I think that maybe more accurate for entry level developers. Housing is an issue to work around for sure.
Seattle - Yes (but also quite expense)
Austin - Yes to a less degree
Portland - Maybe.
All of these are great cities with plenty of dev jobs. You really need a strong CS program to build around if you want think about not moving to Silicon Valley. University of Washington totally fits that bill, as does University of Texas- Austin, but I would have to guess that Portland has a good local university (but I'm not familiar with it from afar like the others)
Seattle has the highest income of any city in the USA at $94,000 a year. And we just got the $15 minimum wage.
Portland has good programs and an OK tech scene. A lot of them are poached/contracted by Seattle firms, since it can be cheaper to pay for a contractor's hotel than it can be to hire a local. The wage differential is that big between the cities.
Not quite. Demand is going up faster than supply. Add in rent control and other local oddities, and you get some absurd situations, ike perfectly qualified people leaving the area.
My rent is about 40% of the going rate for the identical apartment above mine. This has several consequences. I literally cannot afford to move. For another, it would be difficult to fit another child in the place we have, so we're not having one. And it's more difficult to hire people from outside the area because they can't find affordable places to live.
This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability. I just don't have $10k+ in the bank to act as an acceptable safety net for the rent, security deposit, moving fees, tickets, etc.
I'd try to do a van-plus-PO-Box-plus-health-club situation but my girlfriend would probably never go for it.
> This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability.
There are more affordable places (still expensive, but less so than SF/Silicon Valley) within reasonable commute distance of the core of the Bay Area. If you've got good bay area job prospects, you might consider initially living on the peripheries until you can build up a cushion that lets you move further into the core.
Both relocation payments and corporate apartments are things that are within the bounds of reality. I've know firms that do each, I've know people that have received relocation with new jobs as recently as this year.
They may be relatively uncommon. They may not be offered by the companies you are interested in. They may not be things that people you know have received and told you about. But they are definitely not "beyond the bounds of reality".
The "forget having a kid" in San Francisco thing is a serious issue. If you have rent control, great. But if in 5-10 years you want to have a family, it's not like you're going to be able to move to an apartment whose price is equal to:
((current rent under rent control from 10 years ago)/(current number of rooms))(current number of rooms + 1)
Instead it's going to be:
(current number of rooms + 1)(current rent per room in SF when you decide to move)
In other words, if you don't lock in an extra room now and sublet it until you decide to start a family, then you're shit out of luck.
It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.
One question, that isn't often discussed, is how many homes are bought to live in vs. bought as investments and rented. Either way, monthly mortgage or rent is going up, but I wonder how much of the movement in the market is due to real estate investors vs. home owners.
I imagine the insight would reveal the disparity in the commitment to the area versus the "gold rush" aspects of the Bay Area. It has many implications on the housing market, corporate recruiting, local politics, and infrastructure development. I imagine people would behave much differently if there more space and a strong belief that they could actually raise a family in the area or if it's just a career kickstarter. There are many competing and complicating factors, but it's still very interesting information.
Yup. Interestingly, my brother works in NYC staging the most expensive apartments in the city in preparation for sale. The last apartment he staged sold for something like $12.5 million. I don't think anyone is going to actually live in in.
More and more, NYC, London and SF are the real estate equivalent of buying gold, but way more profitable. The most interesting thing about this property my brother recently staged is that it was on the market for about $5-6 million until just before the 2008 crash. After the crash, it and many many apartments just like it skyrocketed in value as the economy crumbled. Basically lots of very very rich people, often Russian and Chinese, but not exclusively those nationalities, expatriated money to SF, NYC and London to buy real estate as a relatively safe store of value.
A good friend of my father (who lives in Brazil) is worth several hundred million and he owns an apartment in NYC worth several million that no one lives in. Between he and his family, they probably use it for at most one month per year.
That only counts for part of the problem. Something like 5-10% of the SF housing stock to which rent control laws is applicable is kept off the market because landlords prefer not to deal with the hassle of tenants rights. I forget the exact figure.
The people who have the talent necessary to change the world, and the people who can afford to buy real estate in SF are two sets with a small intersection. Both are small sets on their own, and the correlation of membership is probably pretty close to zero (being talented makes you more of a candidate for material success in some ways, and less of one in others, so the net effect is probably zero) so you'd imagine a tiny intersection.
It's not that "nobody goes" because it's too crowded. It's that the people you want don't go because it's too crowded with people you don't.
