patrick.net

B.A.C.A.H. says

Maybe not propping up forever, but just as long as more of them keep comin', and keep bringing their API-centric attitude with them.

Did anyone ever question how can it be, that these API scores are so high if these schools are only attended by immigrants form China? As far as I know, very few immigrants can learn English that fast, and beat out API scores of native-born English speakers. My guess is, that these are not immigrants at all, but 2nd/3rd generation of Chinese Americans, who are attending these schools.

dunnross says

that these API scores are so high if these schools are only attended by immigrants form China?

Because it's their kids who are the students. Kids like Harvard alum Jeremy Lin. Dunross, it sounds like you don't spend much time in local public K-12.

I'm thinking some writers here are not aware of which countries make up the continent of Asia.

well if you want to be semantic about it, much of Hong Kong is not part of continental Asia. Nor is much of Mumbai. Nor is Taiwan, nor Singapore. For that matter, my NY relatives don't live in the continental United States.

dunnross says

As far as I know, very few immigrants can learn English that fast, and beat out API scores of native-born English speakers.

Take the Vietnamese in San Jose. The early ones that came over in the 70s-early 80s.. dirt fucking poor but educated in the French style schools and took to US schools pretty well. Heavy on Science/Math/language. See them back in the day with Calculas and Computer Science text books were a common sight with these kids. Math and Comp programming are a language on their own. They did well with their work ethic, hard work, savings, etc. Language skills at first were poor but they managed ok.

The same applied when HK was about to be handed over to Mainland China in 1997.. so many 10 years prior "fled" to the US, settled in places like Cupertino, Santa Clara, San Jose, which impacted test scores, but didnt impact home prices which declined from 1989 to mid 90s. Certianly many knew English, since it as a British Colony. I certainly didnt see any getting hired into SV back than, their Children after college did... I saw them as mainly merchants who set up small stores locally and did well. Many stores like the ones you see in ranch 99 were abandoned strip malls which became Chinese stores. However even today Valco mall, hasnt even come close to recovering back from the 89-mid 90s recession. Back in the 80s Valco was much more busier than today.

Chinese immigrants to Cupertino today... beats me. Its a mania.

Neither the Vietnamese or HK Chinese had money or willing to overpay for homes so we didnt have a RE mania due to foreigners. I could throw in Japanese, Korean, some British and some French I met as well.

As far as getting a highly paid job in Silicon Valley.. Good luck on that.. They have always been pretty hard on hiring US University Grads only... and mainly from local universitiies..and US Companies which can be verified.
SJ State/Hayward/Chico/Fresno, Santa Clara Univ. and from UCD/UCB... forget about foreign universities or employers, cant get verification on degree or job history!

So prior waves of immagration has no impact on prices.

thomas.wong1986 says

dunnross says
As far as I know, very few immigrants can learn English that fast, and beat out API scores of native-born English speakers.

I can certainly recall how this young vietnamese kid.. couldnt speak a word of proper english passed the CPA exam back in the day ... perfect score in College and the CPA exam. Didnt make it to the Big 8.. went to work for the IRS.

memorization techniques.. infact ..AICPA freaked out by the mid 90s so many were passing the exam, but learned nothing, so they started to change content, and added written essay and simulations. In fact you have to sign a non-disclosure agreement regarding the exam questions. Passing rates last I saw was around 30-40%. For the BAR exam its 80%.

B.A.C.A.H. says

Maybe not propping up forever, but just as long as more of them keep comin', and keep bringing their API-centric attitude with them

Self fulfilling-feeding Ponzi scheeme. LOL! Someone is gonna go belly up.

thomas.wong1986 says

B.A.C.A.H. says

Maybe not propping up forever, but just as long as more of them keep comin', and keep bringing their API-centric attitude with them

Self fulfilling-feeding Ponzi scheeme. LOL! Someone is gonna go belly up.

