Tag Archives: bay area

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.

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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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It Takes $450,000 to Be Middle Class in the Bay Area

The other day I was having a debate with one of my blog readers about the definition of Middle Class. We were both trying to sort out what the income requirement was to be “middle class” in the Bay Area or any region of the country. I came up with a pretty simple equation…

Middle Class, to me, equals being able to afford a modest house for a family (3br, 2ba) in a reasonably good neighborhood within one hour of where you work (i.e. a suburb of a major city.) Based on various estimates you should spend about 25% of your AFTER TAX income on your monthly home payment. Thus, in order to determine what it takes to be middle class in any region, we can look at what homes cost in that region, and base our definition on that. Continue reading

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Can We Afford Life on a dual-income, one Teacher’s Salary?

My husband is adamant that until I get my ADHD mess in order, we should not discuss the future. He has a point. I am good at planning for years down the line, but in terms of “today,” my life is a mess. I still cannot get myself to work on time and despite some progress in the cleaning up department – my laundry never manages to make it from the drier to my closet. It’s completely fair for him to state that until I can stick to a basic routine, we should not discuss the future.

I know if I can just keep the house clean (well get it clean and then keep it clean) and leave the house in the morning to get to work on time, he will, eventually, be willing to plan life with me. I am trying to get rid of things and simplify as much as possible so that there is just less stuff to create messes. It definitely helps. Continue reading

Moving On… Out?

Sure, there have been moments where I wanted to pull my hair out living with my current roommates, and I’ve been guilty of causing these moments in return, but the past 2.5 years living in this apartment have been some of the most stable in my life. This has been the apartment of my mid 20s, and now it’s time to figure out the housing situation of my late 20s.

My current apartment — a room in a 3br, 2ba in a nice condo complex in the Bay Area burbs (next to houses that cost $1.5M+) cost me $632.50 a month. The room is small, but big enough for a full size bed, and has a wide widow overlooking greenery, blocking the parking area from view. It has large sliding mirror doors on the closet, which makes it seem more spacious, and much better than the room I first lived in when I moved to the Bay Area (in Burlingame) that cost $450 a month but really felt like a closet.

The rest of the apartment is nice. It has a balcony that I rarely use, a large living room / dining room space, full kitchen, the full bathroom that I share with one other girl, and another full master bedroom with its own private bathroom. The cost breakdown between myself and my roommates has never seemed totally fair… the private bedroom with walk in closet and private bath is $770 a month, where the much smaller bedrooms are $632 each. But I’d prefer to have access to a bath (not shower only) and like the window in my room, so never bothered to complain. The complex is nice, has its own small park-like area, and a pool that I’ve used probably 6 times total since I moved in (but enjoyed greatly on the rare really really hot days of summer.) And the location is pretty good too. It’s about 25 minutes to work, 30-45 minutes to the city sans traffic by car, 10 minutes to my boyfriends house, 5-10 minutes to the supermarket. I’m right by a freeway exit (off the better freeway in the Peninsula.) Oh, and there’s a washer and dryer in the unit!!!

So why move? Well, maybe I won’t. But whether or not I move, there are some major changes coming, because both of my roommates are moving out. One is moving out for her school program, she’s relocating to Southern California. The other is moving in with her girlfriend and closer to work. That leaves me with one 3br, 2ba apartment and no roommates.

While my landlord may choose to increase the price of the apartment when my roommates move out, they may not if I can find immediate replacements. And there are only a few reasons why I’d want to leave…

1) Finding two new roommates is going to be very difficult, and I’ve had so many bad roommate experiences before, that maybe I want to live alone right now

2) The location is ok, but it’s really inconvenient for biking anywhere as it’s up a giant hill. I’d like to live somewhere that makes it possible to bike to work, and use my car less.

3) Maybe now is the opportunity to move to the city. I’ve always wanted to live in San Francisco, and it makes a lot more sense to do it in my 20s/ early 30s, versus when I am ready to have kids and settle down. That said, it would be kind of dumb to move to the city right now, as it would increase my commute time. There are rooms in the city for the same price I’m paying now, or even less, but the apartments wouldn’t be as nice as the one I live in, and they’d also probably not be in the areas I’d want to live in the city (if I’m going to keep my cost the same)

4) Should I find a place that’s cheaper? 632.50 is not bad for a room where I live, but I could feasibly find a place that’s $500. It may not have its own laundry in the apartment, it may require a longer commute, but I could save more money (or have more money to spend on things I need like a car, mental healthcare, etc.)

So… I’m not sure what to do. I’m scouring Craigslist on a daily basis but it’s too early to look. My roommates and I have decided that our move-out date will likely be July 1, which means I can’t really start looking until Mid-to-late May. So that’s three months of driving myself nuts over this.