People who are less willing/able to pay high Bay Area real estate prices, such as people with modest incomes and children, are fleeing. Other people, who are more willing/able to pay high real estate prices, likely due to high wages and low demand for living space, are moving there.
Those of us in tech probably know more of the latter.
But when compared to similar searches historically, you can draw conclusions from the trend.
If one assumes a similar historical probability between looking for a house and buying a house, it follows that if more people are looking for houses outside of SV, more people are also buying houses outside of SV.
At the very least, it shows that people in SV are more interested in housing markets outside of SV today than they were a few years ago, even if they don't move there.
London has a similar issue with house prices / rents continuing to rise much faster than the rest of the UK.
I relocated from London to Barcelona 3 years ago to do remote freelance work. The cost of living is lower here with a good quality of life. There is lots of interesting work in London and its a good place to gain experience but I've got no plans to go back.
And unlike Silicon Valley, same salaries are still being offered. Hopefully exiting EU will ease the pressure and make the competition for talent more healthy.
I live in Austin, TX and had 3 job offers earlier this year in Silicon Valley. I turned all of them down because of the high cost of living.
I have 3 children and a wife that I support. Even with the high wages offered from Facebook or Google, our quality of life in Austin was far better than it could ever be in Silicon Valley.
Same reason my wife and I moved to Florida. I can live within 2-3 miles of the beach in a 4K sq ft home for $100K-200K (depending on level of fanciness).
I can work remotely from anywhere; why would I artificially lower my quality of life to live in SF proper as long as remote work exists?
I've been contemplating a move to FL for some time now except that I don't know much about the place other then a few times I've visited. What counties would you recommend for IT folks?
I'm in Central Florida (Tampa/St Pete area). I never look at the local job market, as its not the type of work I do (either finance or healthcare mostly).
IT is taking off in the Tampa/Orlando area, and Miami has a bit of a startup scene that's coming up to speed.
I suggest spending a couple weeks in the area, drive around, see what you like and what you need to live near (I don't have kids, but when I do, I'm home schooling. I work remote, so a commute does't matter. My housing selection was based solely on recreation, or rather, where I could park my sailboat).
Because Florida? Unless there is some island of sanity lurking in central Florida that I don't know about (and yes, I have been to St. Pete a number of times due to having family there), it's difficult to look past the massive increase in Dealing with Crazy People that would follow a move from SF to there. I actually like Florida (probably a lot more than your average Bay Area denizen) but the lifestyle tradeoff is a lot more complex than you are making it out to be.
I lived in SF, then moved to Athens, GA for 6 years, then back to SF. I have a lot more disposable income in SF because while my rent doubled, my salary tripled. On top of that, anything with an MSRP set at a national level (cars, bicycles, guitars) is a much, much smaller percentage of my monthly income. On top of that, I can contribute 3x as much to my retirement as I did before. It's win/win/win.
Eh, that's reasonable from Athens, GA (I spent ten years in Atlanta, and have some familiarity with the market in GA). Moving from Atlanta to Seattle doubled my total comp (and definitely did NOT double my CoL). Staying in Seattle and moving from one giant tech company to another doubled it again, so another part of it comes down to who's really willing to pay for talent.
While I get your point, I'm not sure Athens is the best example. Athens is a college town that's both too close and too far from the Atlanta metro area to really see many companies invest in it.
Alpharetta, for example, is an hour away from Athens, closer to the City of Atlanta, has a heavy tech presence, and a median household income approaching $100k in a state with a median income half that.
It's more expensive than Athens, yeah, but it's also not Silicon Valley expensive.
I lived in Athens until recently. I work in Atlanta now, but I don't doubt you had such a big pay jump. When I looked (very briefly) at tech jobs in Athens they were all around 50-60k for senior positions (not much of a selection either obviously). Of course you can also get a 3k sqft house for under $200k around there.
I grew up in the South Bay, lived in San Francisco for many years and the East Bay for a handful of years...overall I was in the area for 36 of my 42 years. Late last year I realized the Bay Area has become too much...too much money, too crowded, too annoying, too aggressive, too dirty (SF at least). My wife and I sold our house, made a healthy profit and moved to Colorado.
While we can make all sort of arguments and analysis on the cost of living, what did it for me was exactly what you stated..."quality of life". Being in software many of us are fortunate enough to be able to live in the most expensive area in the country. However, it doesn't do a damn bit of good when you're miserable due to all of the traffic, crowds and annoying people who surround you.
