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How much does it cost to build a home in Silicon Valley? (2016)

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Re: How much does it cost to build a home in Silicon Valley? (2016)

#41

Post by nitrogen »

chrissnell wrote: post #37
scarmig wrote: post #31

Earlier quoted context omitted.

That's a wild underestimate. I'd guess at least 100k people can afford properties like that, unless you mean something like afford it in cash. Even then, it's still an underestimate.

So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks. How many households are pulling this kind o…

How do you arrive at this $30k/mo figure?

Re: How much does it cost to build a home in Silicon Valley? (2016)

#42

Post by scarmig »

chrissnell wrote: post #37
scarmig wrote: post #31

Earlier quoted context omitted.

That's a wild underestimate. I'd guess at least 100k people can afford properties like that, unless you mean something like afford it in cash. Even then, it's still an underestimate.

So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks. How many households are pulling this kind o…

The Bay Area has around 3 million households. The top 1% of households in this area make around 720k or so. So that by itself gets you to 30k households.

Account for the fact that 2 million is much more attainable than 3, and based on income alone you get pretty close to 100k households.

Many people also store their assets in real estate. Add those in (people selling their old house to buy a new one), and you are definitely above 100k households able to afford a 2 million dollar place.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#43

Post by scarmig »

nitrogen wrote: post #41
chrissnell wrote: post #37

Earlier quoted context omitted.

So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks. How many households are pulling this kind o…

How do you arrive at this $30k/mo figure?

It might be slightly high, but it sounds about right extrapolating from my situation.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#44

Post by toast0 »

rootusrootus wrote: post #22

I've always wondered what software developers make in the heart of silicon valley. I see some things that basically say 'more than Portland but only by maybe 50% or so', which means perhaps $180K or so? Nobody is buying a million dollar house on that kind of income, but in Portland (where I think houses are pretty expensive) someone making $120K wouldn't have any problem buying a perfectly fine place, even pretty clo…

A $1M loan (at 4%), is just under $60k/year for the mortgage, you also need to pay property tax and insurance, but it wouldn't take you too far off the rules of thumb for a $180k. Of course, $1M doesn't get you much of a house in the south bay. Either a pretty small house with a fairly small lot in an iffy neighborhood with poor schools, or a condo/townhouse with more square feet and nearly zero outdoors space. If you want to live in mountain view, $1M is probably going to get you a small condo/townhouse.

It's a bit tight at the beginning, but since salaries seem to be increasing at a crazy pace, and your housing costs would be locked in, it gets easier in a few years. Or everything goes to hell, and at least California is a no-recourse state, so at worst, you can walk away with ruined credit and no further obligation to pay.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#45

Post by matte_black »

woolvalley wrote: post #27
jacobolus wrote: post #16

Earlier quoted context omitted.

Not to mention living with all of your extended family under one roof, starting a church or homeless shelter or disco club, stockpiling enough food to outlast a zombie uprising, or displaying your collection of luxury cars you never drive.... More seriously, in general single-family houses should be on the order of 1000–2000 square feet. The rest is typically a complete waste (nobody I know who has a 4000+ square foo…

Bedrooms, multiple kids, large spacious bathrooms, an office, a gym, a combined living room/kitchen/dining room open space for hosting parties, and most importantly of all, storage space. That can become 3000 sqft fairly quickly, of which you only use 1000 sqft frequently as a family :D

Do not forget spacious walk-in closets, which are very underrated. Having a boutique-like experience for picking out clothes and a full size mirror to check them out in is a great way to start a day or prepare for a fancy event.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#46

Post by lostlogin »

matte_black wrote: post #18
jacobolus wrote: post #16

Earlier quoted context omitted.

Not to mention living with all of your extended family under one roof, starting a church or homeless shelter or disco club, stockpiling enough food to outlast a zombie uprising, or displaying your collection of luxury cars you never drive.... More seriously, in general single-family houses should be on the order of 1000–2000 square feet. The rest is typically a complete waste (nobody I know who has a 4000+ square foo…

I don’t know about you, but 1000-2000 sqft for a single family home with an actual family in it is downright cramped. You could turn a garage into a wood shop though if you don’t have a particular need to store your car in a garage. The point of a large home is to turn it into your own personal oasis where you can spend days at a time without ever really needing to leave, and without feeling bored. The thing is, many…

And a well designed small house is better still in my view - having everything you describe in a small place without it feeling cramped. My suggested measure is being able to vacuum the whole house from a single power point.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#47

Post by chrissnell »

nitrogen wrote: post #41
chrissnell wrote: post #37

Earlier quoted context omitted.

So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks. How many households are pulling this kind o…

How do you arrive at this $30k/mo figure?

Commonly accepted figure for total cost of a house is 1% a month.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#48

Post by jmathai »

xenadu02 wrote: post #33
rootusrootus wrote: post #22

I've always wondered what software developers make in the heart of silicon valley. I see some things that basically say 'more than Portland but only by maybe 50% or so', which means perhaps $180K or so? Nobody is buying a million dollar house on that kind of income, but in Portland (where I think houses are pretty expensive) someone making $120K wouldn't have any problem buying a perfectly fine place, even pretty clo…

Senior should make 175-200k base plus 100-200k in RSUs per year rolling - that is if you get a good initial grant and keep getting good reviews by year 4 you have staggered vesting that nets that amount. At 300-400k per year you should be able to live a good lifestyle while saving for a house. Really senior engineers can certainly make more; 500k for a top 10% performer. For reference I just got my tax statement for…

I don't think that's what a typical software engineer makes. A Level 5 SWE at Google makes that. But that is far from representative of the vast majority of SWEs.

More likely, you can afford a $1m mortgage on a double income of $150k which, IMO, is a lot more common.

The reality is that a lot of people (single and married with kids) rent with the hopes they will be able to afford a mortgage.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#49

Post by scarmig »

scarmig wrote: post #42
chrissnell wrote: post #37

Earlier quoted context omitted.

So, a $3MM home costs approximately $30K a month after interest, depreciation, taxes, and insurance, right? That's around $360,000 a year. Assuming you're going way overboard and spending half of your income on housing, that's $720K/yr of salary required to support that--or more, if you want to save a little money and have a life outside of work and writing mortgage checks. How many households are pulling this kind o…

The Bay Area has around 3 million households. The top 1% of households in this area make around 720k or so. So that by itself gets you to 30k households. Account for the fact that 2 million is much more attainable than 3, and based on income alone you get pretty close to 100k households. Many people also store their assets in real estate. Add those in (people selling their old house to buy a new one), and you are def…

Also, as far as what a typical household making near that much might look like: my personal situation is that I'm a senior software engineer, whose total comp is nothing really exceptional. I'm married to a nurse. Our household income is around 500k. You can easily imagine ways to tweak our careers to put us into the 1% range.

Even as is, we have an attainable 5 year plan to buy a home at the lower end of the listed range without being stupid.

Re: How much does it cost to build a home in Silicon Valley? (2016)

#50

Post by paxys »

rootusrootus wrote: post #22

I've always wondered what software developers make in the heart of silicon valley. I see some things that basically say 'more than Portland but only by maybe 50% or so', which means perhaps $180K or so? Nobody is buying a million dollar house on that kind of income, but in Portland (where I think houses are pretty expensive) someone making $120K wouldn't have any problem buying a perfectly fine place, even pretty clo…

A million dollar home is comfortably affordable on a $180K income if you save for a few years for a downpayment.
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