In the San Francisco Bay Area, renting is considerably cheaper than buying at current home prices and interest rates. For example, I just moved into a two-bedroom apartment in San Ramon, roughly a 45 minute drive northeast of Silicon Valley without traffic, for $2720/mo in rent. By comparison, a Zillow search shows two-bedroom condos in San Ramon ranging from $559,000 to $875,000. With a 20% down payment of $111,800 on the $559,000 place, assuming excellent credit and an interest rate of 6.03%, the monthly bill for a 30-year fixed-rate mortgage, including taxes, insurance, and HOA dues, is estimated to be $4,077/mo, where there is a $651/mo HOA fee. It’s a big leap going from $2720/mo to $4077/mo, and this is for the absolute cheapest condo in town.
I’d love to own my own place, but it’s extremely expensive in the San Francisco Bay Area. Personally the best I could hope for is commuting from an exurb like Tracy or Fairfield. However, while rents are very high here in the Bay Area, they are still considerably lower than mortgages for similar homes.
Exactly. When people complain about not being able to afford a house in a place like the Bay Area or Manhattan, it's like saying you can't afford a car because Ferraris cost a fortune. Buy a different car.
Because that's where many good paying jobs are. If I buy a home in a lower cost of living area, and my employer decides to do away with remote work, I may not be able to find another job that can pay the mortgage even though it is in a cheaper area.
A house in a cheaper area may not require a Bay area salary to cover the mortgage. If employers did away with remote work, getting a job that pays less but doesn't require moving can be a viable choice but it is all a matter of lifestyle choices and priorities.
Sure, it almost certainly won't unless you buy a mansion. However, a job is still required to pay a mortgage, save for retirement, have health insurance, and cover living expenses. In a lower cost area, there are fewer job opportunities. If I spend 40+ hours a week at my job, I'd prefer it to be a job where I don't spend my days looking at the clock waiting for the day to be over every single day.
1. My family is from Northern California. I grew up in Sacramento, and my family still resides there. I spent all of my life in California except for eight months in Japan and three months in Seattle, both for internships.
2. I have a tenure-track faculty position. Academic jobs are hard to come by and are competitive to get.
3. The Bay Area’s tech opportunities are unparalleled. Even though I’m no longer working in industry, I can still take advantage of summer consulting roles as an academic, and I also can easily reach out to various companies for other academia-industry partnerships. I can easily keep up to date with the latest technological developments through local Meetup groups. Resources like the Computer History Museum are commutable to me. If I want to start a small tech company, I have plenty of networking opportunities.
4. The Bay Area is culturally diverse and has a high level of acceptance of ethnic minorities.
5. As someone who travels to Japan twice a year, it’s convenient being a sub-$100 Uber or Lyft ride away from a major international airport with direct flights to my choice of Tokyo airports (Narita or Haneda).
6. There are many cultural amenities in the Bay Area. If I want to see a concert from a world-famous musician, chances are high that he or she will be stopping in the area. I can choose between plenty of museums and performance halls.
7. I know this is cliché, but it’s hard to beat California coastal weather.
8. Wonderful Asian food!
I thought about leaving the Bay Area earlier this year. While it’s very expensive and while I’ll never be able to afford to buy a home on my professor salary alone, as a lifelong Californian I don’t know if I’d be happier somewhere else. Sure, I could afford a home in the South, the Midwest, or another part of the country with low housing costs, even with a 30% pay cut, but I’d give up many of the things that I’m accustomed to in California. I love Seattle, but it is also expensive. I could see myself living in Japan, but the weak yen plus lower salaries and less vacation time (compared to American academics) are major downsides for me.
Thus, I remain in the Bay Area, though I’m actively searching for side business opportunities so I could find a way to increase my income so that way buying a home would be achievable.
It's not for no reason. Renting will always be more expensive because the home owner maintains the house. When you buy it, it's assumed that you'll maintain it yourself. So it costs less. Naturally, as is entirely expected.
Perhaps housing shouldn't be market determined, but considered essential habitat.
I didn't get any further with this train of thought, but i thought of smarmy shiny-clothed grifty realtor types worrying about the placement of a fridge in a mcmansions kitchen, and how so much of interior design has become ikea airbnb style for flipping rather than living in.
Perhaps turning houses into status symbols instead of shelter has a down side.
I suspect mortages are a relatively recent invention, and that this is why moneyed families had grand houses and poorer folk had self-built hovels a century ago.
The cost of homes and renting a home have seemed to go up disproportionate to wages.
However, I know young couples who have purchased small homes. And I wondered why or how it differs from couples who haven’t or say they can’t.
One observation I’ve made is that the people who haven’t also follow a pattern of delaying getting married and having kids. Instead opting to have a more vibrant night life and consuming a lot more social media with the time granted by not having children.
I thought, perhaps the driving factor to prioritize owning a home has gone missing. Especially once you have a kid, owning vs renting becomes a lot more important for reasons such as stability and setting down roots for their school.
