churn in housing

[bearishgurl]

[quote=AN][quote=bearishgurl]IMO, there really is no fundamental reason why the residential RE in “close in” (=<45 miles from SF) bay area cities will "crash" for any reason.

Firstly, there are MANY industries up there besides the tech industry which are large employers.[/quote]It's not about the amount of industries and jobs but how well does the workers get paid. When you're talking about $1.6M for a crappy 1700 sq-ft tract house in an area with bad schools. I think it starts to get ridiculous. But my crystal ball is broken, so I can't say when it will crash. My gut feeling is that it will. Never say never.[/quote]

AN, I looked over the "low quality tract home" thread again today and clicked on the links. You and flu were comparing the most expensive homes in the most expensive cities in SV to prices of SD homes situated close to tech jobs. You weren’t comparing SV “worker-bee” homes at all! What about that ~1100 sf WW box in MV (or San Bruno/Millbrae) with a one-car garage? SV worker-bees live there! Or that ~1900 sf 1970’s era home in Fremont, just across the Dumbarton Bridge? SV worker bees live there also. It’s only an extra ~20-30 mins each way to cross the Dumbarton Bridge (assuming the worker lives close to the other side of the bridge). The same is true of the SM bridge and Hayward/San Leandro on the other side. The homes in these East-Bay cities are even cheaper than Fremont homes but tend to be older and smaller (but not as small as the WWII boxes in northern SM County cities). Hayward, in particular, has a LOT to offer by way of public secondary schools, their great extra-curricular programs and CC, as well as a BART stn and CSUEB practically within walking distance (not sure about Elem school quality). San Leandro and Fremont also have BART stations. And the Fremont school district is one of the best in the bay area! If you live in Fremont and work in Santa Clara southward, you can take the Nimitz Fwy around the bottom of the bay to work and back and thus avoid the bridge altogether!

You guys were only posting links to homes where a worker could walk or ride a bike to Google or Apple. You must know that it is wholly unrealistic for a worker from out of the area who accepts a job up there to be able to qualify to buy something in those areas immediately upon accepting employment in SV.

And btw, a very similar property to the ($5.6M?) 100+ year-old Palo Alto estate property (situated right in the middle of town) which you posted on that thread, joking, “As least it has ‘character,'” (or something to that effect) was “good enough” for Steve Job’s family to be raised in and for all we know, they probably still live there!

You and flu were essentially bantering back and forth about how the 1-5%-ers live in SV. That has nothing to do with the typical SV worker-bee commuting to/from work daily on company-paid shuttles.

It was just laughable to me that you live in MM (of all places) in SD yet you posted that you expect to be paid $300K upwards in SV upon accepting employment there so you can qualify to buy into an area which is far more valuable than MM! If you weren’t actually joking here, then your expectations are totally unrealistic and thru the roof, imho.

It isn’t about “how much workers are paid” at all. I don’t believe local salaries affect housing prices at all in the close-in Bay Area cities. It is all a matter of supply and demand. The reality is that the hundreds of thousands (millions?) of established residents who have resided there for decades have far deeper pockets than you and me.

This population had a lot more exposure to opportunity throughout their lives than did long-time San-Diegans. It is what it is. None of us can fix this now. It is partly due to the “sunshine tax” that we all paid to make SD County our home.

[an]

BG, you’re hilarious. Comparing a place that would take you 40-60 minutes commute to a place that’s 10-15 minutes from high paying job centers? You should be comparing those bay area places to Temecula if you what to compare apple to apple (i.e. commute time).
I would pick MM over Mt. View any day, purely because of the schools. I’m not sure if $300k is even enough for me to maintain my life style in the bay area. It might end up having to be $400-500k. I expect to have the same living standard when I compare different cities. I don’t care how old an area is. I don’t care if there are a billion jobs in the bay. It doesn’t do me any good if I have to downgrade my living standard. That is what I mean when I expect to be paid $x in order to make me move. Which is why I’m still in SD instead of moving to the bay. I’m sure if I really wanted to, I could find a job up there pretty easily. But why would I want to, when I get better weather here and a much better living standard? I would only want to sacrifice my weather if I can get a better living standard. If I have to sacrifice both weather and living standard, why would I would to another nondescript suburb? I would shoot myself after 1 month if I have to commute 30+ minutes to work. My limit for a sane commute is 20 minutes with no traffic or 10 minutes with traffic. Life is way too short to put yourself through hell. Especially when the working life span of a tech worker is pretty short.
I would also pick Carmel Valley/La Jolla/Del Mar/RSF over Cupertino too. For $3M, I rather have an enclave in RSF or a house with ocean view in La Jolla/Del Mar over a nondescript tract home in Cupertino. But that’s just me.

