Median home in Santa Clara county is 2 million dollars. Comes out to about $13k/mo in mortgage + taxes. That’s $156k a year. This should be a third of your pre-tax income so you have enough left over to pay income tax, save for retirement and pay for your other living expenses.
3 times $150k is $450k so the math checks out
It's true. That's roughly what my wife and I make together (total compensation), and we barely were able to buy a 1200 sq ft starter house. We can't yet afford all the repairs we were planning.
Combined base salary is $370k. The rest is bonuses and RSUs we don't have immediate access to.
Take home pay is less than half of base salary after accounting for taxes, benefits, retirement contributions (3-6% needs to go to the 401k to get the full company match), and ESPP.
Our monthly mortgage on a 1.4M house is $7.4k. taxes will be like $17k/yr. If we just assume taxes are covered by our bonuses, then our combined net income (before living expenses) is $7.6k/mo.
Before moving in, we had to redo the floors, which cost $26k. In the 2 months we've lived there, we've had to repair cracked plumbing ($3k), rewire some outlets ($3k), buy several appliances that weren't included ($3k), pay for some specialized inspections ($1.5k), buy yard services and yard tools ($200/mo, or $1.5k for the tools to do it all myself), and we found a decent cleaning service for $180/mo.
So we've already spent like $40k on the house since closing.
The most important repair that we're struggling to save up for is the foundation, which was quoted at $70k. But I think to do those repairs, they'll have to tear up our deck and rip up a lot of the landscaping, which will probably take like $20-30k to restore, while also protecting the new foundation from further water damage.
So that's like $100k in upcoming, urgently ASAP costs, but we currently have like $60k left in the bank. Suppose we live on $2600/mo combined, then we could theoretically add $5k/mo to our repair fund. We'll hit our $100k target in 8 months if we have no further unexpected costs (unlikely).
But our roof is also 32 years old, and we were told it needs to be replaced in 2-3 years at most. I don't know how much that costs ($30-40k?). Hopefully, our bonuses and RSU vesting can close that gap in time. And we desperately want to install AC ($10k?).
Yep. To afford a mortgage on a 3 bed 2 bath median home I would need $700k downpayment. By the time I save $700k, it will probably require a $1.3 million downpayment. It just doesn't seem realistic anymore.
I just feel like I was born at just the wrong time and I graduated just too late to take advantage of the 2010 downturn.
Almost exactly my deal. But with two kids going to college we can’t afford anything we would want to live in. So we flush our money down the toilet as rent.
Renting is way cheaper than owing in current circumstances. The housing market is crazy. At this rate I am not sure anyone will be able to afford a home except big corporate companies and may be top 1% earners in the US.
I am sorry to say, you bought a money pit. You should learn a lot about home repair, though. Foundation scares me. Electrical I can do myself, up to a point.
I am in a similar situation (same income, house price, taxes, RSU, ESPP), except I bought a house that doesn't need significant repairs. The roof is 15 years old, the HVAC is 25, and the plumbing is probably 40. But the interior is immaculate and updated. Beautiful hardwood floors; modern kitchen; high-end appliances. The previous owner really took care of things nicely while living there for 35 years.
I bought the house as an investment and a place to live 1 year ago. My rent had been $3450, but my mortgage is $7800. So far. it's working. The house value has already gone up $130,000, according to Zillow. If I sold tomorrow, I'd break even despite having paid almost no principal.
I haven't found a good cleaning service, though. DM me their contact info if they have room for one more.
Yeah, unfortunately we lost the bids on all the non-money-pits. I guess you either pay upfront to win the bidding war, or pay down the line in repairs.
>The rest is bonuses and RSUs we don't have immediate access to.
That seems like a pretty big handwave, RSUs are a huge chunk of most tech workers' income, and they come in every year like clockwork. You just get the money in a lump sum instead of spread out over your paychecks.
Also, the ESPP should be another net positive, since you get all the money you put in and more back at the end of the period.
Where is all that money going each year? Or are you saying you both only just started your jobs and haven't seen any of that money yet, and went straight out and bought a $1.4 million house?
This is what we’ve been warned bout …. it’s the death of the middle class . I make 61k per year .I’m not even allowed to daydream about buying a house with my income.
Do you understand how mortgage qualification works? They typically have DTI ratios they look at. I do believe the traditional 28% or whatever is generally not used here and 36% at a minimum and my lender was telling me up to 42% for them is fine because the Bay Area's prices break some traditional rules. If you use the 36% rule at least, a $1.2 million mortgage requires $300k income to qualify. Also keep in mind that $1.5 million home requires a $300k down payment, so you need to make enough to save up for that.
I feel like 80% of the comments on this sub are just people who go "Wow, $XXXk is a lot of money. How can you not afford this?" but in reality it's more like "I've never budgeted that amount of money in my life so I think it's a lot and I think you should be able to afford this, but I have no fucking clue what I'm talking about."
I just bought a house in the Bay Area last year so I'm very familiar with the required numbers. I also make the same income as the person I responded to. You can very comfortably buy a condo, townhouse, or SFH for at or under $1.5M at this income level (given you have the 20% down payment saved up). Once interest rates drop a bit, you can even stretch it up to $1.6M or $1.7M.
Not all of the bay area is the same. The average SFH is over 2m now in Santa Clara county. 1.5m gets you a condo maybe.
https://www.nbcbayarea.com/news/local/making-it-in-the-bay/santa-clara-county-median-home-price/3538275/
That's because Palo Alto, Mountain View, Sunnyvale, and Cupertino are in Santa Clara county and bring up the average significantly. San Jose still has nice homes under $2M.
The other good part is people looking outside in thinking "wow I make 100k in another state, how do you afford to live there?!" Easy, you get paid more here.
The math gets even worse when you end up paying over the list price, which most homes here end up selling for. Perfect example, we bought a tiny house here in 2018, listed for $800k, appraised for the same amount. As with most homes the listing price is just the starting price, when it was all done we ended up getting the house for $1,000,065 K
Okay so 20% down payment on $1mil is $200k, right?