Thomas-you seem to be applying macro theories to a micro environment. I know nothing about Cupertino. But I do know that some areas of the US will rise faster than inflation, and some areas will rise slower (or decline).

Take Detroit, for example. Home prices there have most certainly lagged inflation over the last 20 years. My guess is by a lot. So that means prices somewhere else have probably beaten inflation. As (wealthy) people have moved around, prices in individual cities have deviated from the long term trend because demand has increased/decreased with the movements of people.

Just because some of the BA has increased faster than inflation doesn't necessarily mean it is overpriced.

RentingForHalfTheCost says

You got 100K saved from stocks/options/RSUs and double income then you will qualify for a 1million home.

What? The percentage of lenders who would give you a 10% down jumbo loan on a $1 million home is about 0.0000000000000000001%.

This isn't 2006. Your scenario seems highly unlikely, and unrealistic.

Here are some realistic numbers for today's credit market:

At 25% down, for a $750,000 mortgage, 1% tax rate, $300 HOA, and $1200 in insurance, and a pristine 30 year jumbo rate of 4.25% you're PITI would be around $5,000 a month.

Required income: $212,000

The person with $250,000 in liquid cash, who could afford a $5000(PITI) is loaded, plain and simple.

Honestly Goran, that describes a LOT of DINK couples in the SV. A 212k+ gross household income is fairly common (with respect to the number of properties that become available in a place like Cupertino) here. The real test is saving $250k, which I don't think too many can do, but there are probably enough to soak up Cupertino properties. Now, anyone wise enough to save that much cash (one would hope) would see that it is a lame value proposition. Buuuut, something about having kids makes people think that it is OK to toss common sense out the window if it is "good for the children." Darn near everything we do is driven by our reproductive urge, and housing is indelibly intertwined with that, making it very easy to convince people to make poor decisions by exploiting their fears about raising happy, successful children. Lots of DINKs plan on having kids in the near future, and realtors know damn well how to exploit all of the related unknowns that DINKs face there.

bmwman91 says

Darn near everything we do is driven by our reproductive urge, and housing is indelibly intertwined with that, making it very easy to convince people to make poor decisions by exploiting their fears about raising happy, successful children.

Isn't that the truth.

I had a realtor tell me that my child will have better memories by buying in a particular Orange County neighborhood.

Almost gag inducing.

bmwman91 says

Honestly Goran, that describes a LOT of DINK couples in the SV. A 212k+ gross household income is fairly common (with respect to the number of properties that become available in a place like Cupertino) here. The real test is saving $250k, which I don't think too many can do, but there are probably enough to soak up Cupertino properties. Now, anyone wise enough to save that much cash (one would hope) would see that it is a lame value proposition. Buuuut, something about having kids makes people think that it is OK to toss common sense out the window if it is "good for the children."

I think you made the exact right point. Fear sells better than anything else.

Couples that have worked for around 4years can save up that much taking into account sign-on packages. Many also take loans from their own 401ks for the downpayment. If you max out 401k, the company match can be worth close to 30K for each person over 4 years.

Many also use FHA loans and dont need high downpayment.

Most of this is about irrational emotion based decision making at this point. Not so much about getting rich by flipping. Also we have to remember that the vast majority of tech immigrants are chinese/indians. In their home countries, the only hedge against inflation was housing and if you didnt buy in 10-12 years ago the prices are way too high now. So there is some of that conditioning at play here as well atleast in those buyers.

Goran_K says

RentingForHalfTheCost says

You got 100K saved from stocks/options/RSUs and double income then you will qualify for a 1million home.

What? The percentage of lenders who would give you a 10% down jumbo loan on a $1 million home is about 0.0000000000000000001%.

This isn't 2006. Your scenario seems highly unlikely, and unrealistic.

Perfect credit, long-standing bank relationship and the proper appraisal and they will. For the sake of argument, however, move it up to 20-25% dp then. Just means the couple needs to have more savings, probably from an equity sale or bank of parents. Seen all types and classes.

