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San Francisco, I Love You But You’re Bringing Me Down

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Re: San Francisco, I Love You But You’re Bringing Me Down

#381

Post by dllthomas »

api wrote: post #30

I've got a possibly great job offer on the table from SF/SV, but may turn it down. I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. The real estate market is certifiably, utterly bat-dookie insane. NYC is often considered more expensive, and Manhattan is certainly... well... Manhattan. But taken collectively…

Not a refutation of your broader point, but I just want to point out there are outlying areas around the bay that aren't as expensive, too - though I don't know prices in either area well enough to do a thorough comparison.

Re: San Francisco, I Love You But You’re Bringing Me Down

#382

Post by pairing »

chiph wrote: post #123
michaelochurch wrote: post #83

Earlier quoted context omitted.

I regret that I have but one upvote to give you for this. Here, have an Indignation: http://www.youtube.com/watch?v=EtCiP8B2xpc#t=7s In the long term, Silicon Valley and SF is eating its young. It's a city built on young entrepreneurs coming there and doing new stuff, but if nobody who hasn't already made it can afford to live there what happens then? The other problem is that these high costs soak up everyone's spar…

Austin real estate isn't as bat-shit insane as SF, but what I'm seeing is that there are people who are paying $10k over the asking price. And that is severely distorting the market. Agreed that Austin isn't as "hit-driven" as SF is. Talent here is more diverse on an individual basis than other tech towns.

As a comparison though, people are paying 100K over asking without blinking in South Bay for already overpriced real estate in the last 2 months. I've even seen bidding up of rental prices in the last month. 10K sound pretty good in comparison.

Re: San Francisco, I Love You But You’re Bringing Me Down

#383

Post by recursive »

mcguire wrote: post #286
nightski wrote: post #226

Earlier quoted context omitted.

Maintaining a home can cost more than you might imagine. The reason it is profitable for landlords (at least for apartments) is due to the fact there many are paying rent within the same building (economy of scale). Second, taxes are significant. Where I live (Fargo, ND) property taxes equal a rent payment alone. So it almost makes more sense (monetarily) to pay rent and invest the extra money into something more luc…

Could you explain why you think you, as a renter, don't pay property taxes?

Because the IRS doesn't think I'm responsible for it.

Re: San Francisco, I Love You But You’re Bringing Me Down

#384

Post by sabat »

frankcaron wrote: post #126

This is a sobering read as I prepare to move down to the Valley for work after years of talking about, and to a lesser extent dreaming about, it. One would hope that the experience for those of us who haven't had our stint there yet would still be worth it. What say you, veterans? And what of San Mateo? That's where my new work is, and I wonder if I'd be better off living there than San Fran proper.

Definitely. You can always visit SF, but remember that from SJ SF is a series of populated cities, some of which you've heard of (e.g. Palo Alto). San Mateo is nice (great downtown), as is Foster City, parts of Redwood City, San Carlos, even Half Moon Bay.

Re: San Francisco, I Love You But You’re Bringing Me Down

#385

Post by dllthomas »

nawitus wrote: post #278
enraged_camel wrote: post #230

Earlier quoted context omitted.

>>If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when you sell the house. (Assuming the market doesn't go pear-shape: a big assumption.) In contrast, money you spend on rent is a pure cost, and irrevocably lost. This logic is fundamentally flawed. Contrary to the popular conventional wisdom (repeated by our Baby Boomer p…

Well, it's throwing away money compared to home ownership, which also gives you a place to live. I don't know about hypothetical ultra-liquid markets, but in practise rent is usually higher than interest+maintenance fees over a longer period of time. Real estate investors need to make a profit, and so do banks, but the banks tend to have slimmer margins.

Also, banks are often still making a profit with rental properties.

Which isn't to say you should buy a home blindly - you shouldn't do anything so major blindly. It seems to me the appropriate way to view it is: if your cost of owning a home sans payment of principle is less than renting, then you are "throwing away" money but the alternative is investing that piece you're throwing away plus quite probably more in the real estate market, with the corresponding potential upside and risk. In the extreme case where costs including principle are less than rent, then you should probably purchase. An additional thing to watch, though, is that people often under-estimate things like repairs.

All of which is to say, there is no obviously right answer.

Re: San Francisco, I Love You But You’re Bringing Me Down

#386

Post by ixacto »

gknoy wrote: post #198
enraged_camel wrote: post #164

Earlier quoted context omitted.

