patrick.net

lostand confused says

Yup that is a suburb. Not Mumbai proper.

Then why are we comparing prices to Santa Clara? Is Santa Clara considered a Financial Capital of the country, now?

dunnross says

lostand confused says

Yup that is a suburb. Not Mumbai proper.

Then why are we comparing prices to Santa Clara? Is Santa Clara considered a Financial Capital of the country, now?

You were the one who mentioned Mumbai.

I guess San Francisco has been overpriced since the gold rush. I never understood what is so great about the area. Please bay people, don't get defensive, but instead tell me why you are willing to pay 3 plus times more to live there. I've visited pier 39, golden gate bridge, alcatraz, coit tower, dined at Earnies. Those places are nice and maybe with the weather and somewhat higher salaries a 20% price premium might be appropriate. When I think about people paying those prices, I just can't believe it.

Zakra,
You cannot beat the Yayyyyy area. Scenery, 4 seasons(none extreme), things to do, people, diversity, schools, universities, jobs......

Back to the townhome for sale. Who has all this money to buy these townhomes, Cash? Is the younger generation doomed to rent overpriced apartments in this area?

The house i listed is in the arm-pit of Santa Clara. It is next to the Amtrak rail line, "on the other side of town"

Zakrajshek says

I guess San Francisco has been overpriced since the gold rush. I never understood what is so great about the area. Please bay people, don't get defensive, but instead tell me why you are willing to pay 3 plus times more to live there. I've visited pier 39, golden gate bridge, alcatraz, coit tower, dined at Earnies. Those places are nice and maybe with the weather and somewhat higher salaries a 20% price premium might be appropriate. When I think about people paying those prices, I just can't believe it.

There is a bit more to it, in fact natives usually never hang out at Pier 39, it's fairly dirty and the food is sub-par. The climate is very stable and sunny but not hot, you can do everything form windsurfing/surfing to skiing/snowboarding fairly close by. It also has a really good diverse crowd of young(er) urban professionals and is suited to work hard and play harder without the hectic and stress of New York. And the food is diverse and superb. That being said, I agree that it is pretty overpriced and that's why I am renting close to the ocean but still in the city where you can small houses reasonable rents. I hardly participate in consumption (bike to work mostly) so I only pay too much for good food - and for my family ;) I would avoid buying a place in SF, there maybe OK deals though in other areas in the bay area which are less desirable.

It wasn't this overpriced. My colleague bought a house in 1999 in Fremont, CA -walking distance to BART and not a boxy McMansion, but a nice house with garden-for 330k+ . The economy was much better and so were the state finances.

Bigsby says

You were the one who mentioned Mumbai.

No I didn't. BACAH mentioned it, first. What I am saying is let's compare apples to apples here. If you compare Raunchy suburban Santa Clara to downtown Mumbai, then, it's not a fare comparison. Here is what I call a fare comparison:

Downtown Mumbai Luxury Appartment: $500/sq ft
Downtown San Francisco Luxury Appartment: $2000/sq ft

Raunchy Santa Clara: $500/sq ft
West Mumbai Suburbs: $75/sq ft

So, I still fail to see were foreigners from Mumbai find bargains in the Bay Area.

Bigsby says

Wouldn't that be more meaningful?

No, because, you were saying that these foreigners come here and think BA prices are a bargain. Affordability has nothing to do with it.

dunnross says

Bigsby says

Wouldn't that be more meaningful?

No, because, you were saying that these foreigners come here and think BA prices are a bargain. Affordability has nothing to do with it.

Er, no, I wasn't saying that.

Darrell In Phoenix says

Bigsby says

Why not compare affordability rather than actual sq ft prices? Wouldn't that be more meaningful?

Why would you want to avoid a price per unit measure my friend "Bigsby"?

Oh, I don't know. Maybe because when you're comparing prices in one city with those in another, and one of those cities has (apparently) a household income of $8000 and the other one has a household income more than 10 times that figure, then...