[bearishgurl]

[quote=AN]BG, you’re hilarious. Comparing a place that would take you 40-60 minutes commute to a place that’s 10-15 minutes from high paying job centers? You should be comparing those bay area places to Temecula if you what to compare apple to apple (i.e. commute time).
I would pick MM over Mt. View any day, purely because of the schools. I’m not sure if $300k is even enough for me to maintain my life style in the bay area. It might end up having to be $400-500k. I expect to have the same living standard when I compare different cities. I don’t care how old an area is. I don’t care if there are a billion jobs in the bay. It doesn’t do me any good if I have to downgrade my living standard. That is what I mean when I expect to be paid $x in order to make me move. Which is why I’m still in SD instead of moving to the bay. I’m sure if I really wanted to, I could find a job up there pretty easily. But why would I want to, when I get better weather here and a much better living standard? I would only want to sacrifice my weather if I can get a better living standard. If I have to sacrifice both weather and living standard, why would I would to another nondescript suburb? I would shoot myself after 1 month if I have to commute 30+ minutes to work. My limit for a sane commute is 20 minutes with no traffic or 10 minutes with traffic. Life is way too short to put yourself through hell. Especially when the working life span of a tech worker is pretty short.
I would also pick Carmel Valley/La Jolla/Del Mar/RSF over Cupertino too. For $3M, I rather have an enclave in RSF or a house with ocean view in La Jolla/Del Mar over a nondescript tract home in Cupertino. But that’s just me.[/quote]

You wouldn’t have a 40-60 min commute if you bought a WWII box in Northern SM County (San Bruno Millbrae, Belmont, Redwood City …. even East Palo Alto) for $700-$900K and moved in, enabling you to eventually position yourself for that $300K salary level you were posting about.

It ain’t going to happen in SD, AN.

I understand all the reasons you cited for wanting to remain in SD earning a (forever) lowered salary. You even forgot to mention your nearby family members to help you with your kid(s). That’s huge!

But, there you have it. Your “peers” in SV have the potential to eventually make 2-3 times your salary but they have to make certain sacrifices to do so. (Namely, remain in smaller, older living quarters and live with relatively high winds for years if they want to be relatively close to work.) You’ve made the choice to stay in your hometown which happens to be in a region with the best climate in America and are willing to pay the price to do so. The price you’re paying is giving up a big portion of your lifetime salary and upward mobility. Fair enough?

I told my kids to NEVER move back to SD for a job and to strive to get themselves established/entrenched where they are (elsewhere in CA where the job opportunities are more plentiful and much higher paying). They know where to find me on TK and X-mas 🙂 I already know and fully understand exactly what SD is and is not and paid the price myself in spades to remain here (and continue to pay the price). Those days are numbered, though.

I don’t want that for them.

[bearishgurl]

Gawd, I’m failing to comprehend why we are now comparing MM and CV (SD) to San Mateo County cities here.

There IS NO comparison. They are apples and oranges.

[Coronita]

[quote=bearishgurl]
But, there you have it. Your “peers” in SV have the potential to eventually make 2-3 times your salary but they have to make certain sacrifices to do so. [/quote]

This is the worst idea to live in the Bay area. Most average people don’t go there for the salary. The salary is only pays the bills, barely. Most people that just goes there for the salary cannot afford to own the homes there, since affordability is even less than here.

The only reason one would go there is to work for stock options with the hope that one can hit the big one or if you are going there a C-level or higher executive.

My salary up there was about 25% higher when I was there during peak bubble. That’s squat and that’s before tax. Especially these days, if you break $200k up there as an enginerd (which isn’t hard to do), you’re also subject to additional “wealth” tax at both the federal and state level, so your effective take home pay in proportion to real estate prices up there is considerably worse versus here if you are below that threshold.