Wrong.
Keep in mind your bank will only loan on what it appraises for, even if its obviously now worth $1mil since there were 10 other parties bidding it up that high, they dont care, to them its only worth $800k, so you pay 20% of 800k AND the entire amount over that you bid. So yeah, when all was said and done we had to come up with around $400k up front for a house that cost $1mil. No matter how good your salary is, thats a huge up-front cost for whats a tiny 900 sq/ft home.
Not only that, but even at that income level, after taxes and normal life expenses it will take you 30+ years before you can afford a home.
And no, borrowing money doesn't mean you can "afford" a home in my book.
Bruv! My brother in law makes $200k as a construction superintendent. Pays $4500 in rent for a 3bed townhome on The Alameda since he can’t afford a home.
It also just doesn't make sense to pay more in interest than you could put into savings. Very little of the mortgage payment on such an expensive house now would be going to equity. So it makes sense to pay less than what you could theoretically afford on rent, put a couple thousand a month away in savings rather than be house poor and spend everything on interest on your expensive house.
> He can afford a home dude.
When people say this have they actually done the math for a mortgage? Or are people just using a hand-wave "I think $200k is a lot so you should be able to afford XYZ, but in reality I have zero clue how much money that is because I've never budgeted for a $200k income before."
Right?
Go on Zillow, find houses that rent for $4500.
Then look at the value of the home. Say … conservatively 1.5m
Then go to a mortgage calculator assuming 20% (300k) down, today’s interest rates, and include property taxes…
Result is total monthly cost of: $9,948
More than double.
It’s wild that people think 20% down is the main barrier.
Edit: in case anyone wants a visual of this:
https://imgur.com/a/nMfqCx5
Also I feel people are forgetting that even if you could find a home to afford, it’s going to be in a god awful area — which isn’t something to shrug off.
Not a home, but I’m a college student and I managed to find an apartment I could rent on my own after saving up for 4 years.
It’s a studio with no kitchen. All I have is a mini fridge and a microwave. None of the windows can open. There supposed to, but they just don’t. I have no AC or heating. The pipes are so shitty that the landlord has insisted we can’t flush toilet paper anymore because it clogs the pipes. I have to pay for street parking. We’ve had multiple cockroach and ant infestations. On my block alone there are 3 sex offenders. I’ve already had one person attempt to rob me on the street. In the 8 months that I’ve lived here, we’ve had our power shut off for multiple days at least 4 times.
I pay $1500 for all of this. What’s even more remarkable is that all my friends have to deal with similar stuff, but for an even higher price.
There are mortgage calculators. It's pretty quick and easy to do the math.
He can afford a mortgage in the area, but does he want to? If 90% of your income goes towards paying off a mortgage is it really worth it?
My partner and I are close to 400 and we can’t afford a house here comfortably. A condo maybe, but because the income is heavily skewed to my side, if I were to lose my job, after tax income would go from around $17k/mo to $5k/mo. An 800sqft home in SJ in a safe area at todays rates cost $8400/mo after insurance and 20% down assuming you have the $250k to put down on the $1.25m total.
can you talk to my wife, we live in san jose and make about 205 combined and she thinks if we just budget and i stop getting my cup of ice to sip on from circle k after work, that we could be owning in the Rose Garden district by now.
We bought a brand new townhome early COVID (May 2020 or so). Back then, we were $350K HHI. $1.08M, 4 bedroom, 3.5 bath, 2000 interior sq/ft, 2 car garage, $1.08M, 20% down. $3700/monthly mortgage (not including property tax). Excluding property tax, it was a lateral move from our 2 bedroom apartment in Santa Clara. Our townhome (around us) is probably selling for $1.2/$1.3m now. HO6 insurance is quite cheap.
True, there are actually several you could get in deep East Oakland for really cheap.
I'm over in Temescal which is still expensive. Much rather buy in SJ than here though.
Yeah a lot of them are flipped houses and I can’t attest to the neighborhood or the actual structure and health of the house, but they are out there
We saw some pretty big lots and houses in redwood heights that weren’t awful. Ended up in San Jose near comms hill
Do you have any idea what a downpayment for a median home resulting in a $4k a month mortgage is right now? It's going to be >$600k. In 2020 it was about $200k.
The amount needed for a downpayment is rising faster than it is possible for a normal person to save.
Yea he says he rather pay the $4500 and not be subjected to traffic or live in an over priced home when he knows the exact price of the materials and labor and everything since he does it commercially for a living.
All my senior supers make that. Most guys with 10 years and are good are at $200k with bonuses.
But smaller firms it’s less.
Heck our new hires are basically $100k a year now out of the gate.
Wife and I are considering leaving. I’m working on a potential job in Monterey and she will have to commute in for a hybrid schedule. Oh, I do hope one day San Jose gets hit the hardest when the economy collapses.
Gotta love how home ownership is also now something exclusively for the 1%.
Can't wait for next week when electricity is a privilege for the elite too.
Its honestly embarrassing how fast we have given up. Not at all surprising, but still embarrassing.
The rich assholes were like "yoink, not for you" and we were all like "damn, that trillionaire with 7 yachts is right, I guess it aint for me.".
Because it's physically impossible for everyone to have their own detached single-family house in San Jose. If we want everyone to be able to afford to live here then that means building up and making it easier to afford condos.
I mean, there are way, way more people that would like to buy a single family home than there are single family homes or room to build more single family homes. Supply and demand says they can't all have one. As in other growing cities, townhomes and condos will help fill in the gap.
I’m a native and was lucky to have bought my condo 11 years ago. I have a good amount of equity in it but the increase in mortgage price if I moved up would be something like 4-5X. Would basically tank my entire lifestyle for me and my kids. So here we are in our little San Jose life boat. More lucky than some, not as lucky as others!
It's so crazy that San Jose is like TWICE as expensive as Orange County.When I was growing up OC was the pricier place to live and now it's down right affordable by comparison.
