Northern California - How do you guys afford a home and...

...have enough left over to eat and go out and do things with your family!?!?!

We checked out the new homes in Mare Island. Condos and houses ranging from the low $400k to $600k. So relatively affordable per Bay Area standards! But after doing our finances on even the cheaper condo we'd still be paying out the butt!!!

Maybe we should move back to TX where we can afford a house and a car payment! hehe!

But one day... we'll have a home here. I just hope it's not farther than Fairlfield since I have to commute to downtown SF!! UGH!!

Now if my wife can only find an office job that pays about the same or more than me... It's funny, she was a manager at a call center in Dallas but all she could find was a pharmacy cashier/inputer position in Oakland! It would have at least been nice if she could find something closer to Daly City. But you gotta do what you gotta do.

At least we're not as depressed about it anymore. ;)

We bought our house in the mid seventies for $58,000. Only until recently could we afford to start remodeling and fixing up the place becuase we don't have any kids at home or in college. My wife just got laid off but we're cool with it for now. We don't go out much but "Netflix" is our Friday night flic. I also started flipping bikes on CL a year or so ago so that money goes into the bike fund or buying stuff for the grandson.

The crazy increases all came during the dot-com period. The problem is that the RE bubble in the SF Bay Area hasn't deflated like the dot-com. I wouldn't be able to afford the house I'm in now if I were to purchase it today. If you can fix fixer-uppers and then flip them for a profit, then you can afford multiple properties like some of my friends.

Even if you pay off your home, the property taxes are forever.

In hot real estate markets, I've read of investors who rent and put the extra money into the stock market instead - which has been doing "wonderfully" the past few days.

I'm lucky enough to have parents that bought a condo for us while I was still in school. They paid the mortgage while I was still in university and now that I'm out and working, I've taken over the mortgage payments and am part owner on the deed. Still, the condo is only a 2 bed 1 bath and was $180k when we bought it 4 years ago. The market in the Woodland/Dixon/Parts of Sacramento area are way down and is pretty good for buyers but it's probably too far for your commute to SF. If you can get into something small now, the market should recover within a couple of years at which point you can see about selling and upgrading.

How do you guys afford a home and...
...have enough left over to eat and go out and do things with your family!?!?!


Easy... RENT ;)

Seriously though, I plan on trying to buy something in a couple years.

If you want to live closer to SF or SJ, you have to go smaller. Which is good anyway.

Unless you have 3+ kids, you DON'T need more than 2 BRs

2 kids can share a room, you and your spouse (or sig. other) only need one room (unless there are issues ;) ). To me that still seems comfortable.

So it's GENERALLY (not always true) the case that for reasonable prices you have to chose your priority. big house over proximity to work/commerce/etc, or proximity to work/etc over big house.

Personally I will live in something small, but close to stuff, rather than something large but miles away.

We squat.

Even if you pay off your home, the property taxes are forever.

It was a huge relief paying off our 15-year mortgage last year but our property taxes have increased significantly over the last several years. I'm currently paying close to $10K in prop taxes every year. And it's only my wife and I. Dang, it's like paying rent to live in your own home! I don't care how much my house is worth on paper today. It only matters when it's time to sell..:D

My brother moved to San Diego a few years back and was shocked about the real estate prices. He ended up moving back to Maryland and promptly bought a house twice the size and half the cost of what he could have gotten in California.

Dang, it's like paying rent to live in your own home!

Ain't that the truth. A friend of mine bought a big house in the area and his property taxes are on par with my mortgage payments. We bought our place 13 years ago and my plan was to stay there maybe 5 years. So much for upgrading to something bigger/nicer anywhere nearby.

This thread should be exclusive to the Bay Area... They're giving them away here in the Sacramento area. It's a buyer's dream right now.

...have enough left over to eat and go out and do things with your family!?!?!

We checked out the new homes in Mare Island. Condos and houses ranging from the low $400k to $600k. So relatively affordable per Bay Area standards! But after doing our finances on even the cheaper condo we'd still be paying out the butt!!!
. ;)

What is paying out the butt exactly? Money wise? I mean, I paid $575,000 for my house and my mortgage is $3500 a month. However, last year we got $10,000 back in taxes. I had to chill on my free willie spending habbits, and my wife stopped shopping at Macy's and Nordstoms. I actually tried to convince her to move to Austin so we could pay cash for a big house and owe nothing. ;)

Out the Butt is in the $3k range per month. But that's just the reality here. In the Dallas, TX area we paid about $1200/mo for a 3k sq ft, 4 br, 2 1/2 bath with a large backyard and 2 car garage. Taxes were 3% but that wasn't that big a deal because the monthly wasn't coming out the butt! hehe! And generally, my annual bonus would easily cover the taxes. Now that I work for the government a bonus is getting Veteran's Day off... No more big dollar bonuses here!

