patrick.net

Note that even though SF is cheaper than say London and Moscow, it may not catch up to those cities unless it becomes more "special."

Technology employment growth, even if sustained, is unlikely to make SF more expensive in relative terms. There may be a lot of start-up millionaires in the Silicon Valley, but they are really nothing compared to oil-kings and oligarchs.

If you buy a home for $X and expect a 5% return per year. After 10 years, how much do you need to sell it for? Think about the potential purchaser, how much will he need to make in order to afford your home? What does he look like? Does it make sense?

freak80 says

New renter says

* I want to be an OWNER - F@# renting

Translation: "I want to RENT MONEY from a bank, not rent a dwelling-place from a landlord!"

Word!

600k/ condo , vs renting..

2100 - hoa(300) - tax(6000/12) = 1300 month

1300/month is hardly breaks the standard deduction, will not if you are hitched.

Add in the 100-200/month that you need to spend on toys for the place.

Yeah, being "tiered" must be annoying.

The problem with high prices is the the huge tax bill. Even if you chip away at the mortgage-you have a ginormous tax bill that lasts for ever and ever.

SF is a "cultural center" relative to the rest of this part of CA, but it is a flat-out joke if you try to compare SF to any of the other major metros around the world. There is simply no comparison to be made between SF and Tokyo, Paris and Hong Kong. SF is a dull, dirty splatter of concrete and anyone that comes here from one of those places probably isn't impressed at all with it, other than the fact that the weather is consistently "blah." (and blah weather IS better than hot-and-humid-as-balls, which is found in a lot of other places). The SF'ites that go on & on about how special it is there have either never been anywhere else or need to share whatever it is that they are smoking.

I was in China/HK for work again a few weeks ago. I go there for work and vacation pretty often and I love it every time. My last night there was in a harbor-facing room in the Intercontinental and I watched a little bit of the dragon boat races the next morning. They have them in the SFBA too, and I was on a competitive Hawaiian Outrigger team for a few seasons. The stroke is the same, except these guys don't get to change sides!

HK Island. Please tell me SF compares somehow, I need a laugh. Going out at night is painfully easy there and there is always something good to do/eat/drink. I grabbed dinner at an English bar (not in LKF, just some thing along the harbor) where I had a very good BLT & beer, while listening to some Chinese bar band do the best covers of Skynyrd and Mark Knopfler that I have ever heard. There is plenty of just about every other culture there, too.

Anyway, SF is special compared to the surrounding suburbia so I'll give it that. People that insist that people from other parts of the world are all dying to get in there are on crack though. There are MUCH cooler places to live where the people as a whole have a lot more self respect. 75% of HK's population rides the subway daily...and I have never once seen names carved into anything, spray paint anywhere and there is almost no litter anywhere unless you get WAY out into the boonies.

"OK Mr. Complainy Pants, why don't you just move there if it is so great?"
I'm not a big-city type of guy. I want a detached garage/workshop and enough space that I can run a table saw at 3AM and not have to deal with irritated neighbors. Were I ever forced to live in a big city though, I'd take HK over NYC or SF.

Not a fan of Paris. But Cannes is lovely. Any city with a subway system is too large.

bmwman91 says

There are MUCH cooler places to live

Cooler? - In the winter maybe, but not in the summer.

B.A.C.A.H. says

bmwman91 says

There are MUCH cooler places to live

Cooler? - In the winter maybe, but not in the summer.

Eureka! I have found Eureka.

I have to agree with bmwman about HK and S.F. I've never been impressed with San Francisco except for it smelling like urine year round on Market Street. That's quite a feat.

Granted last time I was in Hong Kong was in 1996 on business as an analyst for Goldman Sachs. The skyline looked totally different than the pictures bmwman is posting. I remember walking around the city and thinking how I'd never see everything in the week I would be there.

Now I live in anti-septic Orange County, much less exciting, less congested, and less smelly. I kind of like it this way.

B.A.C.A.H. says

bmwman91 says

There are MUCH cooler places to live

Cooler? - In the winter maybe, but not in the summer.

Heyooooooo! Got me!

For some reason, most of my trips there are between June and August...HOT HOT HOT! Still, once the sun goes down, it kicks ass bar hopping in shorts, a tee shirt and sandals. You might get 3-4 weekends where you can do THAT in SF each year. Overall though, I suppose that cold & breezy is a little easier to deal with year-round than hot & humid.

Goran_K says

Granted last time I was in Hong Kong was in 1996 on business as an analyst for Goldman Sachs. The skyline looked totally different than the pictures bmwman is posting.

HK Island skyline at night.
The camera's field of view only really captures about 35% of it. The biggest/tallest building isn't even in the shots. There is a LOT of money there.