It’s not possible on one salary alone for the majority of worker bees to afford living in most of the places in the bay area that is ok..The rent also will eat into most of your salary since, again, you pay rent with after tax dollars and rent is so high there.

What the bay area does illustrate is that salary is the worst way to accumulate wealth for most people (unless you are an exec). Up there, if you can’t even afford to own your own primary, good luck being able to own investment properties that generate income.

So this is where I sort of chuckle. Some of my colleagues up there that weren’t so lucky with the stock option roulette might have pretty large salaried base packages (I’d say maybe 25% more), but they have no real estate investments, limited stock they purchased themselves, the same 401k (since everyone maxes out the same), and they still rent.

Salaries pays bills. That’s it. Most people will never get ahead on salary alone.

If it wasn’t for my “luck” to go through two companies that went public and 1 that was acquired during the boom, I wouldn’t have stayed nearly as long as I did. And in hindsight, wasn’t totally screwed over by the Ericcson merger and was able to stay with Qualcomm during that time, I would have been financially much better off today.

[bearishgurl]

[quote=flu][quote=bearishgurl]
But, there you have it. Your “peers” in SV have the potential to eventually make 2-3 times your salary but they have to make certain sacrifices to do so. [/quote]

This is the worst idea to live in the Bay area. Most average people don’t gothere for the salary. The salary is only pays the bills, barely. Most people that just goes there for the salary cannot afford to own the homes there, since affordability is even less than here.

The only reason one would go there is to work for stock options with the hope that one can hit the big one or if you are going there a C-level or higher executive.

My salary up there was about 25% higher when I was there during peak bubble. That’s squat and that’s before tax. Especially these days, if you break $200k up there as an enginerd (which isn’t hard to do), you’re also subject to additional “wealth” tax at both the federal and state level, so your effective take home pay in proportion to real estate prices up there is considerably worse versus here if you are below that threshold.

It’s not possible on one salary alone for the majority of worker bees to afford living in most of the places in the bay area that is ok..The rent also will eat into most of your salary since, again, you pay rent with after tax dollars and rent is so high there.

What the bay area does illustrate is that salary is the worst way to accumulate wealth for most people (unless you are an exec). Up there, if you can’t even afford to own your own primary, good luck being able to own investment properties that generate income.

So this is where I sort of chuckle. Some of my colleagues up there that weren’t so lucky with the stock option roulette might have pretty large salaried base packages (I’d say maybe 25% more), but they have no real estate investments, limited stock they purchased themselves, the same 401k (since everyone maxes out the same), and they still rent.

Salaries pays bills. That’s it. Most people will never get ahead on salary alone.[/quote]

flu, I agree that passive investments generate more “wealth” than salary alone. But do company stock options and opportunities to get in on the ground floor of a successful startup exist in SD? What is the difference in the level of venture capital swarming around SV as opposed to SD?

Let’s say you stayed in your position in SV and never moved down to SD. You would have been there during the RE downtown of ’08-12 instead of here. You bought condo(s) in SD cheaply during the downturn (in MM?). Weren’t there any similar RE investment buying opportunities during that time in the bay area? Sure, maybe your 1/1 rental unit(s) would have been across the bridge … in a less expensive city (comparable to MM SD). It is also possible that you would have been able to get more rent per month than you get in MM.

What would the difference in your salary be now between SV and SD had you stayed with your employer up there?

And did you keep your residence there as a rental? If not, what is the difference in sales price between when you sold it and now?

There is much to think about when deciding to relocate to an area with lesser opportunities in your field. It’s possible that opportunities would have been offered to you in your field by now which are not feasible in SD or even possible, had you stayed.

[bearishgurl]

I do believe some people can make a relatively decent salary ($100-$150K) and save a good portion of it every month. It depends on lifestyle. For example, riding a free shuttle or the Caltrain to work and back is a lot cheaper than driving.

People CAN create wealth from salaries (albeit more slowly). If they are trying to support an entire family on one salary, probably not. That’s a good argument for a dual-income household … to get ahead, save money for retirement and kids’ college and avoid living check to check.