>>I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. I've never understood this crazy, if not outright insane obsession with home ownership. Why does everyone want to tie significant amounts of their lifetime earnings into physical property that historically has had very low appreciation in value? It's like pe…

As someone who recently (this past year) went from being a renter to a homeowner, and had previously been a home owner for several years, it's not all rational... but here are some of the reasons. I don't have to worry about the rent going up every year / six-months. If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when yo…

Sortof. You still have to worry about taxes/bills, which are not insignificant in places like SF... You also have to ask permission from the local hoa/local government if you want to paint your house a certain colour. You also have to pay dues to the hoa.

Re: San Francisco, I Love You But You’re Bringing Me Down

#387

Post by dllthomas »

7Figures2Commas wrote: post #376
LanceH wrote: post #357

Earlier quoted context omitted.

If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible. For those of us who want to stay in one place, this is a really good thing. If I want to invest in a workshop in the house, that's a good thing. My house is mine, and some of the things I have here just aren't available to rent.

> If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible. That's arguably a feature, not a bug. Rents generally don't skyrocket without cause, and they usually don't skyrocket in isolation. If you're living in an area where rents are increasing rapidly and your income isn't keeping pace with the cost of living (of which rent is typically a substantial component), y…

> Your house isn't yours unless and until it's paid off.

That depends what you mean. It's my understanding (as a non-homeowner of any stripe) that you can do more substantial remodelling projects without asking for your landlord's blessing in a home you have a mortgage on, which seems to have been the kind of thing the parent was talking about, and is a potentially substantial practical difference in whether a space is "mine" or "not mine" whatever the actual equity situation is.

Re: San Francisco, I Love You But You’re Bringing Me Down

#388

Post by kenster07 »

enneff wrote: post #380
kenster07 wrote: post #331

1) Leaving sf in any part, due to your perception of the reaction of random women at bars, to your profession, blows me away. There are plenty of people in the city who also admire your profession, including many single women. And quite frankly, there are more important things in life anyway. 2) People who feel 'guilty' about getting decent salaries are missing the big picture. You are now an allocator of wealth. You…

Who are you to decide what is important in the author's life?

A commenter on a blog that has been posted on the internet for public consumption?

Re: San Francisco, I Love You But You’re Bringing Me Down

#389

Post by dllthomas »

7Figures2Commas wrote: post #376
LanceH wrote: post #357

Earlier quoted context omitted.

If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible. For those of us who want to stay in one place, this is a really good thing. If I want to invest in a workshop in the house, that's a good thing. My house is mine, and some of the things I have here just aren't available to rent.

> If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible. That's arguably a feature, not a bug. Rents generally don't skyrocket without cause, and they usually don't skyrocket in isolation. If you're living in an area where rents are increasing rapidly and your income isn't keeping pace with the cost of living (of which rent is typically a substantial component), y…

> Yes, these individuals might be able to sell their homes at substantial profit, but they'll still have to move once they sell.

They have to move if they were renting, too, and would be have less money (if they didn't leave the very instant rent rose at all) instead of more. Of course, that's just saying that it's better to be long an asset when its price jumps.

Also, if your work doesn't tie you to a region and you've purchased a house, and rents are high, you can always rent out your house instead of selling it. I know several people who have done this, in one form or another, to generally positive outcome.

Re: San Francisco, I Love You But You’re Bringing Me Down

#390

Post by tolmasky »

nawitus wrote: post #278
enraged_camel wrote: post #230

Earlier quoted context omitted.

>>If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when you sell the house. (Assuming the market doesn't go pear-shape: a big assumption.) In contrast, money you spend on rent is a pure cost, and irrevocably lost. This logic is fundamentally flawed. Contrary to the popular conventional wisdom (repeated by our Baby Boomer p…

Well, it's throwing away money compared to home ownership, which also gives you a place to live. I don't know about hypothetical ultra-liquid markets, but in practise rent is usually higher than interest+maintenance fees over a longer period of time. Real estate investors need to make a profit, and so do banks, but the banks tend to have slimmer margins.

> Well, it's throwing away money compared to home ownership

It's still not "throwing away money", there are just different things that people value. I value being able to move whenever I want, wherever I want. To me that is worth potentially paying more. The same way some people value being dropped at their exact location with a taxi vs a close location with a bus: just because the bus costs less does not mean you are throwing money away with a taxi.

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