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Just Another Post of Sadness RE: Being Priced Out of Bay Area Housing

I really try to take life one day at a time, because thinking too far into the future puts me in a constant state of unproductive panic. Right now, I need to focus on the next four years of our lives:

  • 2018: baby #1 born (0 – 6 mo), I turn 35, 1 yr at job
  • 2019: baby #1 turns 1, I turn 36(!), 2 yr at job
  • 2020: baby #1 turns 2, preg w/ baby #2(!?!), I turn 37, 3 yr at job
  • 2021:  baby #1 turns 3, baby #2 turns 1, I turn 38, 4 yr at job

Then we… GTFO of the Bay Area. >Insert frown face and sad heart.<

I know we live in one of the most expensive places to live in the entire world. When I moved here 12 years ago, I knew that too. However, I didn’t really understand how the expensiveness of “San Francisco” wasn’t referring to just the city. It actually meant that one cannot afford to live anywhere within a 80 mile radius of the city.

While I didn’t grow up here, my husband did — but unlike many others who grew up here, unfortunately his parents never purchased real estate so there is no property in the family (other than the home his grandmother owns, which is a complete tear down once it needs to be sold.) His mother also has to figure out what to do — she, for better or worse, has been living (I think) rent free her entire life in her mother’s house. So she can buy something somewhere, but she won’t be able to buy out her siblings to purchase the entire property. We have no roots here as a family, financially anyway. Unless we somehow win the lottery, the reality is we are going to have to leave.

I’m seriously considering staying in the 1 bedroom until that point. Our rent control is helpful. We still have increases at inflation (it’s not like the SF 1% rent control or whatever that is), but it helps knowing our rent won’t go up $1000 a month in a year. Really, if we could get air conditioning to work in the living room / kitchen area, and I could get my husband to be open to the idea, I think we could make this work. At first, kid shares bedroom with us. Then, we move our bedroom into the living room and kid has the bedroom. When we have #2, perhaps we switch. Or something like that. But we have enough space here. I just can’t leave my kids in a hot room with no air conditioning, and while I could survive a few unhappy years without cooling my husband would not sleep and would be miserable.

My husband has tossed around the idea of moving to Seattle. I’m not a fan of this idea, namely because I don’t like cloudy skies and I don’t like constant rain. It’s also really not that much less expensive than it is here, as salaries would be lower and we’d have to deal with long commutes anyway. I’m not sure there’s any perfect city out there (we’re not moving to Austin, husband likes it grey and rainy, go figure.) Denver is a maybe but it doesn’t feel right for us – and we have absolutely no family or friends there. Really moving back east (for me) would make the most sense… perhaps to CT or NY, though prices are high there too… just within reach, with more options, better public schools, higher taxes, but lower cost real estate.

Then the crazy part of me starts to think – what if we could live in this one bedroom apartment forever. With one kid, and if we could figure out how to cool the other room, we could make it work. It wouldn’t be the life I had hoped for – but we wouldn’t be any worse off than other families who have no choice but to live in a one bedroom with multiple kids and other relatives. Is it really that bad? I value my privacy… but I can go for a walk and spend time in the park. So can my kids. It will force us to spend more time outdoors vs in our home, which is better anyway. We’d have more money to take trips. We could even rent an AirBnB for birthday parties. Maybe, at some point, we’d move into a two bedroom apartment. Or, whenever we reach that threshold of insanity, we’d move out and far away.

I’m angry at myself for not buying property in 2011, at the bottom of the last bubble. But how could I have known? And, the reality is I couldn’t afford much then either. Six years ago, my entire net worth was $145,000. After taxes and penalties, say that was $100k, with my 401k and everything. So, I’d have 20% down on a $500k home. Which. Still. Didn’t. Exist. Then.

Case-Shiller_Simpl-Percentages

Even if there is another drop in housing prices here, that means that job security is also out the window – not the best time to buy. Unless you make $500k a year, I just don’t see buying a home here making any sense. The reality is a basic home will cost you $1.5M – that’s about $7600 a month in mortgage, insurance and taxes, not including any maintenance. We take home $9000 a month after tax… and that’s IF we both have our jobs with no periods of unemployment in the next 30 years. It’s not even like we can cut back on things like travel or going out and afford a house. It’s just… impossible.

I mean, maybe if I figure out how to become a VP and increase my base income to $250k a year with a bonus that gets me up to $500k… but even then that’s super risky on one high income. At that point, maybe I’d feel more comfortable staying in the area and renting a nicer property for $5k a month… but owning here is simply out of reach.

I’m not complaining – I’m just sad. Sad because after all of this investing and moving up the corporate ladder, it’s still impossible. It feels unfair – even though I know it’s not. It’s just how the game works. I had a few chances of striking it rich in startups. They did not pan out. They usually don’t. My RSUs now could support a percentage of a small downpayment in four years… but by then that $1.5M house will probably be $2M. I’m not sure it will ever come down again.

