Literally everyone I know in the bay area who doesn't already own a house is considering leaving.
As extreme as the shortage of housing is the shortage of childcare. 150 person waitlists for 50 kid day-cares are common.
As extreme as the shortage of housing is the shortage of childcare. 150 person waitlists for 50 kid day-cares are common.
Yeah, I know people who have literally planned their pregnancies around expected childcare availability. As in, they make sure they can have a spot lined up quickly before they even start trying to get pregnant.
We used to be one of the cheapest cities in the country, and while we're still cheap compared to California, the gap has noticeably narrowed.
(edit: I've also heard of Californians moving here who make an offer for well above the asking price, just to make sure they get it, which contributes to the skyrocketing prices)
Maybe that's all Californians know. It's normal out here. I put in an offer on a home that received 45 other written offers, 1/4 of them all-cash and above asking price. If you're financing, you need to go much higher than 25% above asking. It's insanity. Then we go move to different parts of the country and forget that you don't need that aggressive approach everywhere.
My family moved from CA to the Seattle area in the '90s and people complained about the same damn things.
The other day I was talking to my Dad about this, after I sent him an article saying that the average price of a house in Seattle (or maybe King County) hit about $600,000, but in SF / SV it was $1.2 million. He observed that Seattle-area prices were also half of Bay Area prices twenty years ago, and that it's pretty funny that the ratio has remained about the same.
Combine the inflow of new residents with the existing stressed road system and city & county council inaction on mass transit, and traffic is ugly. It can take me 35-40 minutes to go 8.5 miles some days.
Here's a problem...
Two of them have tenants, one is sitting empty.
So as the technology folks from other cities move into these newly labeled "tech hubs" they'll drive the rent up because the costs seem so much lower than they actually are. It's a hard concept for some reason to grasp that they can pay $1500/month for a 1 bedroom in other tech cities that's $2800/month in SV/SF. However, what they don't realize is that it used to be $1100/month but landlords take advantage of the fact that $400/more/month is not an issue for someone coming from SF/SV
- Several are just plain rich, one of them was the son of a very wealthy man and then worked for a startup that actually took off
- One went into the armed forces for six years and saved up enough money to buy a house in our hometown (because where he wanted to live was too expensive)
- Couples who have high earning jobs but are drowning in student loan debt (a dentist and a doctor, in my case)
The rest of my friends are renting. I know maybe...seven people under the age of 35 who are paying mortgages.
I'm sure most millennials would buy a house or own a car if they could. But the reality is that straight up many cannot. It's not necessarily a matter of "drive".
Speaking as a so-called "millennial", when it comes to home ownership, this is completely wrong and downright insulting.
I would love to own a place instead of paying rent. Except, guess what? The smallest down payment possible for a flat anywhere close to where I live is roughly equal to my annual gross salary. And that'd be for the smallest, hole-in-the-wall flat that would likely be a money pit of necessary repairs.
Yes, I could move to a less-expensive state, but that'd require a massive upheaval in my life, not to mention the fact that a different job in that area would pay a much lower salary after COLA.
Oh, and also, if you're working in tech? You're in for a surprise when you try to get a mortgage. If you're in your 20s and working a six-figure salary, in a competitive real estate market like SF and NYC, you'll be expected to pay an even larger downpayment due to the "volatility" of your employment and annual earnings. (ie, you're employed at-will with a short employment history in an industry known for rapid change, so they want more of their money up front).
It's not that millennials don't want to own these things, it's that they see them as out of reach. It's an uncomfortable economic reality that gets abstracted into "kids these days just want different things" like they're hoarding stockpiles of money and refusing to spend it unless the thing-makers read their minds.
Air con dies? Open a service request, get it fixed for free. Microwave stops working? Open a service request, get it fixed for free. Water pressure in the shower drops to nothing? Open a service request, get it fixed for free.
Also, I don't have to do any groundskeeping. I don't have to mow a lawn or trim plants. If there's a hailstorm, I don't have to lift a finger or pay one red cent to replace the roof.
Oh, and since our summers can be terrible, I get access to a swimming pool at no extra charge (technically, it's not free, but my rent is certainly cheaper than the cost of a down payment on a house + monthly mortgage payments + cost of installing a swimming pool), and they even maintain the pool for me..