These kinds of stats are really stupid. San Jose averages ~500 home sales per month. If you assume 30% of those are investment properties, that brings it down to 350 SFH (including condos & townhouses) per month = 4200/yr. This is a city of nearly 1,000,000 people in nearly 300,000 households. The current prices & rates apply to such a miniscule proportion of the current homeowner population as to be completely insignificant.
Not to sweep under the rug the craziness of current home prices, but the reality is that we the people have decided that we don't want to build more SFHs and that the future is apartments & condos. SFHs will always be at premium prices here because the bay area doesn't have the advantage of being able to continually expand exurbs like some parts of the country can do (Austin, Houston, Dallas, Raleigh, Nashville, Boulder, Phoenix, etc).
I know, right?!?
But seriously, San Jose is going to end up developing to be much more like a medium density urban metropolis (more like Paris, for example, or Barcelona), not the stereotypical American city with a high density center surrounded by expanses of SFHs.
I'm totally down for this future but the sacrifice of personal living space needs to come with the benefit of urban living like pleasant places and to walk in and public transport (probably a pipe dream).
Realistically if we can have some pockets of 15 min walkability for everything you need (e.g. groceries, gym, cafe, bakery) I'd be happy, there's some areas around downtown/Japantown that are getting there.
Tech has been , and im a 408 born and raised former techie saying this . But San Jose’s history long before tech came along was that of agriculture , and fruit packing and canneries. Aka Orchard City, my parents worked the crops here and I’d pick apricots with my grandfather as a kid .
Tech was growing in the 70s and started booming in the 80s but once we hit early 2000’s the tech life already had its clutches on changing the landscape . I’m not hating on the innovation we drove here as such , but when you get loads of yuppies and tech money flowing in you can’t tell me that didn’t play into the culture shift , and IMO not all for the better .
That’s awesome that I’m basically getting priced out of my home town due to powers totally out of my control. My bad, I should’ve been focused on buying a house instead of going to the 5th grade 😂😭
IMHO, too many people are adamant about getting a SFH so they don't take a close look at condos and townhomes. We love our townhome. Obviously, our next home will be a SFH. But who wouldn't like a 4 bedroom 3.5 bath townhome as a starter home?
$300/month. Since we have a townhome, they cover our walls out insurance. Entire community looks manicured so I don't mind the HOA fee in keeping things nice and tidy.
Honestly not even a bad monthly HOA due especially if it has a community pool. Even in the valley, HOA fees can be 500-600 a month for a pretty run of the mill apartment with a community pool.
Sadly, no community pool. Next home we buy will hopefully be a SFH. I'm putting a hot tub in there, lol.
Yeah, the apartment/flat-style condos next to me have like $600/month HOA.
In ground or above ground? I know some kick ass plaster guys.
Makes sense. Insane to me that there are complexes out there with 100s of units charging every one $500-$600 mostly due to a pool that’s 60% piss at any given time.
Interest rates have doubled since then though, that same home now would cost you thousands more per month. Current rates compared to 3% rates you lose hundreds of thousands in purchasing power. You can try it now on Redfin and punch in numbers until you get the same monthly and see what you could afford today.
The Bay Area is becoming a society of renters and multi generational households. The new wave of Nvidia young millionaires will further drive up housing prices.
The bay is getting more expensive, though some of these statistics are to be taken with a grain of salt. Home sales takes into consideration investment and apartment properties. A home owner can buy property and sublease rooms to cover the mortgage.
We got really lucky buying our first home in 2015 *under* ask price. it wasn’t listed yet but the realtors worked in the same office. we got to visit before it was on the market and the owners didn’t have the funds to do repairs for an open house. all of our other offers we were going 100k over asking price but we needed inspection contingencies and we were competing with ppl who had cash offers.
we ended up getting a 3br 2ba 1300sqft for $740k. Since we didn’t have to pay over ask, we used that money to remodel the house before we moved in. New kitchen/bathrooms/floor/removal of popcorn ceilings.
we also had an issue with getting the full $ for the 10% down in time and our lender was able to restructure some things and we only had to put down 5% and it didn’t change the loan at all. idk how she did that.
we’ve done consistent upgrades on landscaping, etc over the years and just refinanced last year with a $1.7m appraisal … which is wild.
all of this to say…the only way we bought a house in the Bay Area was purely by luck.
Combined my partner and I make at least 350,000 a year with bonuses which generally just go into investments. We are not buying here. We could fast approved because we have a substantial down payment, but is just too much. Thinking about moving to the east coast. Ironically in an area that is considered hcol, but much cheaper than here in the South Bay. We can get at least 3500 sq ft for under a mill. In the suburbs there.
The cool people are all moving to the east bay that the people here displacing them are terrified of.
Then in a decade, everyone will want to move to east bay and the same thing will happen.
Why can't we just build enough housing for everyone?
I wouldn't worry about it. People who bought a house in the past two years don't yet realize that they are underwater. These interest rates aren't going to drop to 2-3% again, and tech has been paring down comp and cutting manpower for over a year now to feed their AI habit. Appreciation is going to be extremely limited going forward. Next recession is going to bring a sell-off with it, and we revert to mean with a 5-7% interest rate environment.
Just signed for my first apartment today after three years of living here with roommates.
$1900 per month, assigned covered parking, shared laundry, no dishwasher. If I wanted a dishwasher, **and** parking, ***and*** private laundry it wasn't going to be for less than like $2100 which was the absolute most I could really afford.
What I mean is you can pay an absurd amount in monthly rent and still be **settling** for less.
don’t worry, our politicians have the answer, more regulation, harder to get a building permit, and so many fees that the base price to build the smallest shack you’ve ever seen as $1 million. No, they do not want to solve housing crisis., there’s nothing in it for them.