I think the younger couples I know who have started families and purchased a home may have simply prioritized it - they don’t say it was easy but it’s obviously possible.
Getting married and having children is expensive. If you have the money to do those things, you are more likely to be someone who can also afford a home sooner than others. It's not a matter of widespread personal preference, that's ridiculous.
Honestly, this sounds like the sound bites I’ve seen on social media.
Getting married is definitely not expensive. In Ohio it costs $30-$70. And you can have an affordable reception.
If you’re talking about a reception you can’t afford - sure. But that’s your own decision. And if that’s your reason to not get married then that I can see how that line of thinking extends to “I can’t afford to buy a house”.
I have 4 kids. They aren’t free but they are totally affordable. I’m really not sure what you are saying - the vast majority of 35+ year olds DO have kids and afford it.
Few days ago I've read such a fascinating article. It mentioned that more and more boomers start to love together, renting a flat or house with friends or just random people - also because of rising living costs. so this dream is lost for older gens as well.
Home ownership makes for a pretty lousy dream. If I were in charge of society, "get stuck living in a single place for a long time, burdened by debt, dealing with endless, tedious maintenance work" would not be my choice of an ideal way to build wealth.
24 comments
[ 4.5 ms ] story [ 69.2 ms ] threadI’d love to own my own place, but it’s extremely expensive in the San Francisco Bay Area. Personally the best I could hope for is commuting from an exurb like Tracy or Fairfield. However, while rents are very high here in the Bay Area, they are still considerably lower than mortgages for similar homes.
2. I have a tenure-track faculty position. Academic jobs are hard to come by and are competitive to get.
3. The Bay Area’s tech opportunities are unparalleled. Even though I’m no longer working in industry, I can still take advantage of summer consulting roles as an academic, and I also can easily reach out to various companies for other academia-industry partnerships. I can easily keep up to date with the latest technological developments through local Meetup groups. Resources like the Computer History Museum are commutable to me. If I want to start a small tech company, I have plenty of networking opportunities.
4. The Bay Area is culturally diverse and has a high level of acceptance of ethnic minorities.
5. As someone who travels to Japan twice a year, it’s convenient being a sub-$100 Uber or Lyft ride away from a major international airport with direct flights to my choice of Tokyo airports (Narita or Haneda).
6. There are many cultural amenities in the Bay Area. If I want to see a concert from a world-famous musician, chances are high that he or she will be stopping in the area. I can choose between plenty of museums and performance halls.
7. I know this is cliché, but it’s hard to beat California coastal weather.
8. Wonderful Asian food!
I thought about leaving the Bay Area earlier this year. While it’s very expensive and while I’ll never be able to afford to buy a home on my professor salary alone, as a lifelong Californian I don’t know if I’d be happier somewhere else. Sure, I could afford a home in the South, the Midwest, or another part of the country with low housing costs, even with a 30% pay cut, but I’d give up many of the things that I’m accustomed to in California. I love Seattle, but it is also expensive. I could see myself living in Japan, but the weak yen plus lower salaries and less vacation time (compared to American academics) are major downsides for me.
Thus, I remain in the Bay Area, though I’m actively searching for side business opportunities so I could find a way to increase my income so that way buying a home would be achievable.
Where I live though, ownership only costs a little too much and renting costs WAY too much
It's not for no reason. Renting will always be more expensive because the home owner maintains the house. When you buy it, it's assumed that you'll maintain it yourself. So it costs less. Naturally, as is entirely expected.
I didn't get any further with this train of thought, but i thought of smarmy shiny-clothed grifty realtor types worrying about the placement of a fridge in a mcmansions kitchen, and how so much of interior design has become ikea airbnb style for flipping rather than living in.
Perhaps turning houses into status symbols instead of shelter has a down side.
I suspect mortages are a relatively recent invention, and that this is why moneyed families had grand houses and poorer folk had self-built hovels a century ago.
However, I know young couples who have purchased small homes. And I wondered why or how it differs from couples who haven’t or say they can’t.
One observation I’ve made is that the people who haven’t also follow a pattern of delaying getting married and having kids. Instead opting to have a more vibrant night life and consuming a lot more social media with the time granted by not having children.
I thought, perhaps the driving factor to prioritize owning a home has gone missing. Especially once you have a kid, owning vs renting becomes a lot more important for reasons such as stability and setting down roots for their school.
I think the younger couples I know who have started families and purchased a home may have simply prioritized it - they don’t say it was easy but it’s obviously possible.
Getting married is definitely not expensive. In Ohio it costs $30-$70. And you can have an affordable reception.
If you’re talking about a reception you can’t afford - sure. But that’s your own decision. And if that’s your reason to not get married then that I can see how that line of thinking extends to “I can’t afford to buy a house”.
I have 4 kids. They aren’t free but they are totally affordable. I’m really not sure what you are saying - the vast majority of 35+ year olds DO have kids and afford it.
To be fair my view is lousy too. Owning the house just means slightly less badness, not elimination