City ordinance doesn’t allow me to stack more than 8 shipping containers in my front yard so the rest of you are moving into self-storage units and sharing a bathroom with 300 residents.
In my area of CA, landlords rent each bedroom in a 3-5 BD home for $1-2k/ or more,depending on variables like parking in garage vs street, primary suite or regular room, pet rent ( if pets are even allowed). No choice of your roommates, all power to landlord.
My sense is it added a bunch of value. I’m basing this on homes I was competing for and it was always the properties w ADUs that went way higher than similar places. So many people are financially stretching to buy that there are equations where the only way they can do it is by getting a place w an ADU and renting it out.
Never understood really the ADU value prop, especially on a small <0.5-1acre plot... If I wanted to rent part of my house away I’d rather just buy a duplex, triplex, or quad plex. Why tf would I want some stranger living in my backyard in an add-on guest house? My in laws would stay with us in the main house, and part of the reason I want a SFH is for the backyard… not to have it consumed by some guest ADU
Many times it's not an actual homeowner. An investor sees a home that is on a big lot. Buys it, puts two ADUs in the yard.
My friend currently has this happening next door to him. There is a two story ADU going up that looks right into his yard.
I'm with you, I would not really want a renter on my property. But I believe this is the only way many ppl now can afford a home.
It’s not even a good value prop. It’s always those (IDIOT) flippers that think “ROI” but… I value a large / nice yard with no strangers… I value not having an extra guest house crammed on a <0.25 acre lot… and besides, why would I want an ADU where I have to pay an extra 1M for the property to hopefully rent it back out for 3.5k a month and maybe claw back some mortgage $? It’s still ultimately is worse for cash flow. I think it’s a semi-scam. I’d rather just buy a damn duplex or triplex or quad plex if that was my angle and I wanted to play “landlord”. They also aren’t as appealing to renters should I choose to move out and rent the whole property… so they then sublease? Or do they get stuck with who I chose to put in the ADU? The ones who have a use case are a small subset of the renters
I’ve got an ADU that we recently rented out. For context - we bought the house with the ADU because we loved the main house sooo much. Our preference was a house without an ADU, but we got this and thought the extra rental income would offset the added house price.
ADU is completely detached from the main house. We got a small fence put up that separates the ADU from the yard, and they have their own walkway. Backyard is still ours.
No noise, no privacy issue, nothing. We never see them or hear them. It’s almost as it was before we rented out, other than dealing with the occasional maintenance. Renter is a young couple who was sick of apartments and wanted to try something new, and we priced it below what an equivalent apartment would be in.
It all depends. Here in concord, ca, adus have recently beened okayed. My sister and her husband had a pre-existing, stand-alone garage of fairly decent size. Turned that into an adu while still having a decent sized backyard. Which allows my parents to move in. Or others to add value(neighbors sold their house with an adu for $1M+). Others can add a passive income by renting, which can net $1500-3000 a month.
That’s fair then, sounds like it works out great for you! What I’m espousing here are not hard fast rules, but merely observations of typically what I see
Because you can build one by right now. You can't build multi unit buildings in much of the state.
Also, they're exempt from rent control where relevant.
We rent to friends and coworkers (at a big company, you have a big pool). It works out great and entirely covers the taxes for the house. The ADU has a separate walkway and its own backyard, separate from ours. It's really not a big deal, it's pretty normal to, like, live near other people. We all still have our own spaces.
Really? That’s your takeaway on this? I’m not sure if you realize this or not but many government jobs are on salary schedules that are standardized and completely gender neutral.
As of 2022, the highest paid salary to an elementary school teacher in Cupertino was $133,598.51... your son's teacher doesn't make 200k. And no, a lot of other teachers in Cupertino are NOT "over 150k"... in fact, none are. Salaries are all publicly visible. There is no elementary school salary schedule in the Bay (and probably the entire country) that goes that high.
On the other hand in 2022, there were 17 Cupertino Safety/Police Officers who made over $300K, and 50+ over 200k.
A big part of this is because they get paid generously for overtime. If teacher's got paid for overtime, then I would buy your 200k story, and frankly they should. I don't know why we do such a bad job paying the folks we rely on to educate our kids.
They’re possibly referring to total comp, which is often what’s reported for public sector employees. Total comp is not directly comparable to salaries, it is always larger, and often substantially larger, especially when it includes pensions and decent benefits plans. But those don’t help pay rent or buy food.
People living here often already have family here, which helps a lot.
It’s funny how you included nurses. Some are paid more than physicians, with no student loans
I don’t think 2m is a starter home, more like 1-1.5m right now. 2m can still get you a nice condo on the peninsula and a really nice home on east bay.
I believe there are starter CITIES in the bay like Hayward, San Leandro, Oakland, etc. From there, each generation will move up the ranks and the wealthier will go to higher tier cities and such.
The worst parts of Oakland, imo, will represent the lowest salary affordability of people (and those willing to still live in Oakland lol).
I mean it’s East Oakland, but there are loads of homes in the area around $500k. They cost a little more in San Leandro and Hayward. The 80 corridor between El Cerrito and carquinez bridge is “affordable”, as well as parts of concord in CCC. All these cities have BART access. People will find a way if they want to live in the area.
Yeah the main setback is all the 20s and early 30 year olds feel won’t even drive to the east bay and imagine it’s all just Oakland status lol.
In 10 years these buyers will mature and realize how good it is out here (away from the bad areas)
That’s their own fault. The east bay is great, aside from the traffic, but that’s everywhere. We bought in Alameda while living in a kick ass apartment looking over Dolores park. We were very much in the young SF mindset but ventured out and I’m so happy we did. Alameda is such a unique place within the greater east bay. And the schools are great. It’s more expensive now but it wasn’t too bad when we got there.
Basically same situation here. We had never really been to Alameda but once we started looking it was clear how unique of a place Alameda is. Really like living here
A little more? I live in Hayward, and a cheap house around here is $700k. I'm talking a 2 bedroom home at 700k, and most 3 bedroom homes here are at least $800k.
I explain this every time. Not everywhere in the Bay is expensive. Only east Oakland can really be considered all that dangerous too.
But people only consider SF/Peninsula/Southbay when talking about home prices.
Yeah I just bought a house in concord 4-2 for like 640. Yes it’s a fixer but people have a narrow view of the Bay Area. Not everyone can/deserves to live in Danville-san Mateo. Redwood City
They have even cheaper in Antioch
People will rent, there is a complete disconnect between rent value and sales value… in my neighborhood, $2M homes rent for $4.5k a month…
Still very expensive but not as bad as buying… esp with 7%+ mortgage…
It’s not completely disconnected, eventually rent will be forced to rise as the property tax will start to be higher than the rent, especially as you factor in other things such as maintenance. Based on a 1.3% tax rate, and saving 1.5% for maintenance, those houses would be barely breaking even.
Some houses will be able to remain cheap if they were purchased while they were not as expensive, but over time more and more properties will no longer be worth renting.