Don't get me wrong, I don't think it is smart, but when your playing with family money you haven't really earned yourself it seems okay to most. I earned every friggin dollar in my savings, and under no terms is anyone getting a red cent for free from me. I'll fight you until my last dying breath to protect my own savings. Not everyone feels the same, because as they say YMMV.

I think that's great, and I'm glad you're a big saver.

Back to the topic though, no one is going to mortgage a Cupertino home with 10% down, and pretending they have money. They have to have money, and lots of it in this credit environment whether it's from parents, siblings, or IPO stock.

Goran_K says

I think that's great, and I'm glad you're a big saver.

Back to the topic though, no one is going to mortgage a Cupertino home with 10% down, and pretending they have money. They have to have money, and lots of it in this credit environment whether it's from parents, siblings, or IPO stock.

Then these brokers are talking out of their asses I guess.

http://sf-re.com/WordPress/2011/05/11/jumboloans90ltv/

More documentation on 10% down up to 1.1million jumbo loan options. I know a few couples that have done this recently in places such as San Mateo, Menlo Park, San Francisco, etc. Without this almost criminal program they would still be renting.

http://www.ijumboloan.com/articles/can-i-get-a-jumbo-loan-with-10-percent-down.htm

About the 10% dp, you are making the point that Goran and I have been trying to make: of course people like that are loaded.

Because, if it takes a high household income to pay interest (and taxes) on a 20% loan at Cupertino prices, it takes an even higher one to pay interest (and taxes) on a 90% loan at Cupertino prices.

So, like I said; like you related in your post, those (mainly immigrant) buyers in Cupertino are quite affluent by any standard of what is normal in the USA, in California and even in the Bay Area.

If, it's a lot of smoke and mirrors or an unstable income that they cannot sustain, (hopefully not) after they drain the other wealth in their retirement accounts or from rich family "back home", they will just sell (probably at higher prices) to the next ones who come along who can afford it.

RentingForHalfTheCost says

ertino prices, it takes an even higher one to pay interest (and taxes) on a 90% loan at Cupertino prices.

So, like I said; like you related in your post, those (mainly immigrant) buyers in Cupertino are quite affluent by any standard of what is normal in the USA, in California and even in the Bay Area.

If, it's a lot of smoke and mirrors or an unstable income that they cannot sustain, (hopefully not) after they drain the other wealth in their retirement accounts or from rich family "back home", they will just sell (probably at higher prices) to the next ones who come along who can afford it.

From your own link that you posted:

"Before you can get an approval for a jumbo loan you must have satisfied the following requirements:

» Making a minimum down payment of 20 percent of the loan you are seeking.

» A full record of your income for the last 2 years

» Your monthly mortgage payments will be 38 percent of your income before taxes.

» Your Credit Score needs to be above 720 (some lenders will allow 680)"

Someone has to have $200,000 in liquid cash, and prove for 2 years in income statements that they can afford an $800,000 mortgage.

That's what you call wealthy.

Also from your other link:

Minimum FICO score of 760. No exceptions.
10% down must be borrower’s own money, gift funds allowed to supplement this 10% downpayment (for closing costs, etc).
5/1 ARM, 7/1 ARM, and 10/1 ARM periods available; all based on LIBOR. No 30 year fixed available for this loan.
Mortgage insurance required.

No 30 year fixed, has to be a 10/1 ARM. You know what kind of income you need to qualify for that especially on a $1 million house?

B.A.C.A.H. says

Because it's their kids who are the students. Kids like Harvard alum Jeremy Lin. Dunross, it sounds like you don't spend much time in local public K-12.

I bet the teachers at these schools are letting the chineese students cheat on the english standardized tests, just to prop up the API for their school.

We are single income family with 200K savings with 7 and 4 year old kids. We are in big dilema whether to go for a house or not. Rents here are insane (2500 for 2 bed/2bath). What do you guys suggest? Should we go for a house so that kids can have a bigger place or continue in the apartment?