Being a native I never thought I'd leave. Now, I'm confident I'll never go back...our quality of life is so much better here in Colorado. I would never suggest anyone move there unless they were single, in their 20's and in the technology space. For that group of people, it'd be a great experience. For us older family types, unless you're a total city person, the area sucks the life out of you.
Just allow room for different points of view. I grew up in Colorado and became suffocated by the intense desire for "quality of life" -- it felt like the only people that moved to Colorado to be the best at what they do were in extraction industries. After having left (fled) Colorado for school, I moved out to Silicon Valley 20 years ago, and have since settled in the East Bay (where we have three school-age kids) -- and I will live here as long as the industry's epicenter is here.
I think it's great that you're happy in Colorado, and there's certainly a lot to love about the state (go Broncos!) -- but definitions of "quality of life" vary, and some might actually include some of the things that you didn't/don't like about the Bay.
At around $150k/yr, a bank will typically lend around $350-400k (more would be imprudent, even if the bank agrees). So even with two people working and making a decent, probably average wage for SV, it's still impossible to buy a median home there. Of course people are leaving.
Yes, but then your payment is $4-5k a month, more than half of what you're bringing home every month. That's not really feasible and a terrible financial situation to be in.
At higher income levels, it really doesn't matter if you are spending 1/2 of your income on your home. If I'm making $200K/year, that gives me ~$8K of spending power per month for my home and ~$8K, pre-tax, for other things. If the market is going up, long term, then buying a house is a good investment vehicle for your money. It's also a writeoff on your taxes. That said, my response was targeting the comment about what a bank would loan you at a given salary, not whether it was a good idea or not. :)
Yeah, and the other thing is that the square footage of a "median" home and its lot size also varies greatly between these places. Not only are homes cheaper outside SV, they're also usually bigger and sitting on bigger lots. So it may be even worse than it sounds.
It sounds like they'll go up to 43% for a "jumbo loan" (thats not just mortgage), and according to the article, it can go higher if the buyer is strong in other ways.
With interest rates for jumbo mortgages probably a bit above 4%, that would leave a two income household with 200-300K in income enough to purchase the median priced house.
I'm not saying it's an appealing idea, just that it isn't impossible.
Great except for the noncompete contract shoved down your throat be Texas employers. I won't work for any employer who won't waive a noncompete contract. This means California or a couple of other states. More states need to make noncompetes illegal.
That's brilliant. Does anybody publish such stats? Seeing salaries measured in houses-per-year for different areas would communicate cost-of-living viscerally.
Some sort of housing adjusted salary would be valuable. But simply as a percentage type thing might miss the way people experience expenses.
Think about it this way. Suppose you make $30,000 a year, and your housing costs are $10,000 a year.
Now suppose you make $200,000 a year, and your housing cost are $100,000 a year. Aside from that, prices in the higher cost area are maybe 10-20% higher.
You might actually have more disposable income in the second scenario, along with more opportunities to enjoy it. This is why I think SF is still a pleasurable place to live for people who substantially exceed a certain threshold. That threshold is very high, though.
Another tongue-in-cheek metric we like to joke about is Nobel prizes/house, i.e. how many Nobel prizes you would have to win to afford a home.
Recent Nobel prize award was about $1.2 million. Median prices in Palo Alto is about $2.4 million so the affordability is 2.0 Nobel prizes / house in Palo Alto.
The caveat is that you have to be a solo prize winner, otherwise the award amount will be split.
FWIW a lot of renters don't pay those prices. If you are buying a house, you are going to have to pay full market value. However, the rental market has different influences, because of widespread rent control and the fact that property taxes are based on the price of the sale (which is way lower than market value for any property owned for more than 10 years). This isn't necessarily good for a multitude of reasons, but it means a large percentage of renters are not paying skyrocketing prices.
Rent control drives rents up for the people who aren't part of the program. Because real estate is so price-inelastic and market rents go up by a much larger percentage than is affected by the rent control, landlords as a group actually make more money under RC. The landlords who own RC apartments may lose in the deal, but landlords whose apartments aren't affected end up winning.
Purchase prices of 40+ years' rent signify a mix of speculation, regulatory corruption, trophy buying, and weird beta effects (i.e. amplified correlations with the national market). For example, Manhattan real estate has a beta of about 3.0, which means that a 50% swell in national prices drive Manhattan real estate up by 3.375x.
It is very complicated, and I'm not suggesting that rent control is good. I'm just saying there is a difference between buying a house in the bay area vs living in the bay area. Right now, the former is insanely expensive, whereas in some situations the latter is not. The article I linked does a great job of explaining the history and various problems and tradeoffs.