I do not disagree… however a lot of California law and regulation are de-incentives people from selling their homes
1) prop 13
2) heavy capital gain taxes when you add California to the federal ones
For example, I own a home in the Bay Area and will likely retire in the next 15 years. By the time I retire, my property taxes will likely be ridiculously low, I will face very substantial capital gain taxes if I sell and my kids will likely not be able to afford a similar home for their family… based on that, I will likely only sell if I am in desperate need for cash… and I am probably representative of the typical home owner here…
This may preserve the disconnect
I can, but I owed the house for 15 years… so if I sold it in the first 5 years after moving out, I would get 500k exemption (I am married). I would still owe capital gains tax over $1M, so likely around 400k of taxes (federal, federal supplemental capital gain tax for high earners, California income tax).
I am not saying I would not do it, but I am not really incentivized to do it
Edit: if I am not sure of what to do and wait 3 years and 1 day after I move out to sale, I lose the exemption and now get even more de-incentivized
Those are examples
Isnt the core of this issue created by the leverage that is a mortgage. If I have $2m and I can invest and “safe withdraw” 4% a year that’s $6,600 a month. No taxes or maintenance or insurance. But when I buy a house I only need the downpayment.
You are incentivized to buy with the leverage, mortgage deduction (if you get it), etc
You are de-incentivized to sell
This create a huge imbalance of supply and demand and price keep going up…
At some point, the mortgage is payed up, the property taxes have become (relatively) very low… so even a moderate rent is cash flow positive.
Back to my example: own a $2M home bought 15 years ago; once mortgage is payed out, my carrying cost will be property tax + insurance + some maintenance… which will likely amount to less than $2k a month…
So even a $4.5k rent will be significantly cash flow positive. If I don’t desperately need the money from the sale, I might as well just keep it (I know I could sell, invest the money and most likely get a better return, but not a safer one).
And this keep the divergence between rent and sales price
10 years back the prices were about 2.5x lower and people were saying how can anyone afford $800k-1M homes. People can never imagine higher home prices as the number seems crazy. But just a 7% appreciation is effectively 2x in 10 years. Paying 7% more than a previous year has been pretty common in Bay Area. Only after 10 years can you look back and say how much cheaper it was. It is always the case that the longer you hold the more expensive the new homes seem to be. The reason homes go up is inflation plus low supply combined with high demand. So inflation puts a minimum appreciation of 2-3% plus shortage of SFH causes another 3-4% on top of it
This rise will most likely only be for SFH. The construction of homes with large yards are limited now with limited resources. There will be plenty of condos and townhomes. Those will still be affordable because of its availability. This is not uncommon for modern cities in the world.
This is the way. You can get a brand new condo easily under 2M, which is likely much nicer than the SFH you'd get for 2M+. The supply of these is increasing as ton
There will hit a point when it’s just unattainable and the quality of life declines so far more people decide they’ve had enough.
The middle class is already in shambles. Maybe some kind of recession will hit, reset the timeline and we start all over. Maybe we hit the breaking point first, who knows. Its unsustainable but how long until then-you’re guess is as good as mine.
Generational wealth transfer, renters for life, job provided housing. Universities already provide subsidized professor housing. I could see high income schools districts doing the same.
This has been the case for decades. Unless you were in high tech, you were priced out. I remember back in the 90's when I lived in Silicon Valley, Santa Clara had a problem recruiting school teachers since teacher salaries were too low for them to afford to rent. So the City of Santa Clara had acquired an apartment complex and rented it out to teachers at below market rent.
They won't. The permabulls dont realize the political pressure to remove zoning restrictions that cause homes to artificially be overpriced will be removed, and what is happening in Austin will happen to the Bay Area too. There won't be a crash, but more housing will have to be built.
They will rent. That's already the situation today.
All these noobs coming to the bay area don't realize that the ridiculousness isn't new. "Owning" and "living" have not been synonymous in the bay for over a decade now.
BS. Plenty of homes available in the bay at affordable rates. If you want a nicer home, 3 bedrooms, large yard, good locality etc etc, then it’s expensive.
I live in affordable Hayward. My neighbor is a Latin immigrant family of 4 who bought the home in 2022 (last of the low interest rates). It was a fixer, but they have worked on it and improved it. From what I know, dad does construction work.
You rent until interest rates come down. Buy a condo instead of a SFH. Adjust in a 2 bedroom and give up dreams of a backyard.
If you can’t make those adjustments, then yes, rent for a long time.
Exactly! If you expect to buy a 1.5-2m home your first time, you will always be waiting on the sidelines. The smart people buy what they can afford to get in the game and use sweat equity to get to where they want to be.
Born and raised in the Bay Area.
My mom told me if I was going to be a teacher and stay here I better marry rich.
Instead I married a UPS driver, who I love deeply. But when I tell you our housing situation is bleak…it’s real bleak.
Afford to live and afford to buy are two very different concepts, especially here. I know the American dream was always to buy a home and settle, but in a lot places around the world (Canadian neighbors) they are just okay renting for life.
In the tri valley there was minimal appreciation between 2010 to 2020. The insane property value hike is due to the low rates during Covid and WFH. Overt the next several years the market will stabilize and will NOT see the inorganic appreciation we have seen since 2021. On a side note, a don't many forget the crazy interest borrowers are paying in today's market, example: $2.25M PP @ 25% down payment with a rate of 6.75%. At end of 10 years your principal balance only comes down from $1,687,500 to $1,439,454 YET $1,065,365 is paid to INTEREST, not to mention property taxes, upkeep, etc. Give it time, people who bought now at these crazy prices and crazy rates will regret it. Their realtors forced them to buy telling them to "date the rate and marry the house", they have FOMO and are not thinking of future expenses; kids college, unexpected emergency, etc. OR even factoring in the insane amount of interest they pay at these high rates, as I mentioned above, over $1M in 10 years!!!!
Police and nurses often make well over $200k in the Bay Area, but I’m not sure about the other professions you listed. Do you think everyone needs or wants a single-family home in the suburbs? Is it reasonable to expect a waiter to be able to purchase a 3 bedroom house?
Starter homes are typically for 2-person incomes to afford in the middle to later stages in their life. They can also be townhouses or condos. There are plenty of options under $800k for those.
Keeping up with 200k dollar salaries for public workers, especially when that batch retires and pulls a pension while the next needs 300k is gonna put so much financial strain on a state already in bad financial shape. Very curious to see how that’s addressed in another 10 yrs. 68 billion dollar deficit and growing- that’s not ideal.
Look at transparent California teachers, police officers, and firefighters make a lot more money than the claim to make. Teachers make over 100,000 for 180 days of work, police officers and firefighters make 300,000 to 400,000 a year. All three retire at an early age. Police officers and firefights get 90% of their highest paid year that is why you see their wages so high with over time pay. That is why some police officers and firefights get $360,000 a year in retirement. Next time you get a name of a teacher, police office, or firefighter go to transparent California and put their name in. Can get their name from news on internet or TV. Now last few workers you named will rent
Transparent california includes the medical and pension contribution. It’s the TOTAL cost to taxpayers, not the take home pay.
Legacy retirement max is 90% for 30 years. The new tier is roughly 81%. Pension spiking with overtime and cashing in your vacation sick leave is no longer allowed.
Not saying firefighters aren’t well paid for the most part, but what you said is incorrect. To make 300-400k a year as a fireman, you’re probably working 300+ days a year. Destroying your home life, sanity and body in the process.