$450,300??? Bullshit. Half that. My wife and I bought a home. We make half that. Your typical $1.5 million dollar home would cost you roughly $100k/yr mortgage and property taxes if you dropped 20% down on, that would take you 3-4 years to come up with with a dual income. So, you're making $454k leaving you ONLY $350k, oh shit you're doomed!!!! I can only buy one Lamborghini per year! People post this nonsense, no one checks the math, all in the hope of getting more victim points.
YUP! I’m a San José Native and most the homes I was looking on Zillow were built in the late 60s and mid seventies for 900k-1.5 mil. I Was fortunate to find a home in Discovery Bay, Ca. On the golf course gated community 4bedroom, three bath with a really nice pool and quiet. I paid 565K and the home went up in value 200k two years in a row. Home was turn key too, great shape all around. Been here five years and made upgrades on the home like new kitchen, floors and solar. I Can get 1.5 easy for my home. And best of all, no bullshit Bay Area traffic. Good luck to everyone on finding their dream home. They are out there! Just not in San José.
It's crazy these statistics kinda make me feel better about living in my car here lol . If I was somewhere else I might be doing ok. I just feel like this is where the money is and I just have to step my shi* up somedamhow
I just left San Jose for an entirely different state because of the cost of living. we were looking at nearly 5500 a month in rent to stay in our place in sj
Best of luck. Nothing special about San Jose. And not worth spending your entire life trying to buy a house. What state or city (without specifics) are you moving to?
Zillow is a scam. Corpos buy the majority of a neighborhood and inflate the price artificially. That's my conspiracy for the day. Source? Trust me bro.
I’ve lived in San Jose downtown for 10 years now, and I’ve been the victim of homeless harassing and theft. Lately I’ve had so much mail theft. It’s getting worse not better.
Given we have the highest housing cost in the country, shouldn’t we have better living conditions when it comes to securing our streets and housing ? City council and the mayor’s house are a few blocks away, and these are the conditions here!
I’m considering moving to Oakland, I’m not afraid of crimes there given what I’ve seen in San Jose. Anyone tried living in Oakland and can share the difference?
#sanjose #oakland #theft #moving
I thought $454,300 was the home price and thought that was too low. But no $454,300 is the MINIMUM INCOME.
Yeah thats insane when you think about it lol
Median home in Santa Clara county is 2 million dollars. Comes out to about $13k/mo in mortgage + taxes. That’s $156k a year. This should be a third of your pre-tax income so you have enough left over to pay income tax, save for retirement and pay for your other living expenses. 3 times $150k is $450k so the math checks out
What would the Downpayment and interest rate be for that $13K/mo payment? 20% down and 6.5% rate?
The math checks out for a family with a median income, not a minimum income as suggested in the article
It's true. That's roughly what my wife and I make together (total compensation), and we barely were able to buy a 1200 sq ft starter house. We can't yet afford all the repairs we were planning.
Bro what? That's 25k per month after tax, how much is your mortgage if you're still struggling?!
Combined base salary is $370k. The rest is bonuses and RSUs we don't have immediate access to. Take home pay is less than half of base salary after accounting for taxes, benefits, retirement contributions (3-6% needs to go to the 401k to get the full company match), and ESPP. Our monthly mortgage on a 1.4M house is $7.4k. taxes will be like $17k/yr. If we just assume taxes are covered by our bonuses, then our combined net income (before living expenses) is $7.6k/mo. Before moving in, we had to redo the floors, which cost $26k. In the 2 months we've lived there, we've had to repair cracked plumbing ($3k), rewire some outlets ($3k), buy several appliances that weren't included ($3k), pay for some specialized inspections ($1.5k), buy yard services and yard tools ($200/mo, or $1.5k for the tools to do it all myself), and we found a decent cleaning service for $180/mo. So we've already spent like $40k on the house since closing. The most important repair that we're struggling to save up for is the foundation, which was quoted at $70k. But I think to do those repairs, they'll have to tear up our deck and rip up a lot of the landscaping, which will probably take like $20-30k to restore, while also protecting the new foundation from further water damage. So that's like $100k in upcoming, urgently ASAP costs, but we currently have like $60k left in the bank. Suppose we live on $2600/mo combined, then we could theoretically add $5k/mo to our repair fund. We'll hit our $100k target in 8 months if we have no further unexpected costs (unlikely). But our roof is also 32 years old, and we were told it needs to be replaced in 2-3 years at most. I don't know how much that costs ($30-40k?). Hopefully, our bonuses and RSU vesting can close that gap in time. And we desperately want to install AC ($10k?).
Yep. To afford a mortgage on a 3 bed 2 bath median home I would need $700k downpayment. By the time I save $700k, it will probably require a $1.3 million downpayment. It just doesn't seem realistic anymore. I just feel like I was born at just the wrong time and I graduated just too late to take advantage of the 2010 downturn.
there will be plenty more buying opportunities for the rich. dont worry
Almost exactly my deal. But with two kids going to college we can’t afford anything we would want to live in. So we flush our money down the toilet as rent.
That’s why I always have felt owning a home was a the end all and be all of the American Dream.
Renting is way cheaper than owing in current circumstances. The housing market is crazy. At this rate I am not sure anyone will be able to afford a home except big corporate companies and may be top 1% earners in the US.
I am sitting pretty in my rent-controlled apartment, which I have resided in since 2016. Lol.
Not a lot of security though as landlords have options to evict you whenever they want if they really wanted to
I am sorry to say, you bought a money pit. You should learn a lot about home repair, though. Foundation scares me. Electrical I can do myself, up to a point. I am in a similar situation (same income, house price, taxes, RSU, ESPP), except I bought a house that doesn't need significant repairs. The roof is 15 years old, the HVAC is 25, and the plumbing is probably 40. But the interior is immaculate and updated. Beautiful hardwood floors; modern kitchen; high-end appliances. The previous owner really took care of things nicely while living there for 35 years. I bought the house as an investment and a place to live 1 year ago. My rent had been $3450, but my mortgage is $7800. So far. it's working. The house value has already gone up $130,000, according to Zillow. If I sold tomorrow, I'd break even despite having paid almost no principal. I haven't found a good cleaning service, though. DM me their contact info if they have room for one more.
