar place.
Also, as far as what a typical household making near that much might look like: my personal situation is that I'm a senior software engineer, whose total comp is nothing really exceptional. I'm married to a nurse. Our household income is around 500k. You can easily imagine ways to tweak our careers to put us into the 1% range.
Even as is, we have an attainable 5 year plan to buy a home at the lower end of the listed range without being stupid.
Don't underestimate the number of people out there who are far wealthier than us 9-5 coders—people come from all over the world to buy property on the west coast.
Honestly I think 'those' people dont read hacker news or need a guide on how to do this. It was an interesting post but not for anyone that has built or bought property (anywhere) before.
The comments in this thread focus on senior engineers, but a lot of the big earners I know in the Bay Area aren't engineers--they may be in tech, but senior BD, marketing, product, finance, legal, and especially sales people can all make well north of $300k. At my last company the biggest W2's were all sales people.
I can either spend next 15 years, hoping that tech market doesn't crash again and using my SWE salary to pay off property taxes and mortgage on a crappy SV house, making rent-seekers of all sorts rich...
... or I can pocket the money, and be financially independent when I'm 35-45, and spend rest of my life with family and working on interesting open source/business projects of my choosing.
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[ 3.7 ms ] story [ 39.5 ms ] thread5k would need a 10k lot in palo alto. A 10k lot in palo alto goes for 3m to 5m depending on neighborhood.
So , yes, it's nuts.
More seriously, in general single-family houses should be on the order of 1000–2000 square feet. The rest is typically a complete waste (nobody I know who has a 4000+ square foot house actually uses most of the space – people with real on-site wood shops etc. put them in a separate space detached from their home, not in spare bedrooms), and serves to isolate households from each-other, force a car-centric lifestyle, drive up housing costs for everyone and force people working essential menial jobs to live far away and commute long distances, cost much more public infrastructure than denser alternatives, etc.
I have a several rich programmer friends (early facebook or whatever) who bought outrageously large houses in Silicon Valley as a status symbol, but work all the time, eat out every meal, and only go home to sleep. What a tremendous demonstration of unthinking excess.
You could turn a garage into a wood shop though if you don’t have a particular need to store your car in a garage.
The point of a large home is to turn it into your own personal oasis where you can spend days at a time without ever really needing to leave, and without feeling bored. The thing is, many people just don’t know how to live in a big house, because they spend so much time in cramped quarters until they can afford a home. A big house is all about features. Every room is an opportunity to have a space dedicated for something, if not for sleeping. Mindless excess is dumb, but thoughtful excess is amazing.
The design and layout of a house is so much more important than just the sq ft. I wish more people would focus on that. We have a really well planned out 1500 sq ft. house and we have literally more usable rooms and space than many people I know with houses more than twice the size.
My godparents’ family lived with a dozen people in a few mud-brick + straw roofed rooms probably totaling 500 square feet, plus some outdoor space between buildings. Now that’s cramped.
> The point of a large home is to turn it into your own personal oasis where you can spend days at a time without ever really needing to leave, and without feeling bored.
In my opinion that is a depressing vain and wasteful way to live. YMMV.
I found an up and coming architect so my design fees were substantially less than my GC fees... by about 8-10x.
> I know people who GC the projects themselves to save a great deal of money.
Do not do this unless you know what you're doing. One bad contractor (and you will be hiring many) can trash the whole project. The value of the GC is that he brings a stable of quality contractors that he knows and works with.
I've gone both ways, it really depends on the situation.
I live in the pacific NW where there are a lot of old craftsman style homes. High quality woodwork details is the theme.
I started by calling high end custom furniture shops and asked them if they could do built in cabinetry work. They did not, but they recommended a number of woodworkers that moved on from furniture into contracting (carpentry, custom window sashes, storm windows, etc...).
Then, I asked them what GCs they have worked with in the past and which they would recommend.
A few names came up often, I spoke with them, picked one, and was really happy with the work.
I guess the tl;dr is, good GCs use highly skilled subs, so find the subs then ask which GCs they recommend.
2. If you've run out of people to chat up, try going to your city's build permits department and see which builders have been getting permits in the last few years. Not a guarantee of quality, but gives you a list to interview.
3. Ask for referrals from your architect or engineer. And then ask the referrals for references.
But even if you do this, finding a good GC in Silicon Valley is very hard right now.
I tried getting contractors to bid almost a year ago. From 25 calls/emails, I got replies from about 8. Of those, half said some variant of "sorry, too busy to take on new projects right now."
I can't imagine how much crazier it'll be this year with the hotter housing market and the added demand for rebuilding after the fires.
That would be also based on replacing the existing structure, which is single-story, no basement.
What almost always happens when an older house is sold in this area, is that the property sells for between 1M and 2M, is immediately scraped and replaced by a two-story-plus-full-basement (with home theater and au-pair apartment), which then sells for 6M-8M with a profit of circa 1.5M.
Maybe I'm getting my numbers from the wrong place.
This is the Dir/VP/EVP + founders + high equity;low digit employee id exitors.
Like, I'm curious what drives the demand for homes in the ~$2M range in the bay area, if it's not the general software developer who's able to afford it.