About 7 years ago before we decided to move to Dallas in 2001 we were looking for a place in the Daly City/Pacifica area and we were crying that houses were almost $300k! Now I'd kill for those prices again! Doh!

Oh well... With baby #2 on the way I guess we'll be squating a little bit longer in the downstairs room at my mom's house. That or pay more rent for our own place until we can get our finances in order or win the lottery!

Gary

We bought our house in the mid seventies for $58,000.

My friend's grandfather bought his home in the Sunset district in SF for about $5k... back in the '50's!!

After he passed away his kids made a pretty penny when they sold it.

We'll find a way... it's just depressing at the moment! :(

How do we afford it?

Only just barely.

We bought our house in 1996. We wouldn't be able to afford it now.

Our cars are 5 and 6 years old.

We shop at Costco, and Smart and Final. We eat out once a week (Pizza), and use very little convenience food.

We don't go to the movies much. Most of the things we like to do (cycling, walking, gardening, reading) are relatively cheap.

I buy nearly all my bike stuff online, and usually at big discounts. I spent too much on bike stuff this year, but dang, that Battaglin is a SWEET bike! My jerseys are older than our cars. My cycling shoes are falling apart - literally. I have to sew the velcro back onto one of the straps tonight.

Yep, it's expensive here. But really, what's it worth to NOT live in Texas?
For me, almost any amount.

I'm a part time street pharmacist...


:p i keed i keed...

How do we afford it?

Only just barely.


+1...also one reason why I drive a 10 year old car and ride an old, simple, single geared bicycle. :D

The key to the Bay Area is buying at the right time. Back in the early 90's I was looking at houses in the Sunnyvale area and though "Damn! $300k is too much." Now you can't find a house under $600k.

We did get lucky in the Antioch area though. We bought a house back in '02 for just under $300k. Now, if we can only find work nearby then everything else will be gravy.

Man it seems like such a hassle to own. Commute, Mortgage, Property Tax, being in debt for 15+ years. I am at the stage of my life where renting is more convenient. Of course it doesn't help that I am broke. :(

I have had 0 luck with any type of a career job. I have all the education, training, even the damn experience and just can't seem to get a break. Either way, if I did have that "job" adding my wifes income we would be able to afford something in the south bay.

The trick is.. what? A larger fixer? <-- forces you to live in a construction zone, never fun.

- OR -

A flipped something were the work is already done, hopefully you have the same taste as ther flipper..

However, all this is garbage anyway.. since the pipedream of having the 20% down pretty much means unless I start knocking off liquor stores twice a day for the next six months we're screwed just like everybody else who is on the outside looking in.

frustrating at best.

Accoring to Curtis - Whats it worth NOT living in Texas?

No offense Gee, but when I travel back east to visit family, I have at times paid more money and even changed companies to avoid flying over or landing in Texas. I live there before, I have sworn to NEVER return for any reason, if I was dying and the cure was in texas, I'd just get a shovel and go out in my backyard, leave a note and 20bux saying "If you find me, cover please".

Priorities!!! Spend it on the bike!

You guys who are worried about your taxes -- you can get some relief by having your home reassessed. If your neighborhood is in a declining market, and your home doesn't appraise for what you paid for it, you can talk to your county assessor about making an adjustment on your assessed rate, and therefore pay less tax. There's some paperwork you have to do, but you may find you can make significant savings if you go this route.

Disclosure: I'm a Realtor, and I have a couple clients who've gone this route. It helps.

I must be assbackwards.

What I did was put a down on a house and rented it out. I rented a small studio apt to live in. I had a renters write off from my studio AND a write off because I had a home I rented out. Refinanced after three years from a 30 year to a 15 year. Bought another house, rented THAT and moved into the first house I bought. Made principal only payments on the second house in addition to the regular payments.

The first house is going to be paid off in a few months, the second house should be paid off in about 10 years or so.