(flu just mentioned trying to support an entire family in SV on one “enginerd” salary, which I feel is unrealistic.) Of course, I agree that you are just “paying bills” without the other able-bodied adult(s) in the family bringing in income.

I don’t know if that’s what he was trying to do while living in SV.

[joec]

I agree with flu…Being an “old” tech worker in the bay area during the tech boom, I think the majority of people who are there living in the more expensive areas are hoping to join a place which will get acquired or go public…Most “worker” bees live in areas off the prime areas or in older, small places. Mountain View didn’t use to be that expensive and my guess is people living in these places are “stuck” and don’t know where else to go (for work). SD isn’t the place for most tech jobs and neither is LA. Especially when all your business and work referrals make it nearly impossible for you to leave.

I really think after you start making a bit of money to not notice the difference due to taxes being so high, you realize that income increases are pretty useless and you are better off investing a lot more in stocks in general and find companies which will make it (seems like a lot recently…)

All you need is 1 and it doesn’t even take that many options…

[flyer]

We’ve never sold any of the properties we’ve purchased in over 25 years. Doesn’t mean we never will–just haven’t so far.

[an]

[quote=bearishgurl]
You wouldn’t have a 40-60 min commute if you bought a WWII box in Northern SM County (San Bruno Millbrae, Belmont, Redwood City …. even East Palo Alto) for $700-$900K and moved in, enabling you to eventually position yourself for that $300K salary level you were posting about.[/quote]You serious don’t know what you’re talking about. In Millbrae, there’s only 1 house for sale <$1M. https://www.redfin.com/CA/Millbrae/508-Lomita-Ct-94030/home/1951087. It's listed at $999k. Same with Belmont, there's only 1 for sale <$1M: https://www.redfin.com/CA/Belmont/618-Hiller-St-94002/home/1708651, listing at $949k for a 3/1 1000 sq-ft. Redwood City school sucks and I wouldn't want to subject my kids to that crap. Same with East PA.

Where do you get that an average enginerd will be able to make $300k (assuming you don't hit the IPO lottery)? I would call BS. I know a few enginerds at my age and they're making less than I am, yet they're in the bay area. When I interview with companies up there, when I passed the technical part and we start talking about salary, that's where it breaks down. Salary are between 15-25% higher than SD, that's what recruiters tell me. They would offer more stocks but with my luck, I would end up picking a company that wouldn't hit the IPO lottery.

[quote=bearishgurl]I understand all the reasons you cited for wanting to remain in SD earning a (forever) lowered salary. You even forgot to mention your nearby family members to help you with your kid(s). That's huge! [/quote]I don't need to mention nearby family members, because even if I don't have family near by, I still would come up with the same conclusion. Lower gross income, yes, I agree. Lower net income after COL? I doubt it. Not only would you have to pay higher taxes, higher COL, but you would also lose out many tax breaks because your gross income is higher than certain threshold.

[quote=bearishgurl]But, there you have it. Your "peers" in SV have the potential to eventually make 2-3 times your salary but they have to make certain sacrifices to do so. (Namely, remain in smaller, older living quarters and live with relatively high winds for years if they want to be relatively close to work.) You've made the choice to stay in your hometown which happens to be in a region with the best climate in America and are willing to pay the price to do so. The price you're paying is giving up a big portion of your lifetime salary and upward mobility. Fair enough?[/quote]Again, I call BS on the 2-3 times my salary without hitting the IPO lottery. I don't think I'm giving up a big portion of my lifetime salary and upward mobility by living here vs moving to the bay. As I said, if the salary is 2-3 times it is here, I would have moved. But it's not. I'm perfectly happy with my upward mobility so far. I know I'm not being held back wrt upward mobility by being here. Like I said early, I'm getting paid more than my peers in the bay with a higher title and responsibility.

[spdrun]

San Diego vs Sillycon Valley: in San Diego, you see people actually GOING HOME at 5-6 pm. Not as much silliness like people taking company-store buses home at 10 pm. Not so much tech-hipster-startup-dudebro culture either. Normal people. Good unpretentious restaurants. Very little stuff catering to pretentious hipster twits.

Quantity of money may be lower, but standards for “work ethic” are fairly normal, not encouraging of martyrdom.