But this home was estimated north of $6M
"The total cost would be $6,562,500."
My grandmother's home and my childhood home, both in Cupertino, just sold for upwards of 2.5 mil each to all-cash buyers. I can't verify the foreign money aspect for these sales but people I have worked with who have left the valley in the last few years indicate it is quite common. I left silicon valley nearly 10 years ago now but was born and raised in Cupertino.
I'm going to temporarily ignore the "superexpensive" properties, which I'll arbitrarily define as over $4M in SV. That's a different market... for the "global jet-set." Or the people who were the first X employees at a startup with a real liquidity event (and their founders treated them fairly).
Down on the valley floor, $1-3M is within reach of a lot of people in tech, especially double techies. (If you've been here since before the last 2 booms, you've got even more going for you.) Most big tech companies (FANG) stock is way up... Take that as a downpayment... multiple it 2,3, or 4 times and voila.
Markets that have really been hit by foreign money are Vancouver [1] and certain neighborhoods in Los Angeles [2].
Having been to those places (for extended periods of time), I can say SV doesn't feel like those to me.
One last bit of anecdata: I know of one house in SV that received at least 7 offers in the past month. Only 1 of those 7 was all cash foreign money... but they weren't the high bid. 5 other "locals" with loans had higher offers.
[1] https://betterdwelling.com/city/vancouver/foreign-buyers-45-...
[2] https://www.bloomberg.com/news/articles/2014-10-15/chinese-h...
The margins. The actual numbers of homes turning over at such prices is miniscule.
Really senior engineers can certainly make more; 500k for a top 10% performer.
For reference I just got my tax statement for last year and I’m over 300k.
More likely, you can afford a $1m mortgage on a double income of $150k which, IMO, is a lot more common.
The reality is that a lot of people (single and married with kids) rent with the hopes they will be able to afford a mortgage.
Maybe a different region would have better balance, even at lower pay. I know people who own a newly constructed, large house with a garden, two cars, and raise kids in Romania on a meagre salary compared to yours. In the Bay area most of the profit and hard work goes to pay the exorbitant housing prices - just making the landlords and constructors rich.
Reminds me of Andrew Ng who expects "70-90 hours a week" from his employees, and is talking up "importance of velocity" with his new fund. That's 15 hours of work per day and one day off per week. Crazy! Why bother to do that, it would be a disaster for balanced life. (https://techcrunch.com/2018/01/30/andrew-ng-officially-launc...)
There are also some other factors which tend to push up Bay Area home prices. Due to building restrictions, the market for homes is undersupplied. Due to prop 13 and the nice weather, people are less likely to leave even if they don’t need to be here for work anymore. So the market for homes is not very liquid and prices are sort of a one-way ratchet (barring economic meltdown). Really, only the top 10-20% or so of earners are in competition to buy a single family home at all in the area, and that number is shrinking.
Consider a random engineer at Google who bought their home seven years ago for $1M and it’s now worth $2M, while they paid off the mortgage with their RSUs. This person is no bigwig, but they might get approved for a mortgage on a $5M house and afford the down payment no problem.
It's a bit tight at the beginning, but since salaries seem to be increasing at a crazy pace, and your housing costs would be locked in, it gets easier in a few years. Or everything goes to hell, and at least California is a no-recourse state, so at worst, you can walk away with ruined credit and no further obligation to pay.
30% of $8500 is $2500. You can live very comfortably on $2500 a month if all your housing costs are taken care of.
At least that is the way it works here in Stockholm where $1M houses frequently are bought by people with way lower salary than 180k, often not even 180k combined in the family. However, prices here are very inflated and rates are super low.
For example, today there are only 44 homes (3+ bed, 2+ bath) in Sunnyvale [1]. That means you need only 44 successful bids to cover entire Sunnyvale market. Now consider number of E5/L5 SWEs in FB/Google and their equivalents across LinkedIn, Microsoft, Apple etc. Also consider double income couples where one person is somewhat junior with a spouse contributing further to gross family income. Also consider other high paying roles in similar companies like Product Manager, Sales etc. There would be thousands of families passing the bar of 300-400K gross annual income.
It is in fact a surprise that median price of those 44 homes is less than 1.3M [1], given the proximity of Sunnyvale to all these companies. Home prices are really determined at the margins of income distribution and not at the averages.
[1] https://www.redfin.com/city/19457/CA/Sunnyvale/filter/min-be...
How many households are pulling this kind of cash down? Is that a common salary at a big tech company? Maybe for CxOs but not for run of the mill Director-level middle management.
Account for the fact that 2 million is much more attainable than 3, and based on income alone you get pretty close to 100k households.
Many people also store their assets in real estate. Add those in (people selling their old house to buy a new one), and you are definitely above 100k households able to afford a 2 million dollar place.
Even as is, we have an attainable 5 year plan to buy a home at the lower end of the listed range without being stupid.
I can either spend next 15 years, hoping that tech market doesn't crash again and using my SWE salary to pay off property taxes and mortgage on a crappy SV house, making rent-seekers of all sorts rich...
... or I can pocket the money, and be financially independent when I'm 35-45, and spend rest of my life with family and working on interesting open source/business projects of my choosing.
Tough one.