It could be a great opportunity to be in control of finding my new roommates for this place… but, to be honest, I’m just tired of having roommates. I want something more private, a place I can be a recluse in when I don’t need to be around people. Where I can watch American Idol in peace. But that dream is expensive. When I lived alone previously my rent skyrocketed from $905 a month to $1300 a month in just two years. I feel much wiser paying $600 a month vs $1300! Then again, if I was paying $1300 a month or more it would be an easier decision to BUY a place vs renting. Right now I think I’m doing pretty good renting. I’m able to put a good chunk of change into my investment accounts.

Is it better to own a studio apartment and put all my savings each month into that, or just put all that money into my investment accounts? Plus… with my mental instability (the joys of bipolar II) I think I need the freedom of not being locked into anything (like a mortgage OR expensive rent payments.) I guess I will just have to wait until May/June to figure this out. I’m so tempted to move to the city, but that’s probably an awful idea. What do you think?

Ridiculous to Stay, A Pain in the Ass to Go

Ah, it’s a beautiful Saturday morning in my lovely studio apartment. The spring air is keeping the room cool – in a few weeks it will be piping hot outside, with the heat somehow collecting in between the walls of my studio.

In the background of my waking state is TLC’s “My First Home.” A couple is looking for a home in the Bay Area, and they’ve found one they loved.

Meanwhile, I search Craigslist ads vigorously. It’s not that I’ll find a place to move today, as my move-in date is July 1 at earliest, but I’m still trying to decide whether to leave my complex for a more affordable option or stay here and deal with a tight budget and less savings.

When I moved in and the studio cost $905 including utilities, it wasn’t that much of a jump from the $700 + utilities room share options available on the market. For $100 extra dollars, approx, I could have a place of my own. That was a no brainer.

Then rents went up to $1050 and I decided to stay. It was a shock, surely, but it still seemed like a pretty good deal given my options.

$1300 – is about double what I could be paying for a room share situation. I could even compromise and get a room and bathroom in a 2br/2ba condo apartment for less than the $1300.

Moving is such a pain in the ass, though. I could hypothetically “move” for little cost, if I can get some friends to help. As far as furniture goes, I don’t have much. The only large thing I’m sold on keeping is my bed, since I bought that new for a whopping $800 two years ago (I decided after 6 months on a used futon with poor support, I deserved a good night sleep). I have a large bookshelf I got at Target a few months ago and it’s really heavy – but it would be a shame to toss that! Other than the bed, bookshelf, and some small tables, I have a piece of crap IKEA coffee table that started to fall apart before I put it together (though it’s functional) and a large horizontal dresser that I could part with – I’m not sure anyone would want to buy it, but I’d consider trying to sell it on Craiglist. I have plenty of room in my closet now for my clothes, and I’d hope that wherever I move would have at least this much closet space. Then there’s a TV, a printer, a microwave, and other odds and ends. I really don’t have that much stuff. It’s still a bitch to move, but it’s not like I’m moving a house worth of life. It’s just whatever I could fit in a studio for the past two years.

Also, having less space might be good for me. It would keep me organized as there wouldn’t be places to hide things. Heh.

The downside of getting a roommate is – well – obviously enough to have me living in a studio currently. Noise. Roommate drama. Not being able to cook naked in the kitchen. These things are hard to compromise on. 🙂

My biggest fear is that I won’t find anything I like. I have some cushion. If I decide to move – I’d come back to California around June 20-something, and I’d have that time to finish getting out of my apartment. I’d put my things into storage and move in with my good friend who has offered up her second bedroom. I’ll pay her rent, but it will be way less than what it would cost to stay in my studio in August. $1300 versus, maybe $500 or something (plus whatever it costs to put my things in storage for a month.) That will cover the 2 weeks in June that I can’t work because I’m going to be in Israel on vacation. Then I can really take some time to find a good living situation.

The real question is, how picky am I? I get anxious in so many living situations. Finally, in this light and airy studio I feel, well, at the very least calm and comfortable. The greenery outside (beyond the parking area) makes me happy. It almost reminds me of home, back east. I love waking up here.

But is it the stupidest thing in the world not to move? If I did move, I’d look for a place ideally that costs less than what I’m paying now, so I could pay under $1000, and I’d put any extra money between that and the $1300 I would be paying for my studio into a special down payment fund. I’m tired of renting, and dealing with yearly rent increases.

I just wish I felt more settled. All of my friends are getting engaged and married. Buying homes. Me? Well, I’ve been in a relationship for two years. We joke about moving in together one day but we’re talking more apartment than house. He’s going to grad school in fall 2009, and who knows where I’ll be. That’s why it really doesn’t make sense for me to buy anything right now. Even though the prices for condos in the area are coming down while rents are going up, up, up.