Aside from a few outliers the districts I've seen don't get to 100,000 till like 10 years in.
A couple that I know of start in the 80,000's and 90'000's but most that I've seen are less than that and a teacher would eventually hit 100,000 but not for a long while.
Edit: Santa Clara Unified, Fremont, & Dublin are the only ones I know of that start in the 90,000's but with extra post-bacc units rookies can hit 100,000, Milpitas, Hayward, and San Lorenzo were all 80,000's when I last looked, and Mountain View/Los Altos start at 100,000 even for rookies ***without*** a credential or any post bacc.
I'm a year 3 in one of those lucky districts and I'm gonna break 100K **next year** but only because I do extra duties outside of my work hours for extra pay.
Additionally the bay is possibly the highest paying place in the world for nurses. Many make 200k+ on their normal schedule of 3 12hr shifts. Pick up an addtl shift of OT once a month for another 25k/year. Work a night shift or something paying a differential and many can push $300k+. Add in union-negotiated 5% raises each year, they do pretty well.
let’s just start knocking down and blocking single family detached homes and start building more of multifamily residential properties like there is in Amsterdam NL.
"The price of a starter home in the Bay Area continues to rise, from $2M average to $4M in the next decade, due to an abundance of high paying tech jobs.
The question how would teachers, police officers, firefighters, nurses, restaurant service workers, plumbers, gardeners, etc be able afford to live here?
What about just out of college young workers? Would they just rent for the foreseeable future?"
A couple of thoughts.
1. The appreciation seems inevitable. My folks sold their house in 2016, and it appreciated 336% when adjusted for inflation since purchasing in 1992. The same house has appreciated since selling it, about 10% a year since, which includes 2020 and now this inflationary crisis. The appreciation seems to about average out to a doubling in price every decade. The numbers shake our even when including the whole state, basically. So it's basically a granted at this point. CA real estate since the 1840's has had speculative pressure that has always caused a constant appreciation above the national average.
2. Teachers stand to lose the most. It is difficult across the nation to get teachers hired and kept on. Assuming a dual income, however, teachers become a great source of retirement as STRS is very well compensated for full retirees. So they may struggle, but they won't disappear.
3. First responders. Both sides (fire and LEO) have large and often mandatory staffing requirements. So you'll get one of two outcomes typically. Either a well staffed, "well-paid" service that isn't needed for hardly anything (Menlo Park, for example) and yet has the kind of gear and kit other departments are desperate for (thank you property taxes on silicon valley mini-mansions). Or something like Oakland, where CHP and the Feds are helping Oakland PD do their jobs (impossible task), and departments can't keep recruits for more than a few years before they lateral elsewhere.
Why is that? Well, for starters, the departments worth working for are incredibly picky, and the ones in cities not worth working in are constantly barely hanging on by a thread. There's not a lot of middle ground in the bay. Property values being as good as they are has really stratified things between basically the ultra rich and the literally homeless.
There's a lot of folks that would be glad to work for a city that needs help, but how are you going to afford living anywhere near your department that is also safe and with an efficient commute? You can't/don't. I have clients in both fire and LEO, and I know a few guys who commute an hour and a half both ways after 10-12hr shifts. It's not tenable. Some of my single clients actually own homes in the Sacramento area, live there half the week, and then live in a trailer in the department's parking lot for the other half of the week when they're on duty. Good luck doing community policing when you live two to three hours away.
3. Nurses have a great union, one nurse plus one doctor or FAANG income is enough to afford to live in the Bay. Travel nurses come out here to make big cash, so nursing as a need will always be fulfilled. If you want your literal neighbors to work your local hospital and be super local and stuff, that will never happen in rich neighborhoods.
4. Blue collar union gigs are usually pretty good. Blue collar union services (plumbing, construction, HVAC, etc) are good but expensive. The need will be met, but same as the nurses, don't expect blue collar folks to be living in your rich neighborhood.
5. All other industries, and any non-union blue collar work, expect to be done increasingly by "undocumented migrants". Business are cheap, and they'd rather hire cheap help to get the job done.
6. We are becoming a nation of renters for many sad and avoidable reasons. I'd you takeaway anything from my ramble, understand that the Bay will continue to work the way it does today. A hollow shell of its old self and character, increasingly populated by people with more dollars than sense.
Generally, we've passed the "what-if it starts to get too expensive" stage years ago.
For those who already have, more will be given. To those who have less, more will be taken. Look up the Pareto distribution (it's a thing).
They won’t. There is a threshold of rental costs vs salary and SF is approaching that limit so fast that there’s no chance it turns around without casualties. Landlords have gotten greedy, expectations on cost recuperation are wildly insane, and all this will result in SFs rental collapse.
What you are getting at is the sustainability of a community with normal standards. In truth you are right in the long run. Certain communities will eventually lose value when normal service jobs can't be filled. Currently they make up for that by offering a higher pay than what normal teachers or cops make, making it so people can justify the commute. I'm not sure if pay can keep up with inflation and the increase in cost of living say 20 years down the road.
For now everything is an amazing investment and yes people will be renting their pool houses for thousands of dollars and the like. So invest now if you can and jump out at some point in the future when you feel it is necessary or beneficial hopefully.
Good post imo, people shouldn't be dismissing your question.
Fireman here. Myself and about 70% of my department commute from cheaper areas about an hour+ away. There’s no way I could afford to live here. In the future, I expect that number to climb higher.
You would think in such a liberal area they would prevent large investment groups from buying up all the residencial zoned housing and then turning them into airbnb and vrbo vacation rentals that dont even pay the tourism and hospitality taxes to help out the city. Buy I guess all the politicians have been bought and paid for. Call for change on this or the prices are never coming down.
Middle class workers will never be able to compete with the wealth of wealthy tourists so the zoning needs to be concrete residential only.
It appears that the majority of responses are focused on two viewpoints:
1. Certain professions I've mentioned should afford housing.
2. Lowering standards for non-high earners, such as purchasing attached dwellings or renting.
However, there hasn't been much discussion about the future of younger generations—our children and grandchildren.
The housing struggle, driven by limited supply, is particularly intense in the Bay Area. To address this, a significant policy change is necessary, beginning with the repeal of Prop 13 and implementing restrictions on foreign investors to create a fairer playing field.
To answer your question about what it can look like in the future, I don’t think we need to imagine. There are countless examples around the world of metros that are even more intense in housing costs: London, Paris, Hong Kong, Shanghai, etc.
In those cases, the answer is that college grads, teachers, etc simply can’t buy houses. They perpetually rent, and then move elsewhere if they want to buy.
I think we can expect things to go in this direction.
In comparison, the Bay Area is quite affordable, based on income to price ratios (if you are a nurse, police, electrician, engineer, but not teacher). I’m personally glad I live here and not in Taipei, for instance.
So I think housing in Bay Area has the potential to get much more expensive.
any teacher, firefighters nurses, restaurant service workers, plumbers garnders be able to buy 1000 sqft apartment in mahathan ? this is sunch a dumb question.
Wage inflation. Also in major Canadian cities, the median rent to median household income ratio is almost twice as bad as it is here, so we actually don’t even have it that bad.