So, we say goodbye to the Bay Area, when the time comes. We pack up and move to who knows where. I work remote or get a new job or change careers. We find ourselves a house with a backyard for our kids to run through the sprinkler in during a hot summer day. We try to make new friends and rebuild our lives. I’m terrified of it, but that’s life. Had I known 15 years ago what I know now, perhaps I would have done it differently. But, then I would have never met my husband, never have this future child to be inside me, never have felt this, well, happy. Yes, this is about as happy as I get. 🙂

 

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6 comments

  1. David says:

    Interestingly I’ve found that Seattle and Vancouver, Canada have very similar weather, but the attitude to the weather is very different. A negative attitude to the weather can be a real downer, more so than the weather itself. The difference is that many people in Vancouver are transplants from elsewhere in Canada, so for them rainy and mild winters are a very welcome respite from snow and bitter cold elsewhere in Canada. But in Seattle many are transplants from warmer and/or drier parts of the USA, so people in Seattle have a much harder time adjusting to the weather.

    So you end up with these two cities, not that far apart geographically and with very similar weather, but very different attitudes to the weather.

  2. Duckling says:

    Also, I’m curious what is the situation like for peers in your demographic at work? Are they saying the same thing or different predicament?

  3. Duckling says:

    AIRBNB FOR BIRTHDAY PARTIES?!
    I don’t think any host would agree unless you pay a premium. I read an article about how most bay area millenials want that white picket fence dream once they start having a family so moving to Seattle/Portland/Austin/Denver in droves. Apparently living in a “start up house” or 10 roommates does come to an end once bachelor party ends.

    I kind of see the only peeps able to PARTICIPATE in the bidding wars are the following scenarios
    1. bought in before dot com or right after 2008
    2. inherited family house
    3. 2 tech worker couple (the really specialized software engineers working at the giants)
    4. won the initial employees IPO lottery
    5. founder sold co

    Don’t be sad. Seattle is way cooler than 10 yrs ago with Amzn making it unaffordable like the Bay, but not AS bad. So you’d have to make the decision sooner rather than later to get into Seattle as the Chinese are headed there RIGHT now as I’m typing after saturating Vancouver, Canada. AND you are not the only bay area resident with these thoughts.

    Portland is not as diverse and not exactly that close to the coast (2 hour drive), so you can’t really retreat to see the ocean after work on a weekday when you want to hear the waves on a whim. Seattle is 3 hour drive from a very cool, diverse city called Vancouver in Canada.

    Recommend you go on a road trip and see these places for yourself if you have PTO.

    I’m from Vancouver, Canada and housing affordability is worse than bay area. But I’m lucky my parents bought in when I was a kid. My retirement plan is to spend 4 month/year in California while keeping my health insurance and residency. It does end up being the much more financial sound decision than paying over $500K for an investment greencard.

    Plus I’ll be able to cash in on my employer pension plan after 20 years of service when I’m a 60 year old granny.

    Did I mention there are 18 months PAID maternity leave for EVERY employed person in Canada?

    I guess besides the rain, and cold, I really can’t complain much. Not even the universal health care.
    I guess there’s a reason the Canadian immigration website went down when the 45th POTUS came into power. LOL

    1. Joy ( User Karma: 0 ) says:

      🙂 I’ve actually been to all three of these cities… Canada won’t work because with my DUI on my record I’m not even allowed to visit (not sure why they let me in last year, but I did get to see the beautiful city of Vancouver.) I don’t like Portland given the lack of diversity, the fact that it’s actually even less sunny than Seattle, and it’s too far from the coast (plus not many direct flights there from other cities.) Seattle is a potential – I have a cousin there, my husband have two friends in the city, there are direct flights from the east coast, and the tech scene is vibrant enough that I could probably find work. My husband would be happy to move to Seattle. I’m not sold on it. I’m still an east coast girl at heart, and the SF area has enough east coast vibe to it where I feel home. The Northwest is very Northwest and feels a bit too mellow for me. I really love it here and have not found any other place that I love this much… I don’t need to own a home anyway, but I’d like to be able to rent one.

  4. Lisa says:

    What about a city like Portland? It’s still west coast and like Seattle, but not as expensive yet (I think). It would be closer to your husband’s parents too.

    I live in Seattle and it has gotten more expensive, especially if you want to live right in the city. If you’re willing to live in some of the close suburbs/cities (within 20 miles or so), then it becomes more affordable, especially when compared to San Francisco.

    Also, while it’s definitely gray in the winter here, there have been more sunny days than I expected, moving here 10 years ago from TX. It’s actually sunny today. And the summers are beautiful.

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