patrick.net

CaptainShuddup says

Condohelp says

Our real estate agent said we would have to pay at least $750k for good schools all the way through.

And your kids deserve good schools, and you deserve a $750 home, and everyone can pound sand. Right? Right? I know those cretins, who do they think they are, we need poor people and counter, help not ALL schools can be GOOD schools.

Let me ask you Caliclowns something, when you pay one of your myriad of Taxes, to you say, "and this fiddy goes, for that school and that peso goes for that school"?

Or does it all go to the good school and that's why body Armour is standard issue faculty gear, at the other schools. Do they have to do bake sales to cover their Kevlar?

California is easily the best state in the union. Does it have problems, sure. But short of falling into the ocean, there is nothing that will stop it from remaining so. Captain, where do you live? Texas, Idaho or some other god forsaken place?

Condohelp says

Please let me know your thoughts.

Since you asked...

If you do not have children yet I think you are jumping the gun to want to buy a house primarily for the schools. Even if you were to become pregnant tonight it would be at least almost 6 years before you'd need a public school of any kind. You would also be dependent on a static or improving school district for almost 20 years, a risky proposition in California indeed. A lot can happen in that time. Schools change, neighborhoods change, mortgage interest rates change, property values change, tax consequences of a mortgage default change, etc.

I went back to the neighborhood where I grew up a few days ago and spoke with two of our former neighbors. This is an area with many top rated schools and where the majority of houses are valued well over $750k. The first neighbor was bragging about how wonderful the local schools are there. He was telling me how people are desperate to buy into this area for these wonderful schools. His children had gone though those same schools but had moved on over 10 years ago. The second neighbor complained that his granddaughter had to be pulled out of the local middle school because of the poor behavior of the other students (including violence). Instead they had to pay to put her into private school.

The moral of this story? Buying into a "good" neighborhood does NOT guarantee good or even safe schools. I bet if you take a good hard look at even the vaunted Cupertino schools you'll find they have plenty of problems as well.

For reference, my parents bought in Cambrian back in 1979 since I was in their plans a few years later. They bought there because it was safe, and less expensive than Palo Alto / Cupertino / Saratoga. I believe that they paid $103k at the time, and it was 3.1x their combined income (both in semitech back then).

After kindergarten, they moved me to the parochial school that some of my cousins were going to because the difference was (apparently) very apparent. Parochial school is a lot cheaper than "private school," although it is a form of private school. So, they bought in a less expensive area and paid for private education. From talking to parents in the "nicer" areas that they had previously avoided, it didn't sound like the schools themselves were actually much better.

When I got to college, I found that a lot of my fellow engineering students had been through various public schooling systems, and almost none were from the Bay Area. Overall, I think that upbringing had a lot more to do with kids' success than the school. Yeah, there is a limit where you can't have them watching others doing meth in the parking lot, but to think that you have to go to some "top API" school to have any success in life is stupid.

Maybe that school WILL send them on to Harvard to get a medical degree...but there is NO guarantee that they will actually be happy if they do that. Happiness, success and money just aren't correlated to the degree that so many seem think. I also think that a lot of parents project their own perceived personal failures onto their kids, which sucks for the kids. "Man, I should have been a doctor or lawyer and made tons of money. Money would solve EVERYTHING! Well, I guess I had better not let my kid make THAT mistake!"......"Uhhhh, thanks...dad..."

(my parents were definitely NOT that type, although they did say that they wouldn't support me financially if I went to college to study business or comm lol)

rowemoore says

California is easily the best state in the union.

If you have money. Lots and lots of money.

wthrfrk80 says

California is easily the best state in the union.

Why, because you live there? Ask some people from Chicago what they think about California. They say, California is full of fruits and nuts, and they aren't talking about the agriculture.

dunnross says

Ask some people from Chicago what they think about California. They say, California is full of fruits and nuts, and they aren't talking about the agriculture.

It's not just people from Chicago. ;-)

Condohelp.
The markets where you are looking are incredibly tight. There is almost nothing for sale and anything with the best schools is getting snatched up quickly. This is not because demand is booming, but because there is almost no supply available. Most of the homes that would have been on the market as short sales or foreclosures are tied up in modification programs or simply part of the banks' backlog.

Point is, this is a really tough time to buy. You would probably benefit from renting another year to let more supply come to market. Prices will go up this Spring and Summer, but probably fade towards the end of the year and you should end up with more to choose from and fewer competing bids on homes in the best spots.

dunnross says

wthrfrk80 says

California is easily the best state in the union.

Why, because you live there? Ask some people from Chicago what they think about California. They say, California is full of fruits and nuts, and they aren't talking about the agriculture.