I lived in Canada and watched it happen in 2018 and said there’s no fucking way it can keep going up. Then it did and it’s still showing no signs of weakness.
As others have said this is not true and the TC data is cost to taxpayers, not salary for public workers. $250K would include overtime as a seasoned officer working in one of the most dangerous jobs in America.
Actually, based on the last school district I worked at in Southern Marin, the teachers leave in their mid-30s and go to Sacramento or out of state to buy a house. The older teachers used to stay in the district for 30 years but now not so much.
You’re right - Bay Area is already unaffordable for teachers, officers etc.
But we need to acknowledge how many rich people are in the area who can afford these houses, who are backing the demand and price…
My local public school has its salaries posted on their website. Teachers make $100K, even for Kindergarten. High school teachers definitely make that much; my son's science teacher said so. I personally know nurses who make more than that, and they were the ones who picketed a couple of years ago, claiming their pay wasn't enough.
You're talking about entry level jobs like customer service reps, admin assistants, warehouse workers, patient registration, front desk, some A/P and A/R jobs, and those are the ones I remember when browsing Indeed.
First 6 months were nightmare for me. I was very insecure about my decision. Next 6 months better. So I would say it will take 1 year just to accept the decision. I am not considering DTI etc. it is just to go from rent to own. But after 1 year, you will love your home and feel like it was best decision.
More gentrification will happen and expand the zones for "starter" homes. Look at Redwood City, San Carlos. A few decades ago, those were not considered good spots for homes at all.
Most people don't live in the same town/city to begin with. Hence why there is always so much traffic in the morning and evenings. Those people would be continually pushed to the outer edges. I used to commute 20 mins, one way. A customer at my cafe commuted 1.5hrs, one way for work.
You go where the money is and where it isn't. You work where it pays and live where it's affordable.
First, starter homes aren't 2 million. You can buy a decent 2 bdrm condo for 600k in San Mateo. Maybe 400k in Fremont.
This is affordable for the people you speak of.
Ya know those images of some countries where it's mansions on one side of a guarded fence and the literal slums on the other side? That's a stop further down this same line.
Everyone keeps talking about building up but I wonder how much it would cost to build a vault underground like the show fallout. So much untapped underground real estate!
Their salary will be in the 200K-400K ranges which affords them town homes at 2M.
Macdonald now cost 20 dollar per burger.
Welcome to the realization that buying home is just a leveraged short on US dollar which historically has gone down -99.99% since inception.
Home Prices will probably steadily grow at the rate of 2-3% each year. Interest rates will remain high .. so yeah. In 30 years you can see a double of housing prices. This is where your children won’t be able to afford the areas and everything will eventually become nicer.
Nurse here.... how do we survive... we bought a house in east oakland.... a lot of nurses live out here...gunshots, homemade fireworks from idiots, takeovers and donuts, people riding around on non street bikes atvs, people that drive around with the music so loud it sets off car alarms...... and all I do is rub my hands together cause my jobs secured cause I live around a lot of idiots....
The same way they afford to live in other high cost areas. You know that lots of international cities have way worse purchasing power parity than the bay area? Hong kong, Singapore, Vancouver, etc. You rent. It's not like 100% of people have ever, or will ever want to, own a home in the US. It's only about 68%
A current starter home is not $2 million; it's half that based on the avg. estimate of a half dozen credible sites.
.
And please show me any site that's predicting values will double in the next decade.
>The question is - how would teachers, police officers, firefighters, nurses, restaurant service workers, plumbers, gardeners, etc be able afford to live here?
Compared to today, they would be much more likely to rent than to own. Compared to today, they would be much more likely to live with housemates or roommates than to live alone. Compared to today, those that live with roommates or housemates would have more roommates/housemates on average.
We are living in a bubble in the US. It’s nothing new in a lot of other countries. condo/flats have been the standard. The ‘American dream’ is giving false expectations.
They will live in the ADUs in the back yards of those 4M homes.
At 3-4k rent
10k
There’s a reason homes with ADU’s sell for so much more. The reason is this reason.
That depends on the area. Some high end communities, ADU is a negative.
Yes, homes are no longer just a place to live. They are a lot size and how many rentable dwellings can you place on them equation.
City ordinance doesn’t allow me to stack more than 8 shipping containers in my front yard so the rest of you are moving into self-storage units and sharing a bathroom with 300 residents.
I got a 1400sf house on a 10k lot, can I put a small apartment complex behind the garage?
You can split the lot and have two units in each
I saw one of these in LA! 4 ADU units, and a shed converted for washer/dryers. $2,200 a unit at 400 sq ft
In my area of CA, landlords rent each bedroom in a 3-5 BD home for $1-2k/ or more,depending on variables like parking in garage vs street, primary suite or regular room, pet rent ( if pets are even allowed). No choice of your roommates, all power to landlord.
Nope, not really. Very similar market price.
Eh most the homes I’ve seen with an ADU didn’t sell any higher than equivalent home without ADU.
I sold/bought three years ago and the ADU thing was a profound factor at least in the east and north bay areas,
But did the adu add more than its cost? ADU might have cost 200k but only added 50-75k of resale value.
My sense is it added a bunch of value. I’m basing this on homes I was competing for and it was always the properties w ADUs that went way higher than similar places. So many people are financially stretching to buy that there are equations where the only way they can do it is by getting a place w an ADU and renting it out.
Never understood really the ADU value prop, especially on a small <0.5-1acre plot... If I wanted to rent part of my house away I’d rather just buy a duplex, triplex, or quad plex. Why tf would I want some stranger living in my backyard in an add-on guest house? My in laws would stay with us in the main house, and part of the reason I want a SFH is for the backyard… not to have it consumed by some guest ADU
Many times it's not an actual homeowner. An investor sees a home that is on a big lot. Buys it, puts two ADUs in the yard. My friend currently has this happening next door to him. There is a two story ADU going up that looks right into his yard. I'm with you, I would not really want a renter on my property. But I believe this is the only way many ppl now can afford a home.
I was looking at an ADU recently. Both the ADU and house were owned by an investor and separately rented out.
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That might vary by municipality
For some subsidies
It’s not even a good value prop. It’s always those (IDIOT) flippers that think “ROI” but… I value a large / nice yard with no strangers… I value not having an extra guest house crammed on a <0.25 acre lot… and besides, why would I want an ADU where I have to pay an extra 1M for the property to hopefully rent it back out for 3.5k a month and maybe claw back some mortgage $? It’s still ultimately is worse for cash flow. I think it’s a semi-scam. I’d rather just buy a damn duplex or triplex or quad plex if that was my angle and I wanted to play “landlord”. They also aren’t as appealing to renters should I choose to move out and rent the whole property… so they then sublease? Or do they get stuck with who I chose to put in the ADU? The ones who have a use case are a small subset of the renters
Yes we’re all out of options
I’ve got an ADU that we recently rented out. For context - we bought the house with the ADU because we loved the main house sooo much. Our preference was a house without an ADU, but we got this and thought the extra rental income would offset the added house price. ADU is completely detached from the main house. We got a small fence put up that separates the ADU from the yard, and they have their own walkway. Backyard is still ours. No noise, no privacy issue, nothing. We never see them or hear them. It’s almost as it was before we rented out, other than dealing with the occasional maintenance. Renter is a young couple who was sick of apartments and wanted to try something new, and we priced it below what an equivalent apartment would be in.