I don't know what you're talking about. Renting here is insanely expensive. I pay $1500 for a tiny room in the tenderloin, subletting from a friend who is paying $2900 for the place. It's a small two bedroom with no common space; just two rooms, a small kitchen and a small full bath. Studios in this neighborhood start around $2200.
When I live in São Paulo, Brazil (which isn't exactly cheap and going out can be as expensive if not more expensive than San Francisco), my dad and I split the rent on a 2700 ft^2 penthouse duplex with 4 bedrooms, 3.5 baths, deck with barbecue pit, dining room, living room, family room. It was one block from Avenida Paulista on Alemeda Campinas. We each paid around $1300 to cover rent and the building fees.
San Francisco is stupidly expensive. The landlord trolls sue to block every single possible development that could alleviate the housing problems because it allows them to earn increasingly more from their real estate with little to no additional capital investment.
San Francisco rents are bad. San Francisco purchase prices are balls-out disgusting: 30 to 50 years' worth of rent. Typical in the US is 15, and that's only because of the mortgage interest tax credit (which drives purchase prices about 30-50% higher than they otherwise should be).
Buying at current levels would only make economic sense if you expected rents to keep going up. Right now, buying is a bad move unless you expect the extreme rent situation to worsen (rather than mean reverting) in the long term (20-30 years). Given that it'd take just one genuine progressive mayor to crush the NIMBYs and allow new development, I think that that's a bad bet.
> Given that it'd take just one genuine progressive mayor to crush the NIMBYs and allow new development
Well, in an alternate reality where the City and County of San Francisco is a mayoral dictatorship (and using a suitably special definition of "progressive", though that's somewhat tangential) this might be true.
Of course, in that alternate reality, you'd still need the mayor with that preference to somehow get elected in San Francisco, which might require even a bigger divergence from the universe we live in than San Francisco having the kind of political structure which would empower a mayor alone to impose the changes you describe.
There's a phenomenon in older apartment buildings on Captiol and First Hills where a large number of renters are barely able to pay rent, or are already past that point and have stopped paying rent. Evicting them just means adding to Seattle's homeless population (the other 1%).
This doesn't apply to the shiny new condo you'd be living in. It applies to the ugly, squat, 95-year-old brick apartment building across the street.
If my rent became unaffordable, that would be unfortunate and inconvenient. But I think rather than choosing to become homeless I would move somewhere else where I could afford it.
You're probably basing this prediction of your actions on your optimistic worldview, your resources, employment, and your connections. Some people only start with half of that, and don't know what to do when it starts slipping away.
And what do you do if your neuroprocessor isn't powerful enough to get you a good job in the first place? If you worked hard but couldn't become more than just a laborer? If you've never been able to afford even a car? Then suddenly you lose your job but your landlord doesn't kick you out.
Not surprised at all that this trend is starting to get big enough for news outlets to finally notice.
Only once I moved to small town did I realize how much my quality of life was degraded by the long commutes, the over crowding, and the general scramble for access. Now I have 10min commute, up to 20min driving for any errands or shopping, and can't imagine moving back to the traffic jungles of a major city anytime soon. Especially since an average large townhouse in my neighborhood goes for $250K compared to $400-600K in Chicago.
It used to be that in small town America the only decent technology job you could get is by working remotely, or through the local university. Perhaps I got very lucky, but my current company[1] works with the biggest global companies, and I get to ship more software and work with much more diverse technology (most in the mobile space) than in my previous 10 years combined.
All I'm saying is that if are frustrated with Silicon Valley, or any other big city, don't assume that is your only option. I was pleasantly surprised when I landed in Charlottesville, VA.
[1] Its called Willowtree, and we are hiring, but I don't mean this to be recruiting spam, so look it up if you're interested.
But but but you're destroying the Earth by wanting to live in a peaceful small town where you have to drive to go shopping rather than taking public transit everywhere!
/sarcasm
To be serious, though, threads about various transit innovations tend to be dominated by people who strongly prefer urban living and can't imagine why anyone would want anything else. Your case study is a nice example of why there are good-natured people (engineers even!) who simply prefer a different style of life. It doesn't prove that there are no externalities to suburban living (nor urban living), but we should all remember to be thoughtful that different people may actually enjoy different lifestyles.
The Silicon Valley lifestyle, and the long commutes it engenders, aren't remotely 'urban living'.