Excuse me?

2500/mo is an insane rent amount?

How on earth do you save $200K, but you consider $2500/mo an "insane rent amount"?

I would take a stab at the notion that $2500/mo rent is fairly standard for a family of four with a household income of around $100K....and it might take 15-20 years for the same family to save $200K.

dodgerfanjohn says

would take a stab at the notion that $2500/mo rent is fairly standard for a family of four with a household income of around $100K....

You don't work very hard for your $$$ then.

meetyaks says

We are single income family with 200K savings with 7 and 4 year old kids. We are in big dilema whether to go for a house or not. Rents here are insane (2500 for 2 bed/2bath). What do you guys suggest? Should we go for a house so that kids can have a bigger place or continue in the apartment?

You are going to need at minimum ten thousand square feet and at least four bathrooms or four and half bathrooms with all them kids as they grow. I can probably find you something close to that out here whereabouts I am. Wouldn't be 2500 dollars a month! cheaper

meetyaks says

We are single income family with 200K savings with 7 and 4 year old kids. We are in big dilema whether to go for a house or not. Rents here are insane (2500 for 2 bed/2bath). What do you guys suggest? Should we go for a house so that kids can have a bigger place or continue in the apartment?

Are you looking to buy in Cupertino? $200,000 is a good down payment, but what type of home are you looking to get? Your standard 3/2 cost about $850,000 to $950,000 in Cupertino. That would give you a mortgage of at least $650,000. Based on that, I think renting would be best for you if you need to live in Cupertino.

JodyChunder says

dodgerfanjohn says

would take a stab at the notion that $2500/mo rent is fairly standard for a family of four with a household income of around $100K....

You don't work very hard for your $$$ then.

Exactly the opposite. You either rent money or rent a house. Right now, $2500/mth is the cheapest way to provide shelter. Renting 600K and risking your 200K in this environment means you are feeling lucky IMHO. Luck has run out for many around here, so I'd be hesitant to join the fray. If you doubt the strength of the housing market, then renting is the obvious choice. Shit, rent a nice McMansion for 4k/mth and enjoy the backyard pool as well. They will even throw in yard and pool maintenance many time. You got a problem, call the landlord from the hot tub and complain. You won't even have to put down your Mai Tai. ;)

Goran_K says

meetyaks says

We are single income family with 200K savings with 7 and 4 year old kids. We are in big dilema whether to go for a house or not. Rents here are insane (2500 for 2 bed/2bath). What do you guys suggest? Should we go for a house so that kids can have a bigger place or continue in the apartment?

Are you looking to buy in Cupertino? $200,000 is a good down payment, but what type of home are you looking to get? Your standard 3/2 cost about $850,000 to $950,000 in Cupertino. That would give you a mortgage of at least $650,000. Based on that, I think renting would be best for you if you need to live in Cupertino.

Thanks guys for your suggestions. Cupertino is an option (because of schools). Other option we are considering is San ramon which adds 30min of commute each way.

Goran_K says

Are you looking to buy in Cupertino? $200,000 is a good down payment, but what type of home are you looking to get? Your standard 3/2 cost about $850,000 to $950,000 in Cupertino. That would give you a mortgage of at least $650,000. Based on that, I think renting would be best for you if you need to live in Cupertino.

This is a great site, I'm damn glad my brother put me onto it. I'm in a similar position as "meetyaks". Need to find a home for me and my family (wife plus three small kids) somewhere in silicon valley. New job is in Cupertino. Looking for properties further out which means a potentially long commute. Moving from Texas and I realize going from here to there is not the normal pattern. And I also realize we will take a big hit in size of property compared to what we have now. Looks like inventories are relatively low which means poorer selection which equals unhappy wife. Currently trying to scrape together ~200k cash to allow purchase of ~$1,000,000 property with a 30 year fixed. At the same time I'm considering rental properties but honestly I don't see a whole lot on the market there either, maybe I'm looking in the wrong places. What rental property sites are good for that area? The rent vs. buy question is a hotly debated topic especially for silicon valley. At this moment in space-time, right..........NOW, where do you guys stand on rent/buy?

dunnross says

I bet the teachers at these schools are letting the chineese students cheat on the english standardized tests, just to prop up the API for their school.