I met Jerry Brown when I moved here FROM Chicago. He asked my why I would move to Oakland, since Chicago has it going on. And he had just been elected mayor of Oakland! :)

Another option to consider is renting or buying in a bad school district and going to private school. I went to public school and I think I ended up ok, but comparing our friends kids that go to the elite public school in Oakland - Piedmont to ours, I'm so happy my wife pushed us to do this.

Our public elementary school is Emerson (ranked bottom 7% in CA). We just missed the boundary for Chabot Elementary (ranked top 4% in CA) by 4 houses. Looking back, I'm actually grateful we are in a bad school district.

genesplitter says

Another option to consider is renting or buying in a bad school district and going to private school. I went to public school and I think I ended up ok, but comparing our friends kids that go to the elite public school in Oakland - Piedmont to ours, I'm so happy my wife pushed us to do this.

Our public elementary school is Emerson (ranked bottom 7% in CA). We just missed the boundary for Chabot Elementary (ranked top 4% in CA) by 4 houses. Looking back, I'm actually grateful we are in a bad school district.

When it comes time to sell, you may feel differently.

rowemoore says

When it comes time to sell, you may feel differently.

The school district was the same when he bought it, so that cancels out:

Bad school district = discount when you buy, discount when you sell
Good school district = premium when you buy, premium when you sell

You get exactly as much as you give, so there's no need to feel good or bad about it.

wthrfrk80 says

dunnross says

Ask some people from Chicago what they think about California. They say, California is full of fruits and nuts, and they aren't talking about the agriculture.
It's not just people from Chicago. ;-)

I'll second that!
You couldn't get me to live in a big city in California for triple my current salary.
I find this whole discussion sad - the national average house is about $140k (IIRC); what about the BA makes it worth 4+ times the average?

Good luck with your search - as others have said, don't make an emotional decision. I have have been fortunate to come out ahead in housing so far and I'm sure you can do.

lurking says

There is nothing like massive, passive rental income and it worked out better than I could have ever dreamed when everyone else was predicting doom and glooom :-)

Nothing quite like living on unearned income, like taking peoples hard earned just scraping by money and living off of them.

The obsession with unearned income in the US and Bay Area is killing the ability for people who do work for a living to maintain the rentier class's lavish lifestyle.

Good school district = premium when you buy, premium when you sell

Most school districts that are claimed to be good are garbage. The API score is a game. The scale is really horrible to just passing. If you want something above just passing, prepare to teach your kids or have kids that are good at teaching themselves.

rowemoore says

California is easily the best state in the union. Does it have problems, sure. But short of falling into the ocean, there is nothing that will stop it from remaining so. Captain, where do you live? Texas, Idaho or some other god forsaken place?

I've lived all over. With kids, this is the worst state. And most homes are moldy, asbestos ridden tiny pieces of junk with garbage schools. The infrastructure is collapsing under the load and the quality of life stinks for those not in the one-percent club.

I'd rather be poor and free then be enslaved to this horrible place with the best marketing team inflating its value.

Family and friends is the most important thing. The bay area is about money. Nobody is friendly anymore, families often have 2 to 3 jobs, and the kids are all latchkey. This system sucks.

Mick Russom says

The obsession with unearned income in the US and Bay Area is killing the ability for people who do work for a living to maintain the rentier class's lavish lifestyle.

If you don't approve of unlimited untaxed unearned income extracted from working class labor that means you are a SOCIALIST! At least according to the Republican Party.

dunnross says

Ask some people from Chicago what they think about California. They say, California is full of fruits and nuts, and they aren't talking about the agriculture.

I moved from Chicago to California, and my boss's first comment when I said I was leaving was "But California isn't real. Chicago is real."

Chicago is very real. Too real for me. I still love Chicago in spring and fall, but not in winter or summer. When I'm rich I'll have an apartment there for visiting.

California is like a very beautiful but stupid woman. Kind of painful and expensive to deal with at times, but just looks so damn good that you forgive it. Can't have everything.

chemechie says

the national average house is about $140k (IIRC); what about the BA makes it worth 4+ times the average?

A lot of people say it's because there is a lot of money floating around here. Well, if that was really true, than everything else would be 4x times more expensive. But you don't see gas or food prices 4x more expensive than everywhere else. I don't pay more for medical care here, than my friends do in Chicago. Clothes isn't more expensive. Cars aren't more expensive. Its just houses are 4x times more expensive + they are 4x worse in quality than everywhere else.

Mick Russom says

Nothing quite like living on unearned income, like taking peoples hard earned just scraping by money and living off of them.
The obsession with unearned income in the US and Bay Area is killing the ability for people who do work for a living to maintain the rentier class's lavish lifestyle.

Oh come now, that's what America is all about: getting rich at someone else's expense. Ask any black guy how that works. Or any native American. Or any white guy who's ancestors worked in coal mines or steel mills in the 1800s.