Charlottesville, VA is likewise more of a small city than a small town, where it's perfectly practical for people to walk and bike to commute and do errands in the older neighborhoods. Probably more so than in much of Silicon Valley, in fact. That's because walkability is as much a consequence of development style as urban scale, and much of Charlottesville was built out before than automotive era.
Exactly. The US has virtually no surviving "urban" cities, where one can comfortably walk and bike wherever they need to go. (Much less enjoy the population density to support local coffee shops, niche stores, etc.) We have New York, Boston, DC (sorta)... Philadelphia? Maybe Chicago?
Even San Francisco can barely be called urban. It's absolutely dominated by automobile traffic, especially outside the tiny downtown core. I've never seen such fast-moving traffic on such wide streets in a city ostensibly hailed as walkable. Typical SF buildings are 2-3 stories at most, nearly all have attached garages or parking, and transit is hilariously awful.
Much less Silicon Valley. It's... suburbia. Try to walk from Google's HQ to Apple's. Try to walk anywhere, really, outside of a narrow strip near Stanford. What exactly does the OP feel is urban about Silicon Valley's car-dependent zoning?
I did a back of the envelope calculation on how much salary it would take to get me to move my family to Silicon Valley. The answer was "7 figures". Granted, part of that was due to the fact that my wife would have to recertify to find work, but it was still eye opening.
"Bring your tool belt, this property needs some TLC! Great location, this property has much potential! Close to schools, shopping, and freeway access."
Granted, what was there was nice enough (all 1100 sq/ft of it), but over $1M for a 2/1 ... it's just insane right now. It was listed for $749k. The overbidding situation seems to regularly bring in multiple (as in 10-20) offers for a house.
New borrowing rules went into effect that reduce the amount that can be borrowed for a given income. As interest rates rise, the approvable loan amount will be trimmed still further. Even if you have stock winnings, most people still need to borrow to buy a home. So buyers are looking at a declining amount that they can bring to bear in the market.
However, sellers conditioned on ever rising prices aren't willing to accept lower prices just yet. Some are starting to reduce prices, but recently there have been multiple homes that don't sell and then quietly roll off the market in the 'hot' areas.
Thus there is a market standoff, and buyers who want a house realize they can simply not afford a house here. Some react to that by leaving, a trend that is accelerating.
It will be interesting to see what happens as interest rates go up, and reduce borrowing amounts still futher. If the future will bring a decline in prices or long-term stagnation - it's anyone's guess.
Exactly. $200k is a pretty decent windfall for most folks, which conveniently just happens to match up with the 20% down payment for your median priced house. Down payment is the "hard part" of buying a house in the Bay Area, not so much the salary.
As a tabletop gamer, I want to see the disparity as an advantage rather than a disadvantage. If typical cost of living drives up wages by even just a 1.5-2x multiplier, you can min-max with lifehacks by, say, living in a van and making that into a disproportionate increase in savings retention, giving you a shorter runway to escape wage slavery.
Of course, if your desired end-game doesn't include escaping the paycheck cycle, it is really a wash anyway.. so you may as well go where the fun jobs are.
So is there any chance that the giant tech companies will band together to lobby local governments for measures that will improve living situations and transportation? Because if all they do is upping salaries (which is doubtful to continue indefinitely) all they do is empower landlords to keep charging higher.
Right, which is why I'm saying tech companies- huge economic producers (and tax payers)- should use their influence to lobby for such measures. It's a hard sell until someone with the means gets into the ring and starts fighting for it.
FWD.us agitating for immigration reform for potential future employees should take a backseat to lobbying for improving local living conditions in the Bay for current employees who already live in the Bay.
The management in these firms most likely have personal property in the Bay Area. They will like to keep it just as sparse as it is now. So, don't hold your breath for this to happen.
I briefly evaluated a move to Silicon Valley. But after calculating that I was going to pay twice as much for half as much house, quadruple my commute, and have to send my kids to a lower quality (or private) school; the decision was made for me. My rough estimate was that I'd have to make about $300K/year to make it worth it.
Instead I'm enjoying the vibrant and feverishly growing tech community of Charleston, SC and the quality of life advantages that come with living in Conde Naste's #1 rated travel destination.
I suspect as housing costs in the Bay Area continue to rise, an increasing number of engineers will come to the same conclusion.
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[ 12.3 ms ] story [ 157 ms ] threadSeattle - Yes (but also quite expense)
Austin - Yes to a less degree
Portland - Maybe.
