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Comment by jshen | Hacker News Reader

I don’t think this is good advice financially, though there is more to life than money. First, if by “tech salary” you mean a software engineers salary or a product managers, then you should be able to afford a house in a place like Seattle. It might be tight if you are early in your career, but it is very doable.

The main reason this is likely to be bad financially is that your house won’t appreciate like a house in Seattle. I’ve been doing tech for a long time at this point, and have seen people make both choices and how it plays out over the long run. Those that stayed in the big city are basically financially independent at this point, and those that moved are not. The difference in net worth after 20 years is very significant.

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I live in Seattle. I have an engineer’s salary. I cannot presently afford a condo, let alone a house. By the time I have enough for the down payment, I will again not be able to afford a home.

You need an engineer's salary combined with another engineer's salary or very productive equity compensation. You're basically competing with folks who have both an engineer's salary(or two) combined with equity from their previous house.

Don't forget the Bank of Mom and Dad!

Nope. If you make ~200k a year, you can afford an $800k place, and I can easily find nice places in Seattle for that amount.

Nice excuse.

Only works if you want to make 20% down instead of 3%[0]

[0] https://www.knowyouroptions.com/buy-overview/affordable-mort...

> Funding from those programs often can be combined with financial gifts from your family and friends to reduce your out-of-pocket costs to buy a home.

I mean, I get the point of saying that (funding from F&F doesn’t disqualify the applicant), but man does it feel like a quasi-government agency is suggesting needy borrowers should just ask their parents for money.

Well, I tried to put 5% down; but, then I realized how much higher above asking things were selling for; and how people skip out on things like inspections. But I still want inspections, so I ask for them. This puts me down on the list of desireable buyers.

I went into a place that was selling for around 300k. I was going to offer as much as 325. I was also willing to go 5k above what the place would appraise for. This matters because you can't get a loan for above a place is worth.

The place sold for nearly 375k.

If it appraised for 325, the buyer is on the hook for an *additional* 50k that they have to pay in cash at time of signing.

You can't just not have lots of spare money in this market.

You aren’t making a typical engineering salary if you can’t afford a $500k place.

I make 150k / year. I'm an SDE 2. The problem isn't the monthly payment, the problem is the down payment.

And you've said in several places how engineers make 200k+ after 5 years. Maybe in total compensation and only in FAANG; but there are a loooot of engineering companies in Washington and the Seattle area that aren't getting hundreds of thousands of dollars in stock that's increased 5-10 fold in the last 2 years.

It’s not just the FAANG companies. You should really check out your worth on the job market. Why dismiss someone telling you that you should easily be able to get paid more? Why the victim mentality?

What exactly is the problem with a downpayment on a 350k (or, heck, 500k) unit? Obviously there are exceptional circumstances, e.g. you're supporting multiple people on your salary alone, which might make it difficult to save up 70-100k quickly.

But if you're single, your annual after-tax take-home is ~95k, assuming you max out your 401k contribution, and ~110k, assuming you don't contribute at all. Saving 50% of that does not even require living particularly frugally. That gets you to the top-end of the required down payment in 2 years.

In 2 years, the housing prices will be even higher. I just presently don't have much saving, but that's what I'm planning on doing, yes - well, not saving 50%, I do spend more than that per month; but saving at a fast rate.

Even with saving, though, I should probably save at least one more year to have an emergency fund again, so it's probably more like 3 years, but your point still stands.

I call bullshit unless you are entry level. The average engineer at a big company with 5 years experience is probably making >$200k all in. I can easily find 2bd 2bath condos and townhomes in Seattle for ~$800k.

There are lots of engineers in the Seattle area that do not work for Google, Facebook, Amazon or Microsoft. I make about 150k / year. I have 10 years experience. Were I a senior, it'd be 180k. Still not much more. It's also the most I've made at any job I've ever worked. My previous company, I was one of the highest paid employees at 115k.

Forgive me, but I think you need to check your privilege when you speak about regular matters for people like millenials trying to buy houses.

And I can't imagine a place on the planet where 800 thousand dollars is a reasonable price for a 2 bedroom, 2 bath. In the Work-From-Home days, 2 bed, 2 bath is decidedly a 1-person household (the other room is an office), *maybe* a married couple that get along well.

edit: typo

You are underpaid. You should look for other jobs to fix that. Also, at 150k you should be able to afford a place that is 500k or more. I bought my first place when I was making 115 and it cost 400k with much higher interest rates than today. Those are just facts, and it’s a fact that the average tech salary is sufficient to buy a place in Seattle.

Privilege? I grew up very poor, no one in my immediate family has finished high school, let alone college. I enlisted in the army and did a tour in a war to pay for my college. I was in a similar boat to you and the others complaining when I was early in my career and I’m trying to help with some perspective and experience.

You can complain about the cost of housing, complain about whatever privilege you think I have, but it won’t help you get to a better place. I’m offering advice to help get you all to a better place because I faced the same challenges and overcame them.

I make over 1.5x the median income in King County. Further, my company makes an effort to operate on the 50th percentile in engineering companies for our positions, so LOTS of people are "underpaid" according to you.

And I can afford a 500k place. I cannot afford the down payment and the surprise assessment tax, etc.

I see a lot of tech salaries. I assure you that you are not being paid at the 50th percentile. If your company is telling you that then they are lying to you.

It’s also clear that you don’t really want to be helped, and that you want to find every excuse to play the victim. I wish you luck.

Oh, it's not good advice financially.

In retrospect, the best thing I could have done with my money would have been to buy the most expensive house in the best neighborhood I could possibly manage. Put it all on the table.

But I didn't want to play that game, and neither did my partner (We have bad memories of the 2009 recession and both hate the idea of debt). So I suppose I traded the future riches for present flexibility.

> the best thing I could have done with my money would have been to buy the most expensive house in the best neighborhood I could possibly manage

Usually the best thing to do is to buy the worst house in the best neighbourhood. That way you are in for less cash, but are anchored to the higher prices around you.

>The main reason this is likely to be bad financially is that your house won’t appreciate like a house in Seattle.

So the only solution then is endless appreciation of house prices and salaries?

That’s how our economic system works. It’s also the only possibility if population continues to grow. There are no silver bullets here.

It’s simply astounding to me that if someone runs for an election saying they will reduce home prices, they are guaranteed to lose as land and homeowners simply don’t want that to happen. They don’t care about people who don’t have homes or simply cannot afford to even rent but only about protecting their ‘investment’. The whole setup about HOAs, bylaws, zonal regulations etc. all written around protecting the ‘investment’ instead of just seeing a home as a place to live exacerbates the problem.

There actually are several silver bullets to use like - efficient use of land, better zoning regulations and including more use of land to build more homes etc. but they are all non-starters because of greedy land and home owners.

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