And by the way, my job is not the greatest paying job.

I just let the houses take care of each other.

You are so smart! That's terrific that you planned so smart, and are reaping the benefits of owning real estate.

Invest today, I say. You did. Well done!

How about buying a duplex and renting out the other half?

Sorry I can't be more help. I bought my house in Benicia when Mare Island was closing down so unemployment was high and prices were depressed. Sold it a few years later and reaped a huge gain. Then, bought my in-laws place, which they've owned since 1977, for peanuts and got a huge break on property taxes because it was "grandfathered in". Truthfully, my mortgage is less than 2 grand and property tax is in the very low 4 digits per year. My house will be paid off in less than 15 years. It was going to be sooner but I became a new Dad again so college tution for my first born next year and, now, child care for my little one.

Do what a lot of us have done...Give up on the bay area and move to the Sacramento area. The houses are still quite reasonable, by California standards. This area is also home to many call centers. The only downside to this area, that I can think of, is the summer heat.

I got in during the last year of the go-go real estate market. I bought a nice conversion condo in Fairfield in 2004 - right after I got my professional engineering license. Things were up up up from there and two years later it had appreciated (on paper) quite a bit. We were planning to move to Davis after a couple years so last year, I borrowed against the condo and used it as a down payment on a home in Davis.

The end result: I am in debt up to my eyeballs, and the condo is now worth less than what I owe. Chalk it up as a rookie mistake. Fortunately, the Davis market has held pretty strong through these times and I have some good tenants in Fairfield.

Yeah...Davis market is good if you're already in it. It's all the no new construction regulations. Not so good if your looking though. You can get the same house in Woodland 7mi away for $100k less than one in Davis. Nice deal Siu on the great real estate sense. I have something similar going on now but I actually have to pay in to a rental unit that I'm in partnership with. Oh well, I'll just think of it as a long term savings account that I can cash out in 5 or so years. For me, renting is almost like throwing your money away. That money will never work for you. I guess that's why home ownership is so important. It's the first step towards financial independence.

Chalk it up as a rookie mistake.

I don't think its a rookie mistake. I'd say, getting caught in "the bad times" of RE. The cycle of home sales/price I think is directly connected to who is sitting in the office. just my .02 and I am not going to explain why.

In Nevada, and in neighboring California, home equity finance was about 20 percent of all disposable income at the end of last year, according to Economy.com. This September, it was down to about 9 percent.

20% !!!

http://www.nytimes.com/2007/11/08/business/08borrow.html?pagewanted=2&_r=1&ref=business

"Say it! Say it! Say "I lost the nest-egg." Go on, say it!"

Do what a lot of us have done...Give up on the bay area and move to the Sacramento area. The houses are still quite reasonable, by California standards. This area is also home to many call centers. The only downside to this area, that I can think of, is the summer heat.

I moved to the Folsom area 2 years ago. I lived in the east bay my whole life and its been the best thing I've ever done. I still commute to the east bay 4 times per week via amtrak and carpool. The river trail up here is what started my interest in cycling. 30+ miles of river trails w/ no cars Wow Wee. Now I think I will be hooked on cycling forever!!

I had a renters write off from my studio AND a write off because I had a home I rented out. .

Hi, I am curious about the renters write off from studio. Are you saying that you got tax write-off for renting your primary residence? Or are you saying that your studio served as your place of business also and thus the write-off? Thanks!

Hi, I am curious about the renters write off from studio. Are you saying that you got tax write-off for renting your primary residence? Or are you saying that your studio served as your place of business also and thus the write-off? Thanks!


I was wondering the same thing?

Great idea, just curious on how it worked.

Maybe they're talking about renter's credit?

Thien - can I get in on your pharmaceutical biz? I can expand your coverage area more North! hehe!

Siu - We were planning to do something similar in TX... but then we moved back to the Yay Area. Doh! We're still renting our home in TX and should have some decent write off's but we may eventually have to sell it to be able to get something out here. But I do like the idea of buying a place and then renting it out. But how hard is it to find a renter that'll cover the mortgage payment at today's prices?

Deborah (Red Rider) - My wife was in the mortgage biz back in TX. when she did the calulations at CA prices she just got depressed. If we remove her name from the TX home, can she qualify for a First Time Buyer's loan?

Everyone else... thanks for the good words. It's good to see that others are in similar situations. At least we weren't the only ones to miss the boat. Misery loves company! haha!