If you don't approve of unlimited untaxed unearned income extracted from working class labor that means you are a SOCIALIST! At least according to the Republican Party.

Well said.

rowemoore says

When it comes time to sell, you may feel differently.

The school district was the same when he bought it, so that cancels out:

Bad school district = discount when you buy, discount when you sell
Good school district = premium when you buy, premium when you sell

You get exactly as much as you give, so there's no need to feel good or bad about it.

If both goes up by 10%, gain for the premium one is higher in absolute dollar. Just for illustration:
Price Bad school district Good school district
-----------------------------------------------
Buying $400,000 $1,000,000
Selling $440,000 $1,100,000
-------- ----------
Gain $40,000 $100,000

dunnross says

Clothes isn't more expensive. Cars aren't more expensive. Its just houses are 4x times more expensive + they are 4x worse in quality than everywhere else.

Supply of houses are limited. Plenty of choices for cars and clothes. Law of supply and demand.

wthrfrk80 says

Oh come now, that's what America is all about: getting rich at someone else's expense. Ask any black guy how that works. Or any native American. Or any white guy who's ancestors worked in coal mines or steel mills in the 1800s.

The whole world knew that. Other nations are awakening and are responding accordingly.

Our way of life where we paid peanuts for other nations' labor and then sold them products at high price is fading. Going forward, our life could be a lot tougher than previous generations.

hanera says

If both goes up by 10%, gain for the premium one is higher in absolute dollar.

Yes, they both could go up by 10% and the more expensive house would gain more. But if you assume that, then you are assuming an ever-larger divergence in prices.

hanera says

Law of supply and demand.

Not entirely. We also have much higher jumbo loan limits here in CA, to encourage people to prop up the ultra-high prices via ultra-high mortgage debt:

Seven Bay Area counties currently have ‘high cost’ conforming loan limits at the national maximum of $729,750.

http://bayarearealestatefinance.com/when-do-conforming-loan-limits-change/

Or has that been reduced a bit now?

The real injustice is that people in the Midwest are forced by federal law to guarantee ridiculous mortgages in California, amounts far beyond anything people in the Midwest themselves are eligible for.

2 years after a short sale and your credit is good enough to buy and you have a nice down payment?

I'm an idiot. I'm actually mad at you Patrick for convincing me not to buy during the bubble.

hanera says

dunnross says

Clothes isn't more expensive. Cars aren't more expensive. Its just houses are 4x times more expensive + they are 4x worse in quality than everywhere else.

Supply of houses are limited. Plenty of choices for cars and clothes. Law of supply and demand.

And I suppose, supply of gas is also unlimited. Actually, for those of you who think that supply of land is limited in the Bay Area, I invite you to get off your ass, and travel to a place like Monte Carlo or Honk Kong, to see what a place with limited land really looks like. After you come back, you will see that there is plenty of land in the Bay Area.

The real injustice is that people in the Midwest are forced by federal law to guarantee ridiculous mortgages in California, amounts far beyond anything people in the Midwest themselves are eligible for.

What about the fact that we pay the same federal tax rate in a place where the cost of living is so much higher. And besides, most flyover states take in more federal dollars than they pay.

http://motherjones.com/politics/2011/11/states-federal-taxes-spending-charts-maps

Rowemore is the moron. You must employ illegals yourself to attack me. "When you have no basis for argument, abuse the plaintiff."
I didn't say illegal aliens sometimes are not hard workers. Of course they work to make money. The minimum wage today in mexico is about 6 bucks, per day.
The family loving comment made me laugh but in another post I will tell you some interesting heartwarming stories. They are no different than we, the *functional families* appear great. You wouldn't often know anything about the dysfunctional ones, however I do since I met so many people when I lived there.
Either way, they are just one reason you want to be wondering about the future of California real estate, taxes, debt, and economy.
As I mentioned previously, although a college education is essentially free in Mexico, most Mexicans are high school dropouts.
This of course is the polar opposite of China for example.
Everyone who believes that the people south of the border are NOT capable of sitting through classes and studying is of course the bigot racist, not I. I believe that every kid can sweat out school if he is not rewarded for dropping out with a job in the US.
There is physical laziness and intellectual laziness and ignorance. Neither should be rewarded.

dunnross says

hanera says

dunnross says

Clothes isn't more expensive. Cars aren't more expensive. Its just houses are 4x times more expensive + they are 4x worse in quality than everywhere else.

Supply of houses are limited. Plenty of choices for cars and clothes. Law of supply and demand.

And I suppose, supply of gas is also unlimited. Actually, for those of you who think that supply of land is limited in the Bay Area, I invite you to get off your ass, and travel to a place like Monte Carlo or Honk Kong, to see what a place with limited land really looks like. After you come back, you will see that there is plenty of land in the Bay Area.

