Hacker News Reader

Comment by kghose | Hacker News Reader

So, a double income family, each person earning $250,000 with proceeds from a previous house sale for downpayment, can manage quite easily, no?

Pre tax income: 41666/month

20% Down = $300000 Borrow 1.2M @ 4.0% = $5728.98/mo

This looks quite doable.

Heck, with half that income, you could do it!

View on HN

Only in the Bay Area do people say "Well, if your household is making half a million a year it's affordable!" It reminds me of the Wall Street Journal disconnect last year [0] regarding taxes (those single mothers making $250k a year are really suffering). The Bay isn't the real world by a long shot.

I just moved away from the Bay Area for this exact reason. I went from making $120k a year to $85k a year, but in Washington I can get a decent family home for $150k. The Bay Area can't come remotely close to matching that kind of deal, even with the ludicrous salaries.

[0] http://i.imgur.com/bdgZa.jpg, http://online.wsj.com/news/articles/SB1000142412788732368960...

>The Bay isn't the real world by a long shot.

Neither is Manhattan. From the NYT in 2009, and prices for schools and child care and real estate have only gone up since then:

http://www.nytimes.com/2009/02/08/fashion/08halfmill.html "Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast."

A lot of this is real estate and private schools, of course. You could get a 5br/5,000 ft^2 house in Green Bay, Wisconsin for 400K: http://www.zillow.com/homedetails/3318-Whittier-Ct-Green-Bay...

While a 5br/5,000 ft^2 prewar apartment (not even a single-family home!) in Manhattan would be $24M, and that's with a kinda small and not very attractive kitchen: http://www.mironproperties.com/NY/NYC-Apartment-38737-Upper-...

Many folks, like you, are better off moving away from the Bay Area and taking a salary cut if they don't already own a house and would like to buy one.

NYC is very expensive, but $24m is hyperbole. Corcoran listings for 5+ bedroom townhouses in Manhattan begin at $2.3m, still a very princely sum: http://tinyurl.com/l7hukd6

(If you're willing to live outside Manhattan, in one of the "outer boroughs", prices drop dramatically.)

Um, I think you left off a zero. :)

If you use that Corcoran link you provided and restrict your searches to townhouses in the $2.3-$2.7M range with 5br, you get only Harlem, not Manhattan: http://tinyurl.com/nvftwqm

Harlem is in Manhattan.

Ah, didn't know that. I'm a non-NYC dweller and thought it was a separate borough.

> each person earning $250,000

Well back to the original question, who are these people earning $250k each? Is this common? Most people in the tech sector I know (ok not in SF) make about half that and I cant' say they are not productive or are stupid. Is that the valley of CEOs and upper management? Foreign investors buying up houses and not living in them just as a way to store their wealth...

  Foreign investors buying up houses and not living in them just as a way to store their wealth...

I'd wager that this would be more the case in places like New York, or London.

This :

http://www.vanityfair.com/society/2013/04/mysterious-residen...

is quite an interesting read on the subject.

This is a joke, right? Reliably earning $250k is not easy even in the tech industry (bonuses and stock options are not even remotely reliable and hence should never be factored into the affordability of a mortgage payment). But on top of that, now you have to marry a spouse also making $250k. You're saying you have to borderline be a gold digger.

Yes, you could do it but it's really a bad strategy. You are essentially betting all of your surplus income in to your house which is by any sane measure is already extremely overpriced. The worse thing is that the cause of this housing bubble is entirely artificial as per the article. It's not that there is no more land to build right around Google and Facebook campuses but that current residents are actively preventing new construction. This can't last longer. Eventually pressure would be too high for local authorities to change laws and with one stroke of pen bubble will burst. There too many other black swans such as earth quake or building new public transport or train system etc. I can only feel pity for those double income families who are working very hard and sacrificing seeing their kids etc just so they can throw their hard earned money in to this madness.

> Eventually pressure would be too high for local authorities to change laws and with one stroke of pen bubble will burst.

Yes, if you believe that ~100 cities in the Bay Area are somehow preventing housing from being built with laws, then certainly yes.

Major outlier, no? That would be quite a wealthy family. You're basically talking two company CxOs living in the same house. I can see maybe a few households in that situation, but what of the rest of the hundreds of thousands of people who live up and down the Peninsula?

Ok, the replies to this make me wonder - I thought a two income family in SV was usually making in the range of $300k. Are the respondents below from SV?

Reply on news.ycombinator.com