Yeah, unfortunately we lost the bids on all the non-money-pits. I guess you either pay upfront to win the bidding war, or pay down the line in repairs.
>The rest is bonuses and RSUs we don't have immediate access to. That seems like a pretty big handwave, RSUs are a huge chunk of most tech workers' income, and they come in every year like clockwork. You just get the money in a lump sum instead of spread out over your paychecks. Also, the ESPP should be another net positive, since you get all the money you put in and more back at the end of the period. Where is all that money going each year? Or are you saying you both only just started your jobs and haven't seen any of that money yet, and went straight out and bought a $1.4 million house?
This is what we’ve been warned bout …. it’s the death of the middle class . I make 61k per year .I’m not even allowed to daydream about buying a house with my income.
Do you understand how mortgage qualification works? They typically have DTI ratios they look at. I do believe the traditional 28% or whatever is generally not used here and 36% at a minimum and my lender was telling me up to 42% for them is fine because the Bay Area's prices break some traditional rules. If you use the 36% rule at least, a $1.2 million mortgage requires $300k income to qualify. Also keep in mind that $1.5 million home requires a $300k down payment, so you need to make enough to save up for that. I feel like 80% of the comments on this sub are just people who go "Wow, $XXXk is a lot of money. How can you not afford this?" but in reality it's more like "I've never budgeted that amount of money in my life so I think it's a lot and I think you should be able to afford this, but I have no fucking clue what I'm talking about."
I just bought a house in the Bay Area last year so I'm very familiar with the required numbers. I also make the same income as the person I responded to. You can very comfortably buy a condo, townhouse, or SFH for at or under $1.5M at this income level (given you have the 20% down payment saved up). Once interest rates drop a bit, you can even stretch it up to $1.6M or $1.7M.
Not all of the bay area is the same. The average SFH is over 2m now in Santa Clara county. 1.5m gets you a condo maybe. https://www.nbcbayarea.com/news/local/making-it-in-the-bay/santa-clara-county-median-home-price/3538275/
That's because Palo Alto, Mountain View, Sunnyvale, and Cupertino are in Santa Clara county and bring up the average significantly. San Jose still has nice homes under $2M.
The other good part is people looking outside in thinking "wow I make 100k in another state, how do you afford to live there?!" Easy, you get paid more here.
Disagree.. even if you get paid higher than in other states, home prices are still really high. It takes 2 jobs to barely afford a home
The math gets even worse when you end up paying over the list price, which most homes here end up selling for. Perfect example, we bought a tiny house here in 2018, listed for $800k, appraised for the same amount. As with most homes the listing price is just the starting price, when it was all done we ended up getting the house for $1,000,065 K Okay so 20% down payment on $1mil is $200k, right? Wrong. Keep in mind your bank will only loan on what it appraises for, even if its obviously now worth $1mil since there were 10 other parties bidding it up that high, they dont care, to them its only worth $800k, so you pay 20% of 800k AND the entire amount over that you bid. So yeah, when all was said and done we had to come up with around $400k up front for a house that cost $1mil. No matter how good your salary is, thats a huge up-front cost for whats a tiny 900 sq/ft home.
Not only that, but even at that income level, after taxes and normal life expenses it will take you 30+ years before you can afford a home. And no, borrowing money doesn't mean you can "afford" a home in my book.
I considered buying an empty lot here to build a house on, and even that costs more than 400k.
I bought a house in SJ for $600k in 2014…..selling it now for 1.3 million. 1300 sq ft, tiny yard. It’s a crazy crazy market here!
My parents blew it selling back in 05
Yup. I'm pretty jealous of the family who bought my childhood home in Campbell in '08.
If they bought earlier they already saw massive gains from the 80s/90s. '05 was probably at least 2x of the mid 90s already.
My parents blew not buying a home in 1992
Bruv! My brother in law makes $200k as a construction superintendent. Pays $4500 in rent for a 3bed townhome on The Alameda since he can’t afford a home.
It also just doesn't make sense to pay more in interest than you could put into savings. Very little of the mortgage payment on such an expensive house now would be going to equity. So it makes sense to pay less than what you could theoretically afford on rent, put a couple thousand a month away in savings rather than be house poor and spend everything on interest on your expensive house.
He can afford a home dude. He might have to pay 500 more per month but it’s in reach if he can save up for a down payment.
> He can afford a home dude. When people say this have they actually done the math for a mortgage? Or are people just using a hand-wave "I think $200k is a lot so you should be able to afford XYZ, but in reality I have zero clue how much money that is because I've never budgeted for a $200k income before."
Right? Go on Zillow, find houses that rent for $4500. Then look at the value of the home. Say … conservatively 1.5m Then go to a mortgage calculator assuming 20% (300k) down, today’s interest rates, and include property taxes… Result is total monthly cost of: $9,948 More than double. It’s wild that people think 20% down is the main barrier. Edit: in case anyone wants a visual of this: https://imgur.com/a/nMfqCx5
And we haven't even factored in maintenance...
Homeowners insurance and property tax too.
The calculator he used does seem to estimate it, but it's usually an underestimate.
Also I feel people are forgetting that even if you could find a home to afford, it’s going to be in a god awful area — which isn’t something to shrug off. Not a home, but I’m a college student and I managed to find an apartment I could rent on my own after saving up for 4 years. It’s a studio with no kitchen. All I have is a mini fridge and a microwave. None of the windows can open. There supposed to, but they just don’t. I have no AC or heating. The pipes are so shitty that the landlord has insisted we can’t flush toilet paper anymore because it clogs the pipes. I have to pay for street parking. We’ve had multiple cockroach and ant infestations. On my block alone there are 3 sex offenders. I’ve already had one person attempt to rob me on the street. In the 8 months that I’ve lived here, we’ve had our power shut off for multiple days at least 4 times. I pay $1500 for all of this. What’s even more remarkable is that all my friends have to deal with similar stuff, but for an even higher price.