Supply of houses NOT supply of land.

jessica says

I'm an idiot. I'm actually mad at you Patrick for convincing me not to buy during the bubble.

Well yes, fraud is definitely more profitable if you can get away with it. Sorry about that.

clambo says

Rowemore is the moron. You must employ illegals yourself to attack me. "When you have no basis for argument, abuse the plaintiff."

To begin, I was commenting on the fact that you insulted the op by saying you felt sorry for her husband.

But having read the rest of your comments, I have no problem standing by my description of your intellect.

jessica says

2 years after a short sale and your credit is good enough to buy and you have a nice down payment?

I'm an idiot. I'm actually mad at you Patrick for convincing me not to buy during the bubble.

I am still wondering why your kinda comment was not the first on this thread. Seriously,no offense to OP,but I am amazed at your guts of getting out on a short sale and getting into buying that fast.

rowemoore says

California is easily the best state in the union. Does it have problems, sure. But short of falling into the ocean, there is nothing that will stop it from remaining so. Captain, where do you live? Texas, Idaho or some other god forsaken place?

They should call it the Stockholm State.

I guess you folks just feel like it's worth it for the by chance happenstance you might run into a movie star at 7-11 buying a pack of smokes.

rowemoore says

And besides, most flyover states take in more federal dollars than they pay.

True, because those crops grown in the "flyover" states must get to the population centers somehow. Usually that's done with roads. Do you want to privatize the road network?

hanera says

Supply of houses NOT supply of land.

Right ;) I guess, construction workers are much more expensive these days than either doctors or petroleum engineers.

dunnross says

hanera says

Supply of houses NOT supply of land.

Right ;) I guess, construction workers are much more expensive these days than either doctors or petroleum engineers.

Please refer to orbitron's post #50 on houses, land and built-able lots.

Condohelp says

I'm also concerned about all of the IPOS in the silicon valley and all of the wealth that gets pumped through this area.

very little concern to have.. this isnt 1998-1999 with a tech stock bubble. There is a very very big difference.

to give you a perspective.. lets take a 'no one ever heard of company stock' like Invensense... and give it a stock price of say $450 or 650/share. Amd lets have maybe 50 other companies have similar situations. Today, at best you have only LinedIN with PE at 900x next years earningsm, which means at best its really worth less than $5 per share and not $100 per share.

http://finance.yahoo.com/q?s=INVN

You talk of wealth, but the reality is its the stock buyers major Loss... Yahoo at say $350/share in 1999 which goes down to $15-20/share. What wealth ?

The real injustice is that people in the Midwest are forced by federal law to guarantee ridiculous mortgages in California, amounts far beyond anything people in the Midwest themselves are eligible for.

Its the same midwest and eastern people who have came to California and became bullish on prices creating the bubble... did you see Californians overbid overpay to the same extent back in the late 80s and early 90s. But you are right people in the Midwest and East coast who will paying the bill. It all depends who you call a Californian.

Can I say something unpleasant?

we are renting a 3 bedroom and 2 1/2 bath townhouse with much more space. ... I don't plan to work as soon as we have children

You don't have any kids yet, so it's just the two of you, yet you rent a massive townhouse with three times as many bedrooms and two and a half times as many bathrooms as you actually need.

Since you're planning to not work (your husband is OK with this, isn't he?), my suggestion is to buy a 2BR condo within walking distance of your husband's job. If he can get home right away every day, he'll be a lot less exhausted and a lot happier, and when your family has one breadwinner, that person has to be happy. Make the second bedroom the eventual kid's room. Trying to "stretch" to buy something even more expensive than you can afford now, then dropping down to one income, is sure to make the earner of that income feel like a slave or beast of burden. Don't buy more house than you absolutely need.

Are you planning to have a second child? If so, and if this child is the opposite sex of your first, then yes, years down the road you'll eventually need a third bedroom, but you certainly don't need that now, while you're renting.

You blame your husband for making a "mistake" in purchasing a 1BR condo that left the two of you "stuck in such small quarters". Millions of newly-married couples and soon-to-marry couples live in that kind of space. That's just sensible home buying. JVolstad knows what's up: don't let Suzanne talk you into buying something you can't afford and making your husband miserable. Small and convenient is the way to go.

wthrfrk80 says

rowemoore says

And besides, most flyover states take in more federal dollars than they pay.

True, because those crops grown in the "flyover" states must get to the population centers somehow. Usually that's done with roads. Do you want to privatize the road network?

I'm not a libertarian, just a sixth generation Californian who is tired of all the haters.

Ironically, California has been the #1 agriculture provider to the US for like a half a century. We could do just fine without your corn...

BTW, if it makes you feel any better I think NYC is the greatest city in the world.