Anyway sorry to hijack the thread with my travel pics lol, although it is probably more fun than making fun of Foster City. Maybe I'll start a thread in the misc section with pics from various vacations. Even "the boonies" of HK have a skyline & amenities that make SF look like some small town. Having in-laws there kicks ass since I get access to the "real" HK that way.

Nice. That beats buying a Foster home.

Hong Kong weather is nothing to crow about and it is an island . S.F. isn't just S.f. A few hours drive from S.F you hit the Sierra Nevadas , the high desert, lakes, spectacular coastline, world class wineries and redwood groves. A few more hours and you hit a live volcano(Lassen Peak), volcanic caves(N.E CA) and of course the same distance down south and you hit L.A.
S.F itself has the Golden Gate bridge and it has character-unlike L.A.-which I agree is a concrete jungle. I love the varying terrain here, as well as the micro climates. Nothing like taking a romp down I280

Now I am no fan of the real estate prices-which are insane-especially after my employment journey through the midwest and looking at what you get for a 100/200k there.

But nothing to knock here and I have travelled all over the world.

I am also looking in Foster City and going through same frustration. You won't believe but market turnaround in just past 6 months. I honestly smell something fishy. I do not understand how come some many buyers with so much money suddenly flooded the market and it is not just Foster City, it is all over bay area and other states. Please be patient and do not make any emotional decision. Fundamentals for USA are not getting better and buying a costly house could be a financial suicide.

lostand confused says

Hong Kong weather is nothing to crow about and it is an island . S.F. isn't just S.f. A few hours drive from S.F you hit the Sierra Nevadas , the high desert, lakes, spectacular coastline, world class wineries and redwood groves. A few more hours and you hit a live volcano(Lassen Peak), volcanic caves(N.E CA) and of course the same distance down south and you hit L.A.
S.F itself has the Golden Gate bridge and it has character-unlike L.A.-which I agree is a concrete jungle. I love the varying terrain here, as well as the micro climates. Nothing like taking a romp down I280

Now I am no fan of the real estate prices-which are insane-especially after my employment journey through the midwest and looking at what you get for a 100/200k there.

But nothing to knock here and I have travelled all over the world.

I am 100% with you on this. If you are interested in actual, unique natural value rather than "the culture" then living in the SFBA kicks ass. You can go trail running after a 30 minute drive any day of the year, or you can make for the Sierras and spend the weekend climbing some of the best rock in the nation. Aside from having most of my family here, it is hard to plan to leave when I can get my outdoors fix any day of the year.

lostand confused says

S.F. isn't just S.f. A few hours drive from S.F you hit the Sierra Nevadas , the high desert, lakes, spectacular coastline, world class wineries and redwood groves.

Yep. And we can enjoy those things during our time off from our neighborhoods that the SF Hipsters sneer at.

B.A.C.A.H. says

Yep. And we can enjoy those things during our time off from our neighborhoods that the SF Hipsters sneer at.

SF is a city you can identify by smell alone. Why do they crave the scent of urine? Are they felines?

Might as well be, the aloofness and all.

I've never had issues with my rent getting raised outrageously.
Of course I've always rented duplexes or SFHs. those large apt complexes suck ass: they all smell like curry (no offense to Indians and I love Indian food, I just don't like to smell it where I live everyday) and will raise your rent whenever they get a chance.

Why do they crave the scent of urine?
That isn't urine you're smellin'
Human waste shuts down BART escalators

edvard2 says

So we bid around 40k over.

This sort of thing right here folks, is all you need to know.

B.A.C.A.H. says

Hipsters

Ha! What year is it?? You must be an old fart like me.

Have you ever lived in NYC? Central Park is nice but it's absolutely necessary for Manhatten. SF has the Marin Headlands just across the GGB and frankly Golden Gate Park is almost as nice.

NYC reeks of urine (mostly dog) during the summer due to the oppressive heat. That's actually mitigated in SF.

Sheesh, have you ever really lived in NYC or are you just pulling @$@@ out of your arse??

I still think "beautiful city" is an oxymoron.

JodyChunder says

So we bid around 40k over.

This sort of thing right here folks, is all you need to know.

Yes? Well its not all "You need to know" because for starters, the price was pretty low for the house and secondly, and as mentioned by myself several times, I rented for 17 years prior. In that time, and continuing on into today, we scrimped and saved. Drove and still drive 15+ year old beater cars with 200k+ on each, seldom eat out, don't buy fancy new gadgets, and invested heavily into retirement funds.

I see a lot of people complaining they have been saving for a year or something and then can't buy a house. We saved for 12+ years. All the while watching the housing bubble inflate and deflate. So what that we paid 40k over? We have the cash and the payments aren't a big deal because again- we saved.

