Nov 13 2007
The descent into poverty
I’m having a really hard time with Bay Area real estate.
Tracee and I do pretty well. We’re not high earners – neither of us are rockin’ the six figure salary or anything like that – but we’re in a very good spot financially. And yet despite having plenty of cash each month, when we pick up that paper on Sunday, or talk to our realtor, the homes that are in our price range are, well, shite. Dumps. Things that in any other part of the country would sell for $300k at most, are selling here for twice that and then some.
Case in point. We found a house that we kinda like. Note I said “kinda like” – this is because we’ve only looked at it online. But it’s in a good location for us, looks like it won’t need a lot of work, if any, and looks to be the right size for us (1400 sf, 3br). But it’s… $800,000.
Am I the only person that thinks this is completely asinine?!?! Apparantly so. When we talk to our realtor, or our finance people, they seem to think it’s a steal, it’s deal, it’s the sale of the fucking century. (Brownie points if you get the quote. I know JB will!) When we talk to Tracee’s parents about it, they just shrug and say we need to max ourselves out as much as possible, because otherwise we’ll regret it.
Problems with this theory – an $800k house will leave us with a mortgage payment of about $5,000 EVERY MONTH. Now yeah, fat tax benefits come with this, and our finance folk point out that this mortgage payment will be the equivalent of only $3,450 when we adjust our monthly tax withholdings.
Only $3,450. Only $3,450.
Again, people tell us that this is the price you pay for living in such a great place like the Bay Area. And I agree to a certain extent. But as kickass as it is here, does it really – REALLY – justify having housing prices that are four times higher than areas like Fort Collins, or Austin, et al? Both cool towns (although I wouldn’t wanna live there) but the same house we’re looking at here would be considerably less than $200k in those markets. And yes, salaries are more here, but not four times more.
All of this is scary enough for folks like us; young professionals who earn a very good living. But it makes me wonder how others can afford to live here. Okay, sure – in Marin, we’re looking at a REALLY high rent area – but you go outside Marin, to other counties. Go north to Sonoma. Go east to Alameda or Contra Costa. You’re still looking at over $500,000 for a starter home. How the hell can the average family of four manage this? How can the folks working in the service industry afford to live here? In short, how can the housing market exploit people THAT much? Because people are willing to pay.
Which is what we’re gonna do. And I’m sure once we’re out of this apartment and into an actual home, my opinion will change somewhat, thinking that it’s worth it. But right now, I just can’t help but think of the first of the month, writing checks for half of our monthly income, and feeling the pinch.