We'll keep on chugging along and one day we'll have our own home. Even if we're renting it out to someone else! haha! We even played with the idea of getting a duplex with a friend but our friends aren't ready to buy like us. Plus, we'd want a duplex in the $800k area close to SF. Possible?

Gary

Yep, it's expensive here. But really, what's it worth to NOT live in Texas?
For me, almost any amount.

Hey Curtis! Honestly... I felt the same way until I moved there. TX was good to us. We had it pretty good out there and the public school system in our suburban area (Not Dallas) is very good. But we thought we could come back and get things going again back here. I guess we were a little too used to TX prices. (read: naive!) haha! But we are determined to make it here.

Actually, I was just offered my old position back in Dallas. But the wife wouldn't have it. No more big moves for us unless it's into our own home IN THE bay area! :)

You should just go and buy your dream home and hope for the best. Most important thing is don't over extend yourself on credit. Market goes up and down but in the long run, it will give you a nice retirement fund (this is where hoping for the best come in or ....... ).

Hey Curtis! Honestly... I felt the same way until I moved there. TX was good to us... and the public school system in our suburban area (Not Dallas) is very good.

Let us hope the bad schools are localized to only Dalas...

"Let Are Kids Walk!" --> http://www.wfaa.com/sharedcontent/dws/wfaa/latestnews/stories/wfaa070524_wz_taksprotest.6fe879b.html

:rolleyes:

Hi, I am curious about the renters write off from studio. Are you saying that you got tax write-off for renting your primary residence? Or are you saying that your studio served as your place of business also and thus the write-off? Thanks!

You can write off both. You can claim renter's credit on your taxes but it's minimal.

As for the rental property, you can write off the taxes, interest, repair and travel for repair expenses on your taxes. Of course you have to report the rent you receive as income. You can also depreciate the rental property. It's has been number of years since I had a rental property so the current tax law may have changed.

Well I've owned a house in Austin and in DC, but I'm currently renting in the Bay Area. Frankly, the burdens of buying in this market really seem to outweigh any benefits. The difference between renting my townhome and buying a townhome in the same complex is over $2500/month. I just don't see any economic benefit in pulling the trigger in this market when I can be investing the difference. I think we're just too ingrained that buying a home is representative of success.

Yes, I miss my 3,000 square foot home in Austin, but we rarely used the entire house, 3 rooms were basically empty. What I do need is a garage for all my outdoor gear (4 bikes, a sea kayak, a whitewater boat, etc.). That's the critical issue for me now.

I have a short commute in the Bay Area and I can hop on my bike and hit Portola Valley easily enough. No complaints.

But I do like the idea of buying a place and then renting it out. But how hard is it to find a renter that'll cover the mortgage payment at today's prices?

Gary

If you looking at just rental property, you need to look outside of the bay area. The prices are just way too high here to have rent cover the mortgage, taxes and insurance. I have been reading about about buying rental properties around college towns where the rental demand is high. The down side of it is the maintenance and turnover rate is going to be high too.

We bought our house two years ago, yes it's expensive and it was an uncomfortably large payment to start with; but we've gotten used to it and our pay has increased so it's not too bad.

After the tax benefits it's still more expensive, so I'm confused how anyone could buy a place and rent it out and come anywhere near breaking even. I didn't like living by a landlords rules, wanted a yard and a garage, no more rent increases (got a fixed mortgage), etc. - if I could make the decision all over I'd do it again everytime.

...have enough left over to eat and go out and do things with your family!?!?! Actually, we don't live in houses. Those are just facades hiding the tent cabins we really live in so we can afford our nice bikes.

Let us hope the bad schools are localized to only Dalas...

"Let Are Kids Walk!" --> http://www.wfaa.com/sharedcontent/dws/wfaa/latestnews/stories/wfaa070524_wz_taksprotest.6fe879b.html

:rolleyes:

Bwahahahahaa!! I remember seeing that before. That was in Ft. Worth... We lived about 30 miles North of Dallas in Allen so we have more literate schools... well, at least more literate people that know how to use correct grammar! hehe!



Actually, we don't live in houses. Those are just facades hiding the tent cabins we really live in so we can afford our nice bikes.

So that's how you do it!! Heck, I'll run to REI and grab me a decent tent to put behind my new cool overpriced facade! hahaha!