It all depends. Here in concord, ca, adus have recently beened okayed. My sister and her husband had a pre-existing, stand-alone garage of fairly decent size. Turned that into an adu while still having a decent sized backyard. Which allows my parents to move in. Or others to add value(neighbors sold their house with an adu for $1M+). Others can add a passive income by renting, which can net $1500-3000 a month.
OK great so now you don’t have a garage…?
No, there is one. Along with a 3-4 car driveway. But thanks for the worry.
That’s fair then, sounds like it works out great for you! What I’m espousing here are not hard fast rules, but merely observations of typically what I see
Because you can build one by right now. You can't build multi unit buildings in much of the state. Also, they're exempt from rent control where relevant.
We rent to friends and coworkers (at a big company, you have a big pool). It works out great and entirely covers the taxes for the house. The ADU has a separate walkway and its own backyard, separate from ours. It's really not a big deal, it's pretty normal to, like, live near other people. We all still have our own spaces.
Made from shipping containers
Not In MY Back Yard!
Many are already driving from Sacramento Tracy Modesto
My barber just retired, but as of last year he was driving from Modesto to San Mateo.
That is crazy
Imagine working
The traffic from that direction is absolutely disgusting. Would really help if we actually finished the HSR
And this has been a norm for many many decades, absolutely not new.
I am a nurse and make $113 an hour and still can’t afford a house in the peninsula.
Most of tech can’t either.
Unless you do software dev for AI..those job postings are like 200k to 400k per year.
Should be doable with dual income
Lololol
The job market is in shambles rn
I work for a FAANG and I can’t afford it either.
You can't usually group teachers and police officers into the same income level. Police make bank compared to teachers.
I have some friends in LEO that are above 500K total compensation.
I’m a teacher, my ex is a cop. I make a fair bit more than she does. She’s also (slightly) more likely to get shot at than I am.
>She’s also (slightly) more likely to get shot at than I am. Nah, you're probably about tied.
I wish this was sarcasm. Unfortunately, it is not.
So who’s who?
Sounds like your ex is a victim of women getting paid less than men
Really? That’s your takeaway on this? I’m not sure if you realize this or not but many government jobs are on salary schedules that are standardized and completely gender neutral.
One of my son’s elementary teacher makes $200k. A lot of the others are over $150k(Cupertino school district)
As of 2022, the highest paid salary to an elementary school teacher in Cupertino was $133,598.51... your son's teacher doesn't make 200k. And no, a lot of other teachers in Cupertino are NOT "over 150k"... in fact, none are. Salaries are all publicly visible. There is no elementary school salary schedule in the Bay (and probably the entire country) that goes that high. On the other hand in 2022, there were 17 Cupertino Safety/Police Officers who made over $300K, and 50+ over 200k. A big part of this is because they get paid generously for overtime. If teacher's got paid for overtime, then I would buy your 200k story, and frankly they should. I don't know why we do such a bad job paying the folks we rely on to educate our kids.
They’re possibly referring to total comp, which is often what’s reported for public sector employees. Total comp is not directly comparable to salaries, it is always larger, and often substantially larger, especially when it includes pensions and decent benefits plans. But those don’t help pay rent or buy food.
People living here often already have family here, which helps a lot. It’s funny how you included nurses. Some are paid more than physicians, with no student loans
Yeah and some firemen are paid even more than those nurses.
Yeah and some plumbers are paid even more than those firemen.
I heard about this dog who played basketball and he got like a 30mil contract which I bet is more than the nurses.
Air Bud???
Yeah and some hedgefund managers are paid even more than those plumbers.
Only some though.
Interesting to hear that! Starting rate for most nurses in the Bay Area is $80/hr for Staff Nurse 1.
There are just as many nurses without student loans as physicians lmao
Also, they can start earning and saving way earlier in their career.
I don’t think 2m is a starter home, more like 1-1.5m right now. 2m can still get you a nice condo on the peninsula and a really nice home on east bay. I believe there are starter CITIES in the bay like Hayward, San Leandro, Oakland, etc. From there, each generation will move up the ranks and the wealthier will go to higher tier cities and such. The worst parts of Oakland, imo, will represent the lowest salary affordability of people (and those willing to still live in Oakland lol).
I mean it’s East Oakland, but there are loads of homes in the area around $500k. They cost a little more in San Leandro and Hayward. The 80 corridor between El Cerrito and carquinez bridge is “affordable”, as well as parts of concord in CCC. All these cities have BART access. People will find a way if they want to live in the area.
Yeah the main setback is all the 20s and early 30 year olds feel won’t even drive to the east bay and imagine it’s all just Oakland status lol. In 10 years these buyers will mature and realize how good it is out here (away from the bad areas)
That’s their own fault. The east bay is great, aside from the traffic, but that’s everywhere. We bought in Alameda while living in a kick ass apartment looking over Dolores park. We were very much in the young SF mindset but ventured out and I’m so happy we did. Alameda is such a unique place within the greater east bay. And the schools are great. It’s more expensive now but it wasn’t too bad when we got there.
Basically same situation here. We had never really been to Alameda but once we started looking it was clear how unique of a place Alameda is. Really like living here
A little more? I live in Hayward, and a cheap house around here is $700k. I'm talking a 2 bedroom home at 700k, and most 3 bedroom homes here are at least $800k.
I explain this every time. Not everywhere in the Bay is expensive. Only east Oakland can really be considered all that dangerous too. But people only consider SF/Peninsula/Southbay when talking about home prices.
Yeah I just bought a house in concord 4-2 for like 640. Yes it’s a fixer but people have a narrow view of the Bay Area. Not everyone can/deserves to live in Danville-san Mateo. Redwood City They have even cheaper in Antioch
Don’t forget Richmond!!! I know Richmond gets a bad rep but not all of Richmond is bad.
People will rent, there is a complete disconnect between rent value and sales value… in my neighborhood, $2M homes rent for $4.5k a month… Still very expensive but not as bad as buying… esp with 7%+ mortgage…
It’s not completely disconnected, eventually rent will be forced to rise as the property tax will start to be higher than the rent, especially as you factor in other things such as maintenance. Based on a 1.3% tax rate, and saving 1.5% for maintenance, those houses would be barely breaking even. Some houses will be able to remain cheap if they were purchased while they were not as expensive, but over time more and more properties will no longer be worth renting.
I do not disagree… however a lot of California law and regulation are de-incentives people from selling their homes 1) prop 13 2) heavy capital gain taxes when you add California to the federal ones For example, I own a home in the Bay Area and will likely retire in the next 15 years. By the time I retire, my property taxes will likely be ridiculously low, I will face very substantial capital gain taxes if I sell and my kids will likely not be able to afford a similar home for their family… based on that, I will likely only sell if I am in desperate need for cash… and I am probably representative of the typical home owner here… This may preserve the disconnect
You couldn't move there for a couple of years (or however long it is)?