All of these are great cities with plenty of dev jobs. You really need a strong CS program to build around if you want think about not moving to Silicon Valley. University of Washington totally fits that bill, as does University of Texas- Austin, but I would have to guess that Portland has a good local university (but I'm not familiar with it from afar like the others)
Portland has good programs and an OK tech scene. A lot of them are poached/contracted by Seattle firms, since it can be cheaper to pay for a contractor's hotel than it can be to hire a local. The wage differential is that big between the cities.
It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.
My rent is about 40% of the going rate for the identical apartment above mine. This has several consequences. I literally cannot afford to move. For another, it would be difficult to fit another child in the place we have, so we're not having one. And it's more difficult to hire people from outside the area because they can't find affordable places to live.
I'd try to do a van-plus-PO-Box-plus-health-club situation but my girlfriend would probably never go for it.
There are more affordable places (still expensive, but less so than SF/Silicon Valley) within reasonable commute distance of the core of the Bay Area. If you've got good bay area job prospects, you might consider initially living on the peripheries until you can build up a cushion that lets you move further into the core.
They may be relatively uncommon. They may not be offered by the companies you are interested in. They may not be things that people you know have received and told you about. But they are definitely not "beyond the bounds of reality".
((current rent under rent control from 10 years ago)/(current number of rooms))(current number of rooms + 1)
Instead it's going to be:
(current number of rooms + 1)(current rent per room in SF when you decide to move)
In other words, if you don't lock in an extra room now and sublet it until you decide to start a family, then you're shit out of luck.
One question, that isn't often discussed, is how many homes are bought to live in vs. bought as investments and rented. Either way, monthly mortgage or rent is going up, but I wonder how much of the movement in the market is due to real estate investors vs. home owners.
Or bought as investments and not rented out (I hear a lot of anecdotes about this).
More and more, NYC, London and SF are the real estate equivalent of buying gold, but way more profitable. The most interesting thing about this property my brother recently staged is that it was on the market for about $5-6 million until just before the 2008 crash. After the crash, it and many many apartments just like it skyrocketed in value as the economy crumbled. Basically lots of very very rich people, often Russian and Chinese, but not exclusively those nationalities, expatriated money to SF, NYC and London to buy real estate as a relatively safe store of value.
A good friend of my father (who lives in Brazil) is worth several hundred million and he owns an apartment in NYC worth several million that no one lives in. Between he and his family, they probably use it for at most one month per year.
That only counts for part of the problem. Something like 5-10% of the SF housing stock to which rent control laws is applicable is kept off the market because landlords prefer not to deal with the hassle of tenants rights. I forget the exact figure.
It's not that "nobody goes" because it's too crowded. It's that the people you want don't go because it's too crowded with people you don't.
Those of us in tech probably know more of the latter.
If one assumes a similar historical probability between looking for a house and buying a house, it follows that if more people are looking for houses outside of SV, more people are also buying houses outside of SV.
At the very least, it shows that people in SV are more interested in housing markets outside of SV today than they were a few years ago, even if they don't move there.
I relocated from London to Barcelona 3 years ago to do remote freelance work. The cost of living is lower here with a good quality of life. There is lots of interesting work in London and its a good place to gain experience but I've got no plans to go back.
I have 3 children and a wife that I support. Even with the high wages offered from Facebook or Google, our quality of life in Austin was far better than it could ever be in Silicon Valley.
I can work remotely from anywhere; why would I artificially lower my quality of life to live in SF proper as long as remote work exists?
IT is taking off in the Tampa/Orlando area, and Miami has a bit of a startup scene that's coming up to speed.
I suggest spending a couple weeks in the area, drive around, see what you like and what you need to live near (I don't have kids, but when I do, I'm home schooling. I work remote, so a commute does't matter. My housing selection was based solely on recreation, or rather, where I could park my sailboat).
I lived in SF, then moved to Athens, GA for 6 years, then back to SF. I have a lot more disposable income in SF because while my rent doubled, my salary tripled. On top of that, anything with an MSRP set at a national level (cars, bicycles, guitars) is a much, much smaller percentage of my monthly income. On top of that, I can contribute 3x as much to my retirement as I did before. It's win/win/win.
Truth be told, it's actually a fantastic place to live, I just missed living in the city.
Alpharetta, for example, is an hour away from Athens, closer to the City of Atlanta, has a heavy tech presence, and a median household income approaching $100k in a state with a median income half that.
It's more expensive than Athens, yeah, but it's also not Silicon Valley expensive.