[Coronita]

[quote=spdrun]San Diego vs Sillycon Valley: in San Diego, you see people actually GOING HOME at 5-6 pm. Not as much silliness like people taking company-store buses home at 10 pm. Not so much tech-hipster-startup-dudebro culture either. Normal people. Good unpretentious restaurants. Very little stuff catering to pretentious hipster twits.

Quantity of money may be lower, but standards for “work ethic” are fairly normal, not encouraging of martyrdom.[/quote]

That’s not true. Ask Qualcomm engineer that works in QCT or any Broadcom engineer that is in Rancho Bernardo or Intel engineer that works in Rancho Bernardo or many of the tech startups here or many of the defense contractors here (the ones that are left). Or the Samsung engineers here. Or the Sony engineers that are still here..Or the Intuit engineers, especially during mini-peak and peak tax filing….They burn the same hours as silicon valley slave driving companies. It really depends on the culture of the place that you work. In the Bay Area, my hours weren’t that bad. I am an early person, but I didn’t find many people in the office before 10-10:30am and most of them were out of the office by 7pm, mostly to avoid commute traffic, since many of them lived further away.

And wrto the bay area, only a small percentage of people actually do financially well, most are average at best. So, wrto to being pretentious, I’d say it’s much more here than up there, because up there for an average person, the cost of living is so much higher, that they can’t afford to be pretentious…. Here, on the other hand, at least where I live, I see more BMW’s/Mercedes/Audi’s than I do Honda Accords and Toyota Camrys, and appearances do appear to matter more down here than up there, at least along the coast parts of town. Just look at how many plastic surgery places there are acattered all across SD (not nearly as bad as in L.A.)

The biggest drawback for SD is the ability to job hop. If you’re a worker bee, you can burn a lot more bridges up there without worrying about it. Down here, you really don’t want to burn any bridges, because the community is really tiny. And that goes both ways. Your best tech workers down here also know about some of the worst managers in the community.

If you want crunchy people, stay out of CA.

[fun4vnay2]

engineers in qcom put in long hours
qcom is a slave-house. heard some big shake up coming in qcom..
very difficult to find good jobs in sd as the job opportunities are limited

Bay area salary is hardly 20-30% more than what you get in SD.
Not enough to pay for cost of living difference
In bay area, only way to live is : stock options or ipo kind of deal..
I have many young friends planing to move out of bay area n go t places like austin, rtp , seattle.. much better place

[ltsddd]

qcom is at a crossroad. It no longer has the kind of monopoly it used to enjoy. It will need make some drastic changes soon to avoid ended up like some great (potential) companies of the past – encad, proxima, etc. A shake up and perhaps even a break up is not a bad idea. For sure the culture there is awful and very tribal. All things being equal, you’re more likely to get hired and promoted if you’re chinese or indian. Sadly, broadcom has becoming like that also in recent years.

[Coronita]

[quote=AN]

Where do you get that an average enginerd will be able to make $300k (assuming you don’t hit the IPO lottery)? I would call BS. I know a few enginerds at my age and they’re making less than I am, yet they’re in the bay area. When I interview with companies up there, when I passed the technical part and we start talking about salary, that’s where it breaks down. Salary are between 15-25% higher than SD, that’s what recruiters tell me. They would offer more stocks but with my luck, I would end up picking a company that wouldn’t hit the IPO lottery. [/quote]

Lol, you’re lucky to even get the recruiters to bite by them offering you a 15-25% bump. In recent times, I’ve never been successful getting them to even offer that. I must have done a decent job negotiating my package here in SD because whenever I get a recruiter to call from the bay area asking me to relocate, I mention the cost issue with the bay area, and they immediately tell me about the 15-25% bump. But then when we actually start talking about numbers, they end up saying 15-25% is too much and then try to tell me about “pre-ipo” shares when some of the companies are only in the 2nd stage of funding…. And of course, good luck trying to get an early stage startupto offer with pre-ipo shares with a non-dilution clause..Most enginerds aren’t important enough for them to do that. I had one recruiter that asked me if I was sure my comp was in SD markets….lol… I guess this also means that when/if I do get axed, I’m going to need to take a significant paycut down here…Because when you turn 40ish, it’s never a question if, it’s a question of when…lol….

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