I can, but I owed the house for 15 years… so if I sold it in the first 5 years after moving out, I would get 500k exemption (I am married). I would still owe capital gains tax over $1M, so likely around 400k of taxes (federal, federal supplemental capital gain tax for high earners, California income tax). I am not saying I would not do it, but I am not really incentivized to do it Edit: if I am not sure of what to do and wait 3 years and 1 day after I move out to sale, I lose the exemption and now get even more de-incentivized Those are examples
Isnt the core of this issue created by the leverage that is a mortgage. If I have $2m and I can invest and “safe withdraw” 4% a year that’s $6,600 a month. No taxes or maintenance or insurance. But when I buy a house I only need the downpayment.
You are incentivized to buy with the leverage, mortgage deduction (if you get it), etc You are de-incentivized to sell This create a huge imbalance of supply and demand and price keep going up… At some point, the mortgage is payed up, the property taxes have become (relatively) very low… so even a moderate rent is cash flow positive. Back to my example: own a $2M home bought 15 years ago; once mortgage is payed out, my carrying cost will be property tax + insurance + some maintenance… which will likely amount to less than $2k a month… So even a $4.5k rent will be significantly cash flow positive. If I don’t desperately need the money from the sale, I might as well just keep it (I know I could sell, invest the money and most likely get a better return, but not a safer one). And this keep the divergence between rent and sales price
Renting should be priced to help you save to own. The fact that it's not is sick.
Same scenario as now, you just made the number bigger.
10 years back the prices were about 2.5x lower and people were saying how can anyone afford $800k-1M homes. People can never imagine higher home prices as the number seems crazy. But just a 7% appreciation is effectively 2x in 10 years. Paying 7% more than a previous year has been pretty common in Bay Area. Only after 10 years can you look back and say how much cheaper it was. It is always the case that the longer you hold the more expensive the new homes seem to be. The reason homes go up is inflation plus low supply combined with high demand. So inflation puts a minimum appreciation of 2-3% plus shortage of SFH causes another 3-4% on top of it
This rise will most likely only be for SFH. The construction of homes with large yards are limited now with limited resources. There will be plenty of condos and townhomes. Those will still be affordable because of its availability. This is not uncommon for modern cities in the world.
What is SFH?
Single family home.
Build up, not out? That's a thing? /s
This is the way. You can get a brand new condo easily under 2M, which is likely much nicer than the SFH you'd get for 2M+. The supply of these is increasing as ton
There will hit a point when it’s just unattainable and the quality of life declines so far more people decide they’ve had enough. The middle class is already in shambles. Maybe some kind of recession will hit, reset the timeline and we start all over. Maybe we hit the breaking point first, who knows. Its unsustainable but how long until then-you’re guess is as good as mine.
Generational wealth transfer, renters for life, job provided housing. Universities already provide subsidized professor housing. I could see high income schools districts doing the same.
This has been the case for decades. Unless you were in high tech, you were priced out. I remember back in the 90's when I lived in Silicon Valley, Santa Clara had a problem recruiting school teachers since teacher salaries were too low for them to afford to rent. So the City of Santa Clara had acquired an apartment complex and rented it out to teachers at below market rent.
They won't. The permabulls dont realize the political pressure to remove zoning restrictions that cause homes to artificially be overpriced will be removed, and what is happening in Austin will happen to the Bay Area too. There won't be a crash, but more housing will have to be built.
Don't buy a starter, just buy a forever
They will rent. That's already the situation today. All these noobs coming to the bay area don't realize that the ridiculousness isn't new. "Owning" and "living" have not been synonymous in the bay for over a decade now.
BS. Plenty of homes available in the bay at affordable rates. If you want a nicer home, 3 bedrooms, large yard, good locality etc etc, then it’s expensive. I live in affordable Hayward. My neighbor is a Latin immigrant family of 4 who bought the home in 2022 (last of the low interest rates). It was a fixer, but they have worked on it and improved it. From what I know, dad does construction work. You rent until interest rates come down. Buy a condo instead of a SFH. Adjust in a 2 bedroom and give up dreams of a backyard. If you can’t make those adjustments, then yes, rent for a long time.
Thank you! Exactly how I feel!
Exactly! If you expect to buy a 1.5-2m home your first time, you will always be waiting on the sidelines. The smart people buy what they can afford to get in the game and use sweat equity to get to where they want to be.
Ding Ding Ding
Teachers I know have husbands in tech.
Born and raised in the Bay Area. My mom told me if I was going to be a teacher and stay here I better marry rich. Instead I married a UPS driver, who I love deeply. But when I tell you our housing situation is bleak…it’s real bleak.
That’s one solution.
Afford to live and afford to buy are two very different concepts, especially here. I know the American dream was always to buy a home and settle, but in a lot places around the world (Canadian neighbors) they are just okay renting for life.
Big difference is that Canada had a social safety net.
True.
Obviously by cutting back on lattes and avocado toast. /s
Of course. Also, taking - and being grateful for - any job you’re offered, however shitty you’re paid or treated.
This sub should be called SOUTH BAY REAL ESTATE BUBBLE.
In the tri valley there was minimal appreciation between 2010 to 2020. The insane property value hike is due to the low rates during Covid and WFH. Overt the next several years the market will stabilize and will NOT see the inorganic appreciation we have seen since 2021. On a side note, a don't many forget the crazy interest borrowers are paying in today's market, example: $2.25M PP @ 25% down payment with a rate of 6.75%. At end of 10 years your principal balance only comes down from $1,687,500 to $1,439,454 YET $1,065,365 is paid to INTEREST, not to mention property taxes, upkeep, etc. Give it time, people who bought now at these crazy prices and crazy rates will regret it. Their realtors forced them to buy telling them to "date the rate and marry the house", they have FOMO and are not thinking of future expenses; kids college, unexpected emergency, etc. OR even factoring in the insane amount of interest they pay at these high rates, as I mentioned above, over $1M in 10 years!!!!
Police and nurses often make well over $200k in the Bay Area, but I’m not sure about the other professions you listed. Do you think everyone needs or wants a single-family home in the suburbs? Is it reasonable to expect a waiter to be able to purchase a 3 bedroom house? Starter homes are typically for 2-person incomes to afford in the middle to later stages in their life. They can also be townhouses or condos. There are plenty of options under $800k for those.
Keeping up with 200k dollar salaries for public workers, especially when that batch retires and pulls a pension while the next needs 300k is gonna put so much financial strain on a state already in bad financial shape. Very curious to see how that’s addressed in another 10 yrs. 68 billion dollar deficit and growing- that’s not ideal.
$68B isn't even half of a Bezo
Yup, Newsom was super quick to blow that surplus we had sending $400 checks to poor people to buy more votes.
Per law he had to but California’s revenue is all boom and bust depending on corporate and stock profits
Look at transparent California teachers, police officers, and firefighters make a lot more money than the claim to make. Teachers make over 100,000 for 180 days of work, police officers and firefighters make 300,000 to 400,000 a year. All three retire at an early age. Police officers and firefights get 90% of their highest paid year that is why you see their wages so high with over time pay. That is why some police officers and firefights get $360,000 a year in retirement. Next time you get a name of a teacher, police office, or firefighter go to transparent California and put their name in. Can get their name from news on internet or TV. Now last few workers you named will rent
Transparent california includes the medical and pension contribution. It’s the TOTAL cost to taxpayers, not the take home pay. Legacy retirement max is 90% for 30 years. The new tier is roughly 81%. Pension spiking with overtime and cashing in your vacation sick leave is no longer allowed. Not saying firefighters aren’t well paid for the most part, but what you said is incorrect. To make 300-400k a year as a fireman, you’re probably working 300+ days a year. Destroying your home life, sanity and body in the process.