While we can make all sort of arguments and analysis on the cost of living, what did it for me was exactly what you stated..."quality of life". Being in software many of us are fortunate enough to be able to live in the most expensive area in the country. However, it doesn't do a damn bit of good when you're miserable due to all of the traffic, crowds and annoying people who surround you.
Being a native I never thought I'd leave. Now, I'm confident I'll never go back...our quality of life is so much better here in Colorado. I would never suggest anyone move there unless they were single, in their 20's and in the technology space. For that group of people, it'd be a great experience. For us older family types, unless you're a total city person, the area sucks the life out of you.
I think it's great that you're happy in Colorado, and there's certainly a lot to love about the state (go Broncos!) -- but definitions of "quality of life" vary, and some might actually include some of the things that you didn't/don't like about the Bay.
Here's a link:
http://www.sfgate.com/business/networth/article/Bay-Area-a-b...
It sounds like they'll go up to 43% for a "jumbo loan" (thats not just mortgage), and according to the article, it can go higher if the buyer is strong in other ways.
With interest rates for jumbo mortgages probably a bit above 4%, that would leave a two income household with 200-300K in income enough to purchase the median priced house.
I'm not saying it's an appealing idea, just that it isn't impossible.
Think about it this way. Suppose you make $30,000 a year, and your housing costs are $10,000 a year.
Now suppose you make $200,000 a year, and your housing cost are $100,000 a year. Aside from that, prices in the higher cost area are maybe 10-20% higher.
You might actually have more disposable income in the second scenario, along with more opportunities to enjoy it. This is why I think SF is still a pleasurable place to live for people who substantially exceed a certain threshold. That threshold is very high, though.
Recent Nobel prize award was about $1.2 million. Median prices in Palo Alto is about $2.4 million so the affordability is 2.0 Nobel prizes / house in Palo Alto.
The caveat is that you have to be a solo prize winner, otherwise the award amount will be split.
http://www.zillow.com/palo-alto-ca/home-values/
This is still my favorite piece on the subject (long but good): http://techcrunch.com/2014/04/14/sf-housing/
Also if you are planning to move to Seattle, you should follow the ongoing saga of Bertha. Always a fun topic of conversation: http://en.wikipedia.org/wiki/Bertha_%28tunnel_boring_machine...
Purchase prices of 40+ years' rent signify a mix of speculation, regulatory corruption, trophy buying, and weird beta effects (i.e. amplified correlations with the national market). For example, Manhattan real estate has a beta of about 3.0, which means that a 50% swell in national prices drive Manhattan real estate up by 3.375x.
When I live in São Paulo, Brazil (which isn't exactly cheap and going out can be as expensive if not more expensive than San Francisco), my dad and I split the rent on a 2700 ft^2 penthouse duplex with 4 bedrooms, 3.5 baths, deck with barbecue pit, dining room, living room, family room. It was one block from Avenida Paulista on Alemeda Campinas. We each paid around $1300 to cover rent and the building fees.
San Francisco is stupidly expensive. The landlord trolls sue to block every single possible development that could alleviate the housing problems because it allows them to earn increasingly more from their real estate with little to no additional capital investment.
Buying at current levels would only make economic sense if you expected rents to keep going up. Right now, buying is a bad move unless you expect the extreme rent situation to worsen (rather than mean reverting) in the long term (20-30 years). Given that it'd take just one genuine progressive mayor to crush the NIMBYs and allow new development, I think that that's a bad bet.
Well, in an alternate reality where the City and County of San Francisco is a mayoral dictatorship (and using a suitably special definition of "progressive", though that's somewhat tangential) this might be true.
Of course, in that alternate reality, you'd still need the mayor with that preference to somehow get elected in San Francisco, which might require even a bigger divergence from the universe we live in than San Francisco having the kind of political structure which would empower a mayor alone to impose the changes you describe.
There's a phenomenon in older apartment buildings on Captiol and First Hills where a large number of renters are barely able to pay rent, or are already past that point and have stopped paying rent. Evicting them just means adding to Seattle's homeless population (the other 1%).
This doesn't apply to the shiny new condo you'd be living in. It applies to the ugly, squat, 95-year-old brick apartment building across the street.
And what do you do if your neuroprocessor isn't powerful enough to get you a good job in the first place? If you worked hard but couldn't become more than just a laborer? If you've never been able to afford even a car? Then suddenly you lose your job but your landlord doesn't kick you out.
This only applies to those who are incumbent in their current residence.