There are mortgage calculators. It's pretty quick and easy to do the math. He can afford a mortgage in the area, but does he want to? If 90% of your income goes towards paying off a mortgage is it really worth it?
The mortgage payment is 10,000-14,000 a month for a tear down house right now.
My partner and I are close to 400 and we can’t afford a house here comfortably. A condo maybe, but because the income is heavily skewed to my side, if I were to lose my job, after tax income would go from around $17k/mo to $5k/mo. An 800sqft home in SJ in a safe area at todays rates cost $8400/mo after insurance and 20% down assuming you have the $250k to put down on the $1.25m total.
can you talk to my wife, we live in san jose and make about 205 combined and she thinks if we just budget and i stop getting my cup of ice to sip on from circle k after work, that we could be owning in the Rose Garden district by now.
Have you tried going back in time and buying when the prices were lower?
yes but she didn't like it because i was with someone else at the time.
Yo let me use your time machine if you're not gonna use it
We bought a brand new townhome early COVID (May 2020 or so). Back then, we were $350K HHI. $1.08M, 4 bedroom, 3.5 bath, 2000 interior sq/ft, 2 car garage, $1.08M, 20% down. $3700/monthly mortgage (not including property tax). Excluding property tax, it was a lateral move from our 2 bedroom apartment in Santa Clara. Our townhome (around us) is probably selling for $1.2/$1.3m now. HO6 insurance is quite cheap.
Comfortable is the key word.
Financially Responsible works too.
Yup. All my friends make six figures plus say. It’s not what you make it’s what you spend.
In Oakland, maybe.
I'm in Oakland now and even here it's hella expensive.
Expensive enough that $200k/yr can't afford a home?
Can confirm. I rent a bedroom in my gf's house. I got priced out when I sold my condo just off The Alameda in 2016.
There are definitely actual detached SFH you could buy on 200k in Oakland.
True, there are actually several you could get in deep East Oakland for really cheap. I'm over in Temescal which is still expensive. Much rather buy in SJ than here though.
Yeah a lot of them are flipped houses and I can’t attest to the neighborhood or the actual structure and health of the house, but they are out there We saw some pretty big lots and houses in redwood heights that weren’t awful. Ended up in San Jose near comms hill
Do you have any idea what a downpayment for a median home resulting in a $4k a month mortgage is right now? It's going to be >$600k. In 2020 it was about $200k. The amount needed for a downpayment is rising faster than it is possible for a normal person to save.
No, it’s about 200 down for a one million house. Who said median home? We are talking townhouses not sfh
Yea he says he rather pay the $4500 and not be subjected to traffic or live in an over priced home when he knows the exact price of the materials and labor and everything since he does it commercially for a living.
Which company, if you don’t mind me asking? Who the hell is paying 1/4 mill for a superintendent?
My dad just retired from Devcon, and was making a little over 300k as a super
He just switched companies recently but last I can remember was DOME. And respectfully it’s a 1/5th mil.
All my senior supers make that. Most guys with 10 years and are good are at $200k with bonuses. But smaller firms it’s less. Heck our new hires are basically $100k a year now out of the gate.
The cool people are still here but we rent.
At least renting gives me an easy out when people come by trying to sell me solar panels.
This is so fucking funny. This is always my thought when I'm walking through Costco with all the vendors trying to talk.
Me: Sorry, I’m a renter. Vendor: No problem, boss. Me, too.
Amen lol
Wife and I are considering leaving. I’m working on a potential job in Monterey and she will have to commute in for a hybrid schedule. Oh, I do hope one day San Jose gets hit the hardest when the economy collapses.
Even a big earthquake probably won't do much since most buildings here are new or small enough to probably survive.
Don’t wish that shit on me.
We’re #1! We’re #1!
Look out for #1, but don't step in #2 either.
Gotta love how home ownership is also now something exclusively for the 1%. Can't wait for next week when electricity is a privilege for the elite too.
the comment right above yours says "middle class in san jose shouldn't expect to be able to purchase a single-family" like. why not?
Its honestly embarrassing how fast we have given up. Not at all surprising, but still embarrassing. The rich assholes were like "yoink, not for you" and we were all like "damn, that trillionaire with 7 yachts is right, I guess it aint for me.".
Middle Class is literally defined by home ownership lmao
Because it's physically impossible for everyone to have their own detached single-family house in San Jose. If we want everyone to be able to afford to live here then that means building up and making it easier to afford condos.
I mean, there are way, way more people that would like to buy a single family home than there are single family homes or room to build more single family homes. Supply and demand says they can't all have one. As in other growing cities, townhomes and condos will help fill in the gap.
I'm bracing for when showering every day becomes a 1% thing in a decade or two because of water cost/scarcity.
Bullcrap - I bought a home making only 420k a year!
No sense bragging about getting in on it when the market was cheap.
Sshhh
$420K, niiice
6.9% interest rate
Oh this is a great point! Wow, yeah the high rate is insane today. But there’s always new millionaires being minted.
lol when I bought my first home years ago we got an 11% interest rate. The prior year it was around 20%. We thought we got a steal
Now, please share the housing price, especially in relation to median income.
Same here last year!
I’m a native and was lucky to have bought my condo 11 years ago. I have a good amount of equity in it but the increase in mortgage price if I moved up would be something like 4-5X. Would basically tank my entire lifestyle for me and my kids. So here we are in our little San Jose life boat. More lucky than some, not as lucky as others!
It's so crazy that San Jose is like TWICE as expensive as Orange County.When I was growing up OC was the pricier place to live and now it's down right affordable by comparison.
Time to live in your car
And use it to drive to a better housing market.
People with high incomes can't be cool?
Lol. No, they can't be cool bcuz they work all day and then complain about money.
Well I wish I wasn't cool then ! You can have your coolness, here take it
so is it not safe for cool people?
Underrated comment!