"The drop in homeownership is largely due to a delay in homebuying by the millennials, who have the lowest ownership rate of their age group in history. Millennials are not only burdened by student loan debt, but they have also delayed life choices like marriage and parenthood, which are the primary drivers of homeownership. "
http://www.cnbc.com/2016/07/28/millennials-cause-homeownersh...
Can Millennials Afford The American Dream?
http://www.forbes.com/sites/kerrizane/2016/01/24/will-millen...
I'm a highschool dropout who has no familial support. If I can do it so can someone with a college degree and better access to opportunities as long as they are willing to make the same sacrifices.
I really like not hearing my neighbors parties or seeing random weirdos hanging out in the hallways.
To each their own. Nothing in the city really excites me. Quite frankly I find the noise and bustle annoying.
Isn't it more the lack of spare cash for those, especially the large deposits required for housing?
so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation
I think you underestimate the extent to which people have looked at the mortgage costs and would love to own a house if they could afford to.
Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge.
There's a demographic difference, for example I'm constantly being asked by members of the prior generation why I don't own two cars and how we possibly cope. Actually I have no interested in owning any cars at all but one is necessary.
The same goes for housing - why don't you buy? Because I don't need to...
Now, we millennials do care a lot about housing but only to the extent that the previous generation has made it unaffordable.
Affording monthly mortgage payments is easy. Actually having enough cash in the bank to make a down payment, and having a high enough income for a long enough period of time to convince a bank to underwrite your mortgage is the hard part.
> No, it's not a spare cash problem. The modern world is full of credit.
For people in their 30s and 40s who already have a credit history, yes. For people who turned 18 after 2008, it's dramatically harder.
After 2008, banks were terrified of providing lines of credit (such as credit cards) to people who didn't have a credit history. Since the fastest way to building a strong credit history is to have prior credit, this quickly becomes a self-perpetuating problem. I had many friends who found it literally impossible to get a credit card as recently as 2010 or 2011, despite having high incomes, because they couldn't prove their creditworthiness.
Banks have since recovered somewhat from this fear, so it's no longer quite as difficult to get credit cards, but the same fear exists to getting a mortgage. And even before 2008, banks were always particularly hesitant to extend mortgages to young people due to the extra perceived risk.
I'm sure a generation of young people who watched their parents go into crippling debt has made people wary of credit.
> Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge.
Funny, I can handle the mortgage, but not the down payment (even with $100K+ in the bank).
Bullshit. We own less stuff than our predecessors because
1) College costs quite a bit more minimum wage labor-hours than it used to.
2) Entry level work pays quite a bit less (in real terms) than it used to.
3) When we do find good jobs, they're in the urban parts of expensive metros where parking is a luxury good and starter homes cost 3-6x the homes we were raised in.
Attributing the artifacts of having less purchasing power to a character flaw instead of, you know, less purchasing power is not helpful.
Just because a property value increased steadily in the past 15-30 years doesn't mean it will continue to increase in the 15-30 years.
There are lots of cities where prices stopped moving and some where prices went going down compared to the past 5-10 years. Buying a place is far from risk free.
Miami, LA, NYC, Dallas/Fort Worth, and Chicago to a lesser extent, all have thriving economies without being tech-centric. This fallacy that SF has some special magic nowhere else has economically speaking needs to die already. Please don't bring your Bay Area problems elsewhere (becoming a wage slave to afford a million dollar single family home, overflowing poverty in one of the richest parts of the world, displacing non-tech residents through housing costs).
Yes, not everyone a sexy startup, but stable growing business or just huge, established.
Fully agree on the BART extension, Livermore at least.
[0] https://www.redfin.com/city/17151/CA/San-Francisco/filter/mi...
I believe that Software Engineer can find 1m$ in 30 years.
Oh, and with the other 80% as a loan, there's a requirement that the payments aren't over 40% of your income, so a $1.2M loan at 3.92% for 30 years means you need to make more than $170k/year. You're right that lots of good software devs make that, but this is a crazy amount above the area median. And that's the lowest end $1.5M from the $1.5-3M range for a 3br in those areas. Hyperbole is not quite the way to spin it.