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In Bay Area, six-figure salaries are “low income”

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Re: In Bay Area, six-figure salaries are “low income”

#201

Post by kevinburke »

cletus wrote: post #4

Cue the standard responses about lack of development, rampant NIMBYism, Prop 13 and rent control. There's really nothing to add at this point. All of this is also why I really prefer living in NYC, which actually has the infrastructure for this sort of thing (meaning if you're a lower to middle income earner in the tri-state area you're not totally hosed like you are in the Bay Area).

There is something to add, which is the tech community is remarkably complacent about all of it, and the leaders in our community aren't doing much to support pro-housing causes.

Higher up I posted a list of actions we can take today to help make housing more affordable in the Bay Area.

Re: In Bay Area, six-figure salaries are “low income”

#202

Post by ig1 »

mtkd wrote: post #168
ig1 wrote: post #138

Earlier quoted context omitted.

Assuming a 60k deposit (so 340k mortage), you could get a 2 year fixed mortgage at 1.53% so your repayments will be £1,178.31. £70k post-tax is around £48k so £4k/month so the mortgage will take around 30% of your take-home pay which is a fairly standard ratio.

long term average mortgage interest rates are over 5% - if you're working in a STEM field what thought process leads you to blowing 1+ years net salary on a deposit for a 2yr fix at 1.53% with a 20+ year commitment?

Mortgage rates are fundamentally unpredictable, you can't assume that they'll revert to a 30 year average.

However what mortgage lenders do is "stress test" at 5%-6.5% that means they evaluate if you'd be able to afford to pay the mortgage + cover your essential costs (food, energy, etc.) if rates rose to those levels.

It's essentially a worse-case assumption to ensure you wouldn't be bankrupt if that happened, not whether you'd be comfortably off at that level.

If interest rates were to rise in 5-10 years time don't forget you could also remortgage to a longer time period to significantly reduce monthly payments if you needed to.

Rates aren't going to jump overnight; if they rise it'll likely be a long slow-rise by which point you should have already paid down a meaningful percentage of your mortgage.

Re: In Bay Area, six-figure salaries are “low income”

#203

Post by jostmey »

lisper wrote: post #34
cbhl wrote: post #12

Earlier quoted context omitted.

Once upon a time, a family of four had the same number of working adults as a family of one.

Once upon a time a family of four would live in a 1200 square foot house and own one car and one television, would rarely travel, rarely go out to eat. That kind of life style can still be sustained even in the Bay area on $100k/yr.

Great point. Let's regress backwards. San Francisco's housing crises and living cost is self inflicted by limiting supply.

Re: In Bay Area, six-figure salaries are “low income”

#204

Post by FireBeyond »

ig1 wrote: post #177
bencoder wrote: post #133

Earlier quoted context omitted.

Saving up a 10%, £40k, deposit while renting here is quite tough though, even on 70k. And most devs don't earn that much

Well lets reverse out the numbers. The median cost of a room in a flatshare in Zone 1/2 is just under £700 month, that's £8.4k/year. Let's assume other costs of living to be £10k/year that gives us a total of £18.4k/year. Let's say you want to save £40k over 4 years, so 10k/year, that would require a take-home salary of £28.4k/year which implies a pre-tax salary of 37k. 37k should be comfortably achievable for a soft…

How many people realistically go from a "flatshare" to a "3 br home" in one step like that?

Re: In Bay Area, six-figure salaries are “low income”

#205

Post by apearson »

lordnacho wrote: post #192
ransom1538 wrote: post #46

Earlier quoted context omitted.

Did the exact same thing this year. Moved to Oviedo, FL from SF: 1) no state income tax, 2) public schools in my neighborhood are equivalent to a private school in sf [i] 4) weather is great 8 months out of year, 5) beaches you can swim in, 6) rent is ~1/4 of what it was in SF, 7) cuban food, 8) as a resident, kids have year round disney passes [i] http://school-ratings.com/Florida/schools/Carillon_Elementar... WARNI…

8) as a resident, kids have year round disney passes What? Surely you pay for those? Also what about the humidity? Every time I've been there it's like a sauna.

You get used to the heat and humidity after a while.

Re: In Bay Area, six-figure salaries are “low income”

#207

Post by sf_rob »

juliangoldsmith wrote: post #79
ryanSrich wrote: post #39

Earlier quoted context omitted.

Just remember that you'll want to select a city that has a decent economy and tech scene in the event that you lose your job and need to take a location dictated position. So long as you and your partner are both making 6 figures you should be able to afford any of the following cities: - Seattle - Portland - Austin - Denver

>So long as you and your partner are both making 6 figures That's a pretty high bar for cost of living. Here in Charlotte, NC, I make half of that, and could support two people without any difficulty.

I get the feeling that tech people no longer have reasonable understandings of cost of living. I live in the PNW and could keep my current nice standard of living on a $60k salary (as a single person). I cannot think of a scenario where I would need two six figure incomes unless I really ramped up spending (private school, nicer car, nicer house).

Re: In Bay Area, six-figure salaries are “low income”

#208

Post by wakkaflokka »

I make just over six figures in the southeast, and I definitely have a blessed and comfortable lifestyle (no kids, no debt). I can imagine the equation changes drastically once kids/family are involved. I've visited San Francisco, Los Angeles, and Seattle, and LOVE the cities. But according to CNN's cost of living calculator, I'd have to make a base salary of almost $190k to have a similar lifestyle in San Fran and Seattle. That seems borderline absurd!

Re: In Bay Area, six-figure salaries are “low income”

#209

Post by hyperbovine »

archeantus wrote: post #20
gshulegaard wrote: post #14

Earlier quoted context omitted.

Just curious, as an engineer finding myself thinking along similar lines, where did you end up moving?

We moved to Utah where the tech scene is actually quite strong, and the cost of living is significantly less. We bought an 8k sq ft house for the price of many 1,500 sq ft town homes we had been putting offers in on in California. It can be such a rat race down there, it is refreshing to remember that it doesn't have to be that way. Life exists outside of The Valley, and it happens to be a pretty darn good one (and a…

I have to ask: 8000ft²? What are you doing with all that space? Are you Mormon?

Re: In Bay Area, six-figure salaries are “low income”

#210

Post by [deleted] »

ryanSrich wrote: post #113
santaclaus wrote: post #86

Earlier quoted context omitted.

> Portland Rents in Portland are skyrocketing (I had friends whose landlords were pulling out 30% rent increases). I went from Portland to Oakland and my rent isn't that much more.

You can still buy a house in Portland for $500k. I live here. Bought in 2015. It's more expensive in 2017, but not 100% more. Once 1000sqft houses hit a $1mm average Portland will be too expensive. Until then we're doing just fine.

[deleted]
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