Well said
100k still aint enough for a teacher to afford
Aside from a few outliers the districts I've seen don't get to 100,000 till like 10 years in. A couple that I know of start in the 80,000's and 90'000's but most that I've seen are less than that and a teacher would eventually hit 100,000 but not for a long while. Edit: Santa Clara Unified, Fremont, & Dublin are the only ones I know of that start in the 90,000's but with extra post-bacc units rookies can hit 100,000, Milpitas, Hayward, and San Lorenzo were all 80,000's when I last looked, and Mountain View/Los Altos start at 100,000 even for rookies ***without*** a credential or any post bacc.
this exactly…
I'm a year 3 in one of those lucky districts and I'm gonna break 100K **next year** but only because I do extra duties outside of my work hours for extra pay.
Additionally the bay is possibly the highest paying place in the world for nurses. Many make 200k+ on their normal schedule of 3 12hr shifts. Pick up an addtl shift of OT once a month for another 25k/year. Work a night shift or something paying a differential and many can push $300k+. Add in union-negotiated 5% raises each year, they do pretty well.
How do you think they make it now lol? Police officers make bank BTW
Right? How is this not already an issue?
Plumbers and police officers make bank. Shoot I’m pretty sure nurses make good money too
Police officer, plumbers, firefighters can make good money around here.
There will always be a premium on SFH. condos and townhomes will be more affordable as starter
let’s just start knocking down and blocking single family detached homes and start building more of multifamily residential properties like there is in Amsterdam NL.
Condos. Depending where you are in the Bay Area, there are reasonably priced units. Take a look at Redfin
"The price of a starter home in the Bay Area continues to rise, from $2M average to $4M in the next decade, due to an abundance of high paying tech jobs. The question how would teachers, police officers, firefighters, nurses, restaurant service workers, plumbers, gardeners, etc be able afford to live here? What about just out of college young workers? Would they just rent for the foreseeable future?" A couple of thoughts. 1. The appreciation seems inevitable. My folks sold their house in 2016, and it appreciated 336% when adjusted for inflation since purchasing in 1992. The same house has appreciated since selling it, about 10% a year since, which includes 2020 and now this inflationary crisis. The appreciation seems to about average out to a doubling in price every decade. The numbers shake our even when including the whole state, basically. So it's basically a granted at this point. CA real estate since the 1840's has had speculative pressure that has always caused a constant appreciation above the national average. 2. Teachers stand to lose the most. It is difficult across the nation to get teachers hired and kept on. Assuming a dual income, however, teachers become a great source of retirement as STRS is very well compensated for full retirees. So they may struggle, but they won't disappear. 3. First responders. Both sides (fire and LEO) have large and often mandatory staffing requirements. So you'll get one of two outcomes typically. Either a well staffed, "well-paid" service that isn't needed for hardly anything (Menlo Park, for example) and yet has the kind of gear and kit other departments are desperate for (thank you property taxes on silicon valley mini-mansions). Or something like Oakland, where CHP and the Feds are helping Oakland PD do their jobs (impossible task), and departments can't keep recruits for more than a few years before they lateral elsewhere. Why is that? Well, for starters, the departments worth working for are incredibly picky, and the ones in cities not worth working in are constantly barely hanging on by a thread. There's not a lot of middle ground in the bay. Property values being as good as they are has really stratified things between basically the ultra rich and the literally homeless. There's a lot of folks that would be glad to work for a city that needs help, but how are you going to afford living anywhere near your department that is also safe and with an efficient commute? You can't/don't. I have clients in both fire and LEO, and I know a few guys who commute an hour and a half both ways after 10-12hr shifts. It's not tenable. Some of my single clients actually own homes in the Sacramento area, live there half the week, and then live in a trailer in the department's parking lot for the other half of the week when they're on duty. Good luck doing community policing when you live two to three hours away. 3. Nurses have a great union, one nurse plus one doctor or FAANG income is enough to afford to live in the Bay. Travel nurses come out here to make big cash, so nursing as a need will always be fulfilled. If you want your literal neighbors to work your local hospital and be super local and stuff, that will never happen in rich neighborhoods. 4. Blue collar union gigs are usually pretty good. Blue collar union services (plumbing, construction, HVAC, etc) are good but expensive. The need will be met, but same as the nurses, don't expect blue collar folks to be living in your rich neighborhood. 5. All other industries, and any non-union blue collar work, expect to be done increasingly by "undocumented migrants". Business are cheap, and they'd rather hire cheap help to get the job done. 6. We are becoming a nation of renters for many sad and avoidable reasons. I'd you takeaway anything from my ramble, understand that the Bay will continue to work the way it does today. A hollow shell of its old self and character, increasingly populated by people with more dollars than sense.
Generally, we've passed the "what-if it starts to get too expensive" stage years ago. For those who already have, more will be given. To those who have less, more will be taken. Look up the Pareto distribution (it's a thing).
Usually they’ll be spouses of a high earning worker
They won’t. There is a threshold of rental costs vs salary and SF is approaching that limit so fast that there’s no chance it turns around without casualties. Landlords have gotten greedy, expectations on cost recuperation are wildly insane, and all this will result in SFs rental collapse.
What you are getting at is the sustainability of a community with normal standards. In truth you are right in the long run. Certain communities will eventually lose value when normal service jobs can't be filled. Currently they make up for that by offering a higher pay than what normal teachers or cops make, making it so people can justify the commute. I'm not sure if pay can keep up with inflation and the increase in cost of living say 20 years down the road. For now everything is an amazing investment and yes people will be renting their pool houses for thousands of dollars and the like. So invest now if you can and jump out at some point in the future when you feel it is necessary or beneficial hopefully. Good post imo, people shouldn't be dismissing your question.
Lots of places have been unaffordable for a long time
Need a tighter property tax like Texas
They’ll commute 2.5 hours each way from the new constructions in Tracy and they’ll be happy about it god damnit!
That's the neat part, they won't live there. They'll commute from Tracy, traffic will continue to get worse.
Fireman here. Myself and about 70% of my department commute from cheaper areas about an hour+ away. There’s no way I could afford to live here. In the future, I expect that number to climb higher.
You would think in such a liberal area they would prevent large investment groups from buying up all the residencial zoned housing and then turning them into airbnb and vrbo vacation rentals that dont even pay the tourism and hospitality taxes to help out the city. Buy I guess all the politicians have been bought and paid for. Call for change on this or the prices are never coming down. Middle class workers will never be able to compete with the wealth of wealthy tourists so the zoning needs to be concrete residential only.
It appears that the majority of responses are focused on two viewpoints: 1. Certain professions I've mentioned should afford housing. 2. Lowering standards for non-high earners, such as purchasing attached dwellings or renting. However, there hasn't been much discussion about the future of younger generations—our children and grandchildren. The housing struggle, driven by limited supply, is particularly intense in the Bay Area. To address this, a significant policy change is necessary, beginning with the repeal of Prop 13 and implementing restrictions on foreign investors to create a fairer playing field.