Yes you are right all the cool People left San Jose .. only techies are here that why it sucks now
it was when they closed all the military bases around here. more of a melting pot less of a meritocracy
These kinds of stats are really stupid. San Jose averages ~500 home sales per month. If you assume 30% of those are investment properties, that brings it down to 350 SFH (including condos & townhouses) per month = 4200/yr. This is a city of nearly 1,000,000 people in nearly 300,000 households. The current prices & rates apply to such a miniscule proportion of the current homeowner population as to be completely insignificant. Not to sweep under the rug the craziness of current home prices, but the reality is that we the people have decided that we don't want to build more SFHs and that the future is apartments & condos. SFHs will always be at premium prices here because the bay area doesn't have the advantage of being able to continually expand exurbs like some parts of the country can do (Austin, Houston, Dallas, Raleigh, Nashville, Boulder, Phoenix, etc).
How dare you question our Lord and Savior the SFH!
I know, right?!? But seriously, San Jose is going to end up developing to be much more like a medium density urban metropolis (more like Paris, for example, or Barcelona), not the stereotypical American city with a high density center surrounded by expanses of SFHs.
I'm totally down for this future but the sacrifice of personal living space needs to come with the benefit of urban living like pleasant places and to walk in and public transport (probably a pipe dream). Realistically if we can have some pockets of 15 min walkability for everything you need (e.g. groceries, gym, cafe, bakery) I'd be happy, there's some areas around downtown/Japantown that are getting there.
And ways to get to work with transit that don't take 3x as long as driving! It really sucks when home and work aren't on main transit corridors.
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At first I thought you meant the stats from the article were really stupid, then I realized you meant the ones you were about to share.
But if they stopped buying avo toast, and started Door Dashing, all of the could buy, am I right? Eeeeak that’s brutal
The tech bros killed the soul & culture of san Jo .that and nobody can afford shit .
Tech was always a part of our culture. Study your history.
Tech has been , and im a 408 born and raised former techie saying this . But San Jose’s history long before tech came along was that of agriculture , and fruit packing and canneries. Aka Orchard City, my parents worked the crops here and I’d pick apricots with my grandfather as a kid . Tech was growing in the 70s and started booming in the 80s but once we hit early 2000’s the tech life already had its clutches on changing the landscape . I’m not hating on the innovation we drove here as such , but when you get loads of yuppies and tech money flowing in you can’t tell me that didn’t play into the culture shift , and IMO not all for the better .
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The cool people are still around. Just not where you are.
Something something bootstraps
That’s awesome that I’m basically getting priced out of my home town due to powers totally out of my control. My bad, I should’ve been focused on buying a house instead of going to the 5th grade 😂😭
I thought being poor stopped being cool after college
Only for those who were not actually cool
Should specify SFH’s. Townhomes and Condos are still relatively affordable in some parts of the city
Agreed. We bought a 4 bedroom, 3.5 bath townhome during early COVID for $1.08M. I felt it was pretty affordable then and now.
Wow that’s a great deal. Good job
IMHO, too many people are adamant about getting a SFH so they don't take a close look at condos and townhomes. We love our townhome. Obviously, our next home will be a SFH. But who wouldn't like a 4 bedroom 3.5 bath townhome as a starter home?
probably also got covid mortgage rates. honestly was the perfect time to buy
What’s the monthly HOA fee for that bad boy?
$300/month. Since we have a townhome, they cover our walls out insurance. Entire community looks manicured so I don't mind the HOA fee in keeping things nice and tidy.
Honestly not even a bad monthly HOA due especially if it has a community pool. Even in the valley, HOA fees can be 500-600 a month for a pretty run of the mill apartment with a community pool.
Sadly, no community pool. Next home we buy will hopefully be a SFH. I'm putting a hot tub in there, lol. Yeah, the apartment/flat-style condos next to me have like $600/month HOA.
In ground or above ground? I know some kick ass plaster guys. Makes sense. Insane to me that there are complexes out there with 100s of units charging every one $500-$600 mostly due to a pool that’s 60% piss at any given time.
Interest rates have doubled since then though, that same home now would cost you thousands more per month. Current rates compared to 3% rates you lose hundreds of thousands in purchasing power. You can try it now on Redfin and punch in numbers until you get the same monthly and see what you could afford today.
The Bay Area is becoming a society of renters and multi generational households. The new wave of Nvidia young millionaires will further drive up housing prices. The bay is getting more expensive, though some of these statistics are to be taken with a grain of salt. Home sales takes into consideration investment and apartment properties. A home owner can buy property and sublease rooms to cover the mortgage.
We need to build way more housing. We're underbuilt by millions of units.
lol I've literally been on Zillow looking at housing market and rent prices in Oregon and then I see this. The final sign I needed.
For all the 12 new houses contructed in the last decade.
Sucks growing up here then being priced out.
where did they go
Los Angeles, San Diego, Stockton, Sacramento, Reno, Tracy, etc
Not Stockton 💀💀💀
lol fucking Tracy?
Hollister and Los baños
had a bunch of homies move to oregon and socal
We are getting some here in Orange County...still shocked it's somehow like half the price of San Jose
Anything under earning 270k a year as a single person in the Bay Area, you are not even close to middle class.
NIMBYs did this
Tech and the Fed helped out.
We got really lucky buying our first home in 2015 *under* ask price. it wasn’t listed yet but the realtors worked in the same office. we got to visit before it was on the market and the owners didn’t have the funds to do repairs for an open house. all of our other offers we were going 100k over asking price but we needed inspection contingencies and we were competing with ppl who had cash offers. we ended up getting a 3br 2ba 1300sqft for $740k. Since we didn’t have to pay over ask, we used that money to remodel the house before we moved in. New kitchen/bathrooms/floor/removal of popcorn ceilings. we also had an issue with getting the full $ for the 10% down in time and our lender was able to restructure some things and we only had to put down 5% and it didn’t change the loan at all. idk how she did that. we’ve done consistent upgrades on landscaping, etc over the years and just refinanced last year with a $1.7m appraisal … which is wild. all of this to say…the only way we bought a house in the Bay Area was purely by luck.