API is a "grading" of the school, not the students. So, there's only an indirect benefit to the students to do well on that assessment. I doubt that all those students would jeopardize admission to an Ivy or elite UC campus to inflate the API of their teachers and administrators. Too little reward for the risk.

jynnyrttn,

You are not going to like it here. You are accustomed to Living Large in Texas. In order to Live Large here, unless you are swimming in money you will commute so far that your quality of life will suck.

Consider keeping your family in Texas and continue looking for a job in Texas while for the time being you earn your paycheck here .

B.A.C.A.H. says

jynnyrttn,

You are not going to like it here. You are accustomed to Living Large in Texas. In order to Live Large here, unless you are swimming in money you will commute so far that your quality of life will suck.

Consider keeping your family in Texas and continue looking for a job in Texas while for the time being you earn your paycheck here .

You're not with the tourism board are you?

meetyaks says

Thanks guys for your suggestions. Cupertino is an option (because of schools). Other option we are considering is San ramon which adds 30min of commute each way.

Go east of Cupertino, at this point even Los Gatos may have deals better than Cupertino.. commute via Highway 9..
I will warn you the peace of mind... will kill you...

It may surpise you the commute, Stevens Creek, to Cupertino from DT SJ isnt bad either. So SJ maybe an option...

B.A.C.A.H. says

Consider keeping your family in Texas and continue looking for a job in Texas while for the time being you earn your paycheck here .

Is this Texas Big ? 3x bigger than Cupertino...

http://www.redfin.com/CA/San-Jose/2118-Shiangzone-Ct-95121/home/972348

http://www.redfin.com/CA/San-Jose/1603-Rangewood-Pl-95138/home/700132

jynny,

I am a lifelong Bay Arean, it is the only place I have lived and it will take a lot for me to leave.

But most of my relatives live in your part of the USA. I stay in touch with them and I have spent a lot of time with them, visiting them, and sometimes they have come here to visit me. That's the personal part. On the professional part, for a long time I worked in an outfit that had half its operations in Texas, half in "Silicon Valley". I got to know the Texas people really well. Went to their facility several times over the years and got the "relocation sales pitch" from their management, who included among them former Californians who relocated there to savor the good life of Living Large in Texas.

So I think I am as well-versed in "the other side" as a lifelong Bay Arean could be.

I am telling you, you will not like it here.

Hey I appreciate the opinion.

jnnyrttn,

It's a losing battle trying to live directly in Cupertino. You're competing with so much foreign money, it's ridiculous.

As others have said, if you can stand a 30-40 minute commute, you'll get much more house, and less stress about space and mortgage payments. You might even find a carpool for cheap.

Goran_K says

jnnyrttn,

It's a losing battle trying to live directly in Cupertino. You're competing with so much foreign money, it's ridiculous.

how much is a ridiculous amount of foreign money? how do you quantify the amount? anecdotal stories?

Goran_K says

As others have said, if you can stand a 30-40 minute commute

You might even get a chance to listen to your CD collection..

thomas.wong1986 says

Goran_K says

As others have said, if you can stand a 30-40 minute commute

You might even get a chance to listen to your CD collection..

Or catch up on phone calls (if you have a good blue tooth headset).

jnnyrttn says

NOW, where do you guys stand on rent/buy?

Rent. Especially when you're just moving here and getting settled. Colleagues who work with me in San Francisco moved here and rented in places like Burlingame and San Mateo for a year or two before buying places in the same areas. They seem happy with it and purchase prices will go down while you're renting.