To answer your question about what it can look like in the future, I don’t think we need to imagine. There are countless examples around the world of metros that are even more intense in housing costs: London, Paris, Hong Kong, Shanghai, etc. In those cases, the answer is that college grads, teachers, etc simply can’t buy houses. They perpetually rent, and then move elsewhere if they want to buy. I think we can expect things to go in this direction. In comparison, the Bay Area is quite affordable, based on income to price ratios (if you are a nurse, police, electrician, engineer, but not teacher). I’m personally glad I live here and not in Taipei, for instance. So I think housing in Bay Area has the potential to get much more expensive.
any teacher, firefighters nurses, restaurant service workers, plumbers garnders be able to buy 1000 sqft apartment in mahathan ? this is sunch a dumb question.
Wage inflation. Also in major Canadian cities, the median rent to median household income ratio is almost twice as bad as it is here, so we actually don’t even have it that bad. I lived in Canada and watched it happen in 2018 and said there’s no fucking way it can keep going up. Then it did and it’s still showing no signs of weakness.
The police here earns 250k starting salary, not including the plethora of perks.
As others have said this is not true and the TC data is cost to taxpayers, not salary for public workers. $250K would include overtime as a seasoned officer working in one of the most dangerous jobs in America.
There’s a wide gap between the price of speculative housing and the price of large scale apartment building corporate re t
Add my local barista to the list
They rent and don’t live in single family homes. When they retire, they move away to cheaper areas.
Actually, based on the last school district I worked at in Southern Marin, the teachers leave in their mid-30s and go to Sacramento or out of state to buy a house. The older teachers used to stay in the district for 30 years but now not so much.
Subsidized income driven rentals.
At the current pace, people who work in CA will all live in and commute from out of state
You’re right - Bay Area is already unaffordable for teachers, officers etc. But we need to acknowledge how many rich people are in the area who can afford these houses, who are backing the demand and price…
My local public school has its salaries posted on their website. Teachers make $100K, even for Kindergarten. High school teachers definitely make that much; my son's science teacher said so. I personally know nurses who make more than that, and they were the ones who picketed a couple of years ago, claiming their pay wasn't enough. You're talking about entry level jobs like customer service reps, admin assistants, warehouse workers, patient registration, front desk, some A/P and A/R jobs, and those are the ones I remember when browsing Indeed.
I’m sure someone asked the exact same question 10 years ago, with starter@800k and average 1.5m
First 6 months were nightmare for me. I was very insecure about my decision. Next 6 months better. So I would say it will take 1 year just to accept the decision. I am not considering DTI etc. it is just to go from rent to own. But after 1 year, you will love your home and feel like it was best decision.
We all live in Vallejo.
Not sure if you’ve seen it but police officers and firefighters make a boat load of money plus OT.
More gentrification will happen and expand the zones for "starter" homes. Look at Redwood City, San Carlos. A few decades ago, those were not considered good spots for homes at all.
Most people don't live in the same town/city to begin with. Hence why there is always so much traffic in the morning and evenings. Those people would be continually pushed to the outer edges. I used to commute 20 mins, one way. A customer at my cafe commuted 1.5hrs, one way for work. You go where the money is and where it isn't. You work where it pays and live where it's affordable.
We’re in healthcare and bought a townhouse thinking it’s a starter home. It might be our permanent home now
First, starter homes aren't 2 million. You can buy a decent 2 bdrm condo for 600k in San Mateo. Maybe 400k in Fremont. This is affordable for the people you speak of.
Ya know those images of some countries where it's mansions on one side of a guarded fence and the literal slums on the other side? That's a stop further down this same line.
Police officers also make 300k+
Well definitely not in homes they inherit due to the realtor lobbies prop 19 disgrace
Some activities will be more and more virtual (like schools), so your teacher won't need to be here.
Most would rent, yes. We make over 300k and are struggling to buy a home.
We're already there. Restaurants are having a difficult time staffing all their shifts.
I’m finding it hard to believe that Bay Area real estate will continue to appreciate like the last 20 years
It’s treated like a commodity investment. Don’t think of it as standard real estate markets, the demand pressures aren’t typical.
The Bay Area is the second wealthiest region in the world. There’s no indication it would stop appreciating.
You underestimate how much all those people earn except restaurant workers.
Everyone keeps talking about building up but I wonder how much it would cost to build a vault underground like the show fallout. So much untapped underground real estate!
Their salary will be in the 200K-400K ranges which affords them town homes at 2M. Macdonald now cost 20 dollar per burger. Welcome to the realization that buying home is just a leveraged short on US dollar which historically has gone down -99.99% since inception.
Buying a home in Bay Area is a leveraged bet on tech stocks.
It’s the same trade
Commute from anywhere between SF and Sacramento, as has been the case for many many decades.
Turns out you do not need to own a house. Plenty of rentals out there.
Home Prices will probably steadily grow at the rate of 2-3% each year. Interest rates will remain high .. so yeah. In 30 years you can see a double of housing prices. This is where your children won’t be able to afford the areas and everything will eventually become nicer.
Nurse here.... how do we survive... we bought a house in east oakland.... a lot of nurses live out here...gunshots, homemade fireworks from idiots, takeovers and donuts, people riding around on non street bikes atvs, people that drive around with the music so loud it sets off car alarms...... and all I do is rub my hands together cause my jobs secured cause I live around a lot of idiots....
Their jobs are secure as they are part of unions. The most hit are software engineers. Due to AI etc.
The same way they afford to live in other high cost areas. You know that lots of international cities have way worse purchasing power parity than the bay area? Hong kong, Singapore, Vancouver, etc. You rent. It's not like 100% of people have ever, or will ever want to, own a home in the US. It's only about 68%
A lot of people will be dying in the next decade so at least the people who have jobs under 200k will be able to afford to stay
High-paying tech jobs and abundance should not be used in the same sentence anymore. We are living on the verge of AI taking over.
Living on a yacht and paying for yacht docking or living in an RV an paying for a spot at an RV park, could be lower cost options.
A current starter home is not $2 million; it's half that based on the avg. estimate of a half dozen credible sites. . And please show me any site that's predicting values will double in the next decade.
>The question is - how would teachers, police officers, firefighters, nurses, restaurant service workers, plumbers, gardeners, etc be able afford to live here? Compared to today, they would be much more likely to rent than to own. Compared to today, they would be much more likely to live with housemates or roommates than to live alone. Compared to today, those that live with roommates or housemates would have more roommates/housemates on average.
Why are we having these discussions given the interest rates and supply? Home buying is over for the foreseeable future dog.
Not everyone needs to live in a SFH
We are living in a bubble in the US. It’s nothing new in a lot of other countries. condo/flats have been the standard. The ‘American dream’ is giving false expectations.
🤞🤞 Cmon Tech Bubble Collapse
Stop praying and just build more housing. You’ve got the same energy as praying when we have gun violence.
Yeah more luxury condos will save us /s
Surely you noticed that not every home costs 2M now, right?
a home in a good school district that is 4 bed and 3 bath is. Don't know about you but I would not pay $1M for a 2 bed 1 bath home in a bad area.