If most people were to suck it up and save money for 10 years or so, they too would be in just fine condition.

some pennies of thoughs

- As OP makes it clear, and the edvard2 confirms above, the house price that you're willing to pay depends on your personal demand for it. OP's "months" of waiting are worth 25K, edvard2's "12+ years" = 40K. You can see how 40K can be much much smaller than 25K. Even though the asking price, as was mentioned correctly before, has nothing to do with market price, it is an important data point, because it is the number that is perceived by those searching for a house to be in relative vicinity of the correct price.

- There does appear a bit of mini-bubble going on just now, largely due to very limited inventory. I suspect part of it was (and maybe still is) driven by expectations of Facebook millions, some of which failed to materialize, causing sellers waiting to put the houses on the market to withhold till some other millions show up :)

- Now, multiple bids are taking place on both 400K and 4M houses. It is not clear yet whether we are witnessing the change in how price discovery and market will operate in Bay area from now on (intentionally low listing price to increase foot traffic and solicit multiple bids), or it is a temporary phenomenon. Just keep in mind that traded price is the only true market price.

freak80 says

Peter P says

Not saying house prices will go up, but SF prices are quite low compared to the rest of the world.

Maybe compared to London, Tokyo, Paris and other major cultural centers.

If so why were'nt prices sky high back in the 1970s, 80s 90s.. why NOW!

SFBA has been around for a very long time!

thomaswong.1986 says

freak80 says

Peter P says

Not saying house prices will go up, but SF prices are quite low compared to the rest of the world.

Maybe compared to London, Tokyo, Paris and other major cultural centers.

If so why were'nt prices sky high back in the 1970s, 80s 90s.. why NOW!

SFBA has been around for a very long time!

Very good point! If anything SF has just become smellier over time.

But then the bubble has little to do with affordability. The market will correct itself when the next financial crisis hit. Looking at continental Europe things aren't pretty.

Peter P says

Very good point! If anything SF has just become smellier over time.

But then the bubble has little to do with affordability. The market will correct itself when the next financial crisis hit. Looking at continental Europe things aren't pretty.

Hype.. thats the difference between then and now. You have very very good reasons that prices SHOULD have skyrocketed back decades ago the the nose bleed levels we saw .. industrial growth was double digit...

Now compare that today.. UGH! not any good reasons at all..

thomaswong.1986 says

why were'nt prices sky high back in the 1970s, 80s 90s.. why NOW!

SFBA has been around for a very long time!

Because those times were before the purchasing power of wealthy immigrants could muscle in here.

FriendlyJaffa says

- There does appear a bit of mini-bubble going on just now, largely due to very limited inventory. I suspect part of it was (and maybe still is) driven by expectations of Facebook millions, some of which failed to materialize, causing sellers waiting to put the houses on the market to withhold till some other millions show up :)

What was your expectations on the IPO.. it went out at 40 or so!

So were you expecting it to do what $400..$500...$600 per share!
even at 40 it was over 100 x next years earnings...

So how could anyone even justify 40 ? of course it was going to go down!

It is a liquidity bubble.

B.A.C.A.H. says

Because those times were before the purchasing power of wealthy immigrants could muscle in here.

wont be wealthy immigrants for long since they spent it...

and the $64M question.. wealth from what, where, when and how ?

unless they are from Columbia or Bolivia!

It was from money newly created by the global ZIRP.

DukeLaw says

Sheesh, have you ever really lived in NYC or are you just pulling @$@@ out of your arse??

I visit NY often enough, though not as much in the last five years with my hip dysplasia. I married a girl from Flatbush in '73. I know NY. San Francisco is not even in the running when compared to New York. Are you even form this planet>??

edvard2 says

Yes? Well its not all "You need to know" because for starters, the price was pretty low for the house

Ha. That is a quite the qualifier. Low for the house??? I think the idea that you of all people would overbid on a property is telltale. We are in recession as I type this. I have bought and sold many houses ed - but then, I have never been laid off from a job in my entire life and I am self employed. I also have over 700K in cash and easily that much in non-liquid. What you done is said, hey...I give up. Rape me.

You shoulda rented from me for another 17 years and retired a filthy rich man.

Peter P says

It was from money newly created by the global ZIRP.

Getting closer everyday to NIRP.

edvard2 says

I see a lot of people complaining they have been saving for a year or something and then can't buy a house. We saved for 12+ years. All the while watching the housing bubble inflate and deflate.

I came to Bay Area in 2001 and save for 6 years before I start looking for house. I almost bought a house in San Jose Cambrian area and I called it off because the house was not in my desire school district.

Then the housing market crashed and it was artificially jacked up First time home buyer credit. I waited for the credit to expired 2 times before I settle in Campbell. In other words, I save up for 9 1/2 years and the house hunting process is as long as 5 years.

It is funny to see people complaining about saving for 1 year and then crying that they are outbid by someone else.

JodyChunder says

Getting closer everyday to NIRP.

If you look at REAL interest rates, a.k.a interest rates minus inflation, we already have NIRP.