The more I think about it, the more I realize the only logical option is to move. I could be saving $500 a month if I find a place for $800, or $6000 a year. $6000 a year is nothing to shake a stick at. That’s a huge chunk of change to go to my downpayment fund. Even if it’s $4000 and I get a slightly nicer place, it’s still a lot of money.

*sigh* – I just… wish there was an obvious option hitting me on the head. But life is never so black and white.

Why Living Alone is Worth 50 Percent of My Paycheck: Part One

According to the recommended budget split, I hear you’re supposed to spend 20 to 30 percent of your income on housing. After my rent increase next month, I’ll have hit 50 percent. As I’ve pointed out before, my rent is now $1050 a month for a studio apartment. Before you gasp in horror, take note that the hefty fee also includes PG&E, water, and garbage, and access to a swimming pool.

Still, living in The Bay Area is painfully expensive. Out of curiosity, I went on Craigslist to see what $1050 would get me in various locations of the country…


SAN FRANCISCO

$1025 Quiet Studio with Beautiful Floors and Remodeled Bathroom (downtown / civic / van ness)
This gorgeous apartment has hardwood floors throughout, fresh paint, a lovely remodeled bathroom, and a walk-in closet. Located at the back of the building, this apartment is perfect for someone who enjoys peace and quiet.

$1050 Bright, Spacious Studio *Completely Remodeled* OPEN HOUSE. (downtown / civic / van ness)
High ceilings and large windows make this a bright, beautiful, spacious studio. Completely remodeled with fresh paint throughout and has refinished hardwood floors. There is a walk-in closet, too. A separate large eat-in kitchen has plenty of room for a table. The building is centrally located, with great public transportation options, just a block from the Van Ness corridor. There is an elevator and a large laundry room in the basement with coin operated washers/dryers. Sorry, we do not allow pets. There is a resident manager on site and the building is professionally managed. The required deposit is $1150.00

NEW YORK

$1050 HUGE 2 ROOM STUDIO BY A/D EXPRESS BIG KIT-FRENCH DOORS + PARK VIEWS!! (Harlem / Morningside)

RENOVATED PRE-WAR 2 ROOM STUDIO – BIGGER THAN MANY HARLEM 1 BEDS
GLASS FRENCH DOORS! EAT-IN-KITCHEN!
THIS GREAT APARTMENT IS A FEW SHORT BLOCKS TO THE EXPRESS SUBWAY A/C/D AND CONVENIENT TO ALL
THIS APARTMENT FEATURES –
GLEAMING OAK HARDWOOD FLOORS
CERAMIC TILED EAT IN KITCHEN – BIG ENOUGH FOR A TABLE AND CHAIRS OR OFFICE SET UP
MODERN RENOVATED WINDOWED EAT-IN-KITCHEN WITH COUNTERSPACE!!!
A HUGE DOUBLE CLOSET AND STORAGE ABOVE
A WINDOWED BATHROOM WITH A ENAMELED PORCELIAN TUB
AND LIGHT!! IT’S SUNNY AND BRIGHT WITH PARK VIEWS!!

CHICAGO

$1000 / 1br – Gr8 Price & Location?Rehabbed?FREE Heat, Gas, Water?No Dep Super location! Super price with lots of savings with free heat, gas & water!!! Plus everything has been rehabbed.. Check out the stats: • It’s a new rehab. • It’s a great price!! Heat, water AND gas is included in rent, and there is NO security deposit!! • It’s a bright unit located in a courtyard building w/ fruits trees!! • It’s in a great location… Lakeview… walking distance to Wrigleyville, Lake front, gyms, restaurants and Lake!!! • VERY EZ access to CTA (bus and el)!! • It’s a REHABBED 1 bedroom about 500-600 sq ft. That means everything has been recently rehabbed!! New kitchen, new appliances including dishwasher, new hardwood floors throughout, new electric service, new dry-wall, new bathroom, new vanity. • Also, there is laundry & bike storage in building. • Cats and small dogs (30 lbs or less) allowed • Cable and internet ready. • 24/7 maintenance.

$1045 / 1br – GET A JUMP START……………for August. Make sure you have a look at our building as part of your search. You will find a gorgeous vintage high rise across the street from the park, several blocks to the lake & Zoo, by boutiques, restaurants, bus stops, grocery. 24 Hour doorman, hardwood floors, fitness room, laundry facility, heat included, no security deposit. Call 773.477.7000 for an appointment. 401 W. Fullerton.

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What can you get for $1000-$1050 a month’s rent in your neck of the woods? I’m planning on following up with a post tomorrow to explain why I spend 50 percent of my rent on living alone, and why I’m damned happy I do it.