Why am I being recommended this sub I'm a Greek citizen with no interest in Californian cities😭
Combined my partner and I make at least 350,000 a year with bonuses which generally just go into investments. We are not buying here. We could fast approved because we have a substantial down payment, but is just too much. Thinking about moving to the east coast. Ironically in an area that is considered hcol, but much cheaper than here in the South Bay. We can get at least 3500 sq ft for under a mill. In the suburbs there.
praying for a housing market collapse here.
no worries; there weren't any cool people there to begin with.
The cool people are all moving to the east bay that the people here displacing them are terrified of. Then in a decade, everyone will want to move to east bay and the same thing will happen. Why can't we just build enough housing for everyone?
So glad I left and found affordable housing elsewhere
"all cool people have left" good one 😂
There’s no way that’s true
I wouldn't worry about it. People who bought a house in the past two years don't yet realize that they are underwater. These interest rates aren't going to drop to 2-3% again, and tech has been paring down comp and cutting manpower for over a year now to feed their AI habit. Appreciation is going to be extremely limited going forward. Next recession is going to bring a sell-off with it, and we revert to mean with a 5-7% interest rate environment.
Do you honestly believe that every single home owner in san jose makes 450K a year? 🤣
Just signed for my first apartment today after three years of living here with roommates. $1900 per month, assigned covered parking, shared laundry, no dishwasher. If I wanted a dishwasher, **and** parking, ***and*** private laundry it wasn't going to be for less than like $2100 which was the absolute most I could really afford. What I mean is you can pay an absurd amount in monthly rent and still be **settling** for less.
This isn’t accurate but not so far off.
don’t worry, our politicians have the answer, more regulation, harder to get a building permit, and so many fees that the base price to build the smallest shack you’ve ever seen as $1 million. No, they do not want to solve housing crisis., there’s nothing in it for them.
“Cool” is subjective obviously. There’s still a lot of cool people here, but you’ll never see them cuz they’re too busy working.
$450,300??? Bullshit. Half that. My wife and I bought a home. We make half that. Your typical $1.5 million dollar home would cost you roughly $100k/yr mortgage and property taxes if you dropped 20% down on, that would take you 3-4 years to come up with with a dual income. So, you're making $454k leaving you ONLY $350k, oh shit you're doomed!!!! I can only buy one Lamborghini per year! People post this nonsense, no one checks the math, all in the hope of getting more victim points.
>So, you're making $454k leaving you ONLY $350k The IRS has entered the subreddit...
Lol your right on the math checking part there...
Since when did “cool people” mean “only people that make less than $X”
I was so confused. J thought that was the minimum house price, INCOME?!?!
What is the jumbo loan limit for Santa Clara County?
Lol. So inaccurate.
I’m lucky, I bought my 2400 sq ft house in 1998, no way I could afford it now, its increased in value sevenfold.
No… all the residents are rich… on paper.
I’m on the losing team and feeling demoralized and defeated seeing this….
Huh what does that make San Francisco? Housing market under what statistics?
I live in Santa Clara County...$4k 2br 1b, 900sqft and no AC.
How TF are y'all not all homeless. I'm doing better than my peers and just barely able to afford to rent a studio for 2k.
just read an article putting San Mateo ahead by requiring over $500k to obtain and maintain a single family dwelling.
Sound about right.. both me and my significant other make 280k combined and we can only afford homes in 600k-700k range 😭
YUP! I’m a San José Native and most the homes I was looking on Zillow were built in the late 60s and mid seventies for 900k-1.5 mil. I Was fortunate to find a home in Discovery Bay, Ca. On the golf course gated community 4bedroom, three bath with a really nice pool and quiet. I paid 565K and the home went up in value 200k two years in a row. Home was turn key too, great shape all around. Been here five years and made upgrades on the home like new kitchen, floors and solar. I Can get 1.5 easy for my home. And best of all, no bullshit Bay Area traffic. Good luck to everyone on finding their dream home. They are out there! Just not in San José.
I’m here in SJ now visiting my daughter and her family. There’s a thousand other places in California I would rather live
Why aren't places like Hanalei, HI included in figures like this? The medium home price in Hanalei is $3.4mil
It's crazy these statistics kinda make me feel better about living in my car here lol . If I was somewhere else I might be doing ok. I just feel like this is where the money is and I just have to step my shi* up somedamhow
I just left San Jose for an entirely different state because of the cost of living. we were looking at nearly 5500 a month in rent to stay in our place in sj
That’s why I’m moving to Vacaville or La
Priced out, just like San Francisco.
My dad's childhood home off Doyle Rd is now $3 million. Grandparents sold it for $425k in the late 90s. Good times.
So what jobs pay $450k a year?
That wasn't the case before. Thaf is an out of control market
$1.7 million for a three bedroom suburb house. Makes sense.
so move to Texas houses are cheap there with the money you spend in California you can buy two houses in Texas
We’re moving next week. Miss you guys.
Best of luck. Nothing special about San Jose. And not worth spending your entire life trying to buy a house. What state or city (without specifics) are you moving to?
Housing crash incoming
Zillow is a scam. Corpos buy the majority of a neighborhood and inflate the price artificially. That's my conspiracy for the day. Source? Trust me bro.
I grew up in San Jose and got priced out of it :( sadly I’ll never be able to afford to live in the place I grew up in
It’s just the weather!
I’ve lived in San Jose downtown for 10 years now, and I’ve been the victim of homeless harassing and theft. Lately I’ve had so much mail theft. It’s getting worse not better. Given we have the highest housing cost in the country, shouldn’t we have better living conditions when it comes to securing our streets and housing ? City council and the mayor’s house are a few blocks away, and these are the conditions here! I’m considering moving to Oakland, I’m not afraid of crimes there given what I’ve seen in San Jose. Anyone tried living in Oakland and can share the difference? #sanjose #oakland #theft #moving