Any NEW renters, or those looking to move from their current place are indeed paying a new heightened rent.
The costs for even small places is ridiculously high.
Only once I moved to small town did I realize how much my quality of life was degraded by the long commutes, the over crowding, and the general scramble for access. Now I have 10min commute, up to 20min driving for any errands or shopping, and can't imagine moving back to the traffic jungles of a major city anytime soon. Especially since an average large townhouse in my neighborhood goes for $250K compared to $400-600K in Chicago.
It used to be that in small town America the only decent technology job you could get is by working remotely, or through the local university. Perhaps I got very lucky, but my current company[1] works with the biggest global companies, and I get to ship more software and work with much more diverse technology (most in the mobile space) than in my previous 10 years combined.
All I'm saying is that if are frustrated with Silicon Valley, or any other big city, don't assume that is your only option. I was pleasantly surprised when I landed in Charlottesville, VA.
[1] Its called Willowtree, and we are hiring, but I don't mean this to be recruiting spam, so look it up if you're interested.
To be serious, though, threads about various transit innovations tend to be dominated by people who strongly prefer urban living and can't imagine why anyone would want anything else. Your case study is a nice example of why there are good-natured people (engineers even!) who simply prefer a different style of life. It doesn't prove that there are no externalities to suburban living (nor urban living), but we should all remember to be thoughtful that different people may actually enjoy different lifestyles.
Charlottesville, VA is likewise more of a small city than a small town, where it's perfectly practical for people to walk and bike to commute and do errands in the older neighborhoods. Probably more so than in much of Silicon Valley, in fact. That's because walkability is as much a consequence of development style as urban scale, and much of Charlottesville was built out before than automotive era.
Even San Francisco can barely be called urban. It's absolutely dominated by automobile traffic, especially outside the tiny downtown core. I've never seen such fast-moving traffic on such wide streets in a city ostensibly hailed as walkable. Typical SF buildings are 2-3 stories at most, nearly all have attached garages or parking, and transit is hilariously awful.
Much less Silicon Valley. It's... suburbia. Try to walk from Google's HQ to Apple's. Try to walk anywhere, really, outside of a narrow strip near Stanford. What exactly does the OP feel is urban about Silicon Valley's car-dependent zoning?
Here's a great listing I noticed this morning
2 beds 2 baths 827 sqft
"Bring your tool belt, this property needs some TLC! Great location, this property has much potential! Close to schools, shopping, and freeway access."
$900,000
https://www.redfin.com/CA/Albany/815-Santa-Fe-Ave-94706/home...
Granted, what was there was nice enough (all 1100 sq/ft of it), but over $1M for a 2/1 ... it's just insane right now. It was listed for $749k. The overbidding situation seems to regularly bring in multiple (as in 10-20) offers for a house.
That's a 10.4% annual return per year for 40 years.
That's better than the 8.2% returned by the S&P 500 over the same period.
I think Realtors must be farking psychopaths to think that this should be valued at such...
However, anyone with a crap-ton of money who doesnt blink at a price like that for this, well -- they should jsut feel like lucky, fortunate people.
That's nuts.
New borrowing rules went into effect that reduce the amount that can be borrowed for a given income. As interest rates rise, the approvable loan amount will be trimmed still further. Even if you have stock winnings, most people still need to borrow to buy a home. So buyers are looking at a declining amount that they can bring to bear in the market.
However, sellers conditioned on ever rising prices aren't willing to accept lower prices just yet. Some are starting to reduce prices, but recently there have been multiple homes that don't sell and then quietly roll off the market in the 'hot' areas.
Thus there is a market standoff, and buyers who want a house realize they can simply not afford a house here. Some react to that by leaving, a trend that is accelerating.
It will be interesting to see what happens as interest rates go up, and reduce borrowing amounts still futher. If the future will bring a decline in prices or long-term stagnation - it's anyone's guess.
Of course, if your desired end-game doesn't include escaping the paycheck cycle, it is really a wash anyway.. so you may as well go where the fun jobs are.
Median rent is now $4,225 in San Francisco.
FWD.us agitating for immigration reform for potential future employees should take a backseat to lobbying for improving local living conditions in the Bay for current employees who already live in the Bay.
Instead I'm enjoying the vibrant and feverishly growing tech community of Charleston, SC and the quality of life advantages that come with living in Conde Naste's #1 rated travel destination.
I suspect as housing costs in the Bay Area continue to rise, an increasing number of engineers will come to the same conclusion.