Darrell In Phoenix says

Why would you want to avoid a price per unit measure my friend "Bigsby"?

Because when you buy real estate you also buy freedom from landlords.

And that cost to win freedom for one's family depends on the local rent level, which has little to do with the sticks and bricks and everything to do with area incomes, vacancy factors, and supply of new & used home listings on the sales market.

Comparing price-to-rent ratios between different markets is a generally valid measure of how unaffordable housing is getting in a market, since interest rates and lending practices are generally uniform between markets.

(But comparing price-to-rent over time in a single market is deceptive, since falling interest rates reduce the actual cost of owning, and boy have interest rates been falling)

Darrell In Phoenix says

The bank is your landlord.

Funny thing is, banks never raise the rent. They actually lower it as the principal is paid down.

Plus Uncle Sam and the state kicks back a third or more of the bank's "rent".

Wish they did that for renters. Well actually I don't, since what would happen would be landlords would just take that too.

Meanwhile, on Planet Reality:

http://lansner.ocregister.com/2012/09/22/socal-rent-inflation-at-3-year-igh/166455/

Dunno about Denver or Chicago, nor do I care particularly

btw, your own damn link says:

A new TransUnion rental screening solutions
report found that the average rent for the
nation increased 4.4% from $829 in the first
quarter of 2011 to $865 in the first quarter
of 2012.

Learn to read, LOL

Bellingham Bill says

Because when you buy real estate you also buy freedom from landlords.

You go stDarrell In Phoenix says

The bank is your landlord.

And your boss is your landlord too.

But I never got my question answered as to why some people, here, think that Bay Area housing is a bargain for foreigners from places like Mumbai and Bangalore, where I just proved to you that prices in those areas are 5x cheaper than they are in the Bay Area.

Darrell In Phoenix says

Why pay an inflated price for a rapidly depreciating house when you can rent it for half the monthly amount?

Here's a non-shitty "Archstone"-quality complex in Sunnyvale:

http://www.windsorcommunities.com/apartments/san-francisco/missionpointe/floor-plans

The location is not so hot (wedged between two major freeways and among the worst quality of SFH housing in the entire south bay) but the quality of the development itself is decent enough.

going with $2500/mo for the two bed/bath place (the bare minimum for a family), we now need to find a $5000/mo house to see why we should buy and not rent.

Hmmm, twice that $2500/mo rent is $60,000 a year, and going with a 4% jumbo interest rate that would pay the interest costs on a $1.5M loan.

What can we buy for $1.5M?

Redfin reports ~50 homes in the $1.25M to $1.5M range in the entire south bay (!).

actually, they all sucked but I found this place:

http://www.redfin.com/CA/Santa-Clara/267-Saratoga-Ave-95050/home/1642740

listed for $840,000 that looks nice enough.

With 20% down, PITI less the P is $2400, about the cost of renting that semi non-shitty 2B apartment.

The average PITI less the P is ~$1900/mo over the 30 year life of the loan. I don't think that apartment will fall under $2000 again, but of course as a renter I'd be happy to be wrong about that.

And after the loan is paid off, the holding cost is $1000/mo.

What will the rent on that place be in 2042? If the past is any guide, $6000/mo (3% pa up).

dunnross says

where I just proved to you that prices in those areas are 5x cheaper than they are in the Bay Area

because the shittiest parts of the bay area are about as livable as the nicest parts of Mumbai and Bangalore?

*quality* supply is, I gather, constrained in India. I don't know anything but from talking about this with my Indian coworkers they were really gung-ho on buying here in the bay area, even in mid-2006.

dunnross says

But I never got my question answered as to why some people, here, think that Bay Area housing is a bargain for foreigners from places like Mumbai and Bangalore, where I just proved to you that prices in those areas are 5x cheaper than they are in the Bay Area.

And you also never retracted your comment that I was the one who said that.
I don't actually agree with the comment that people from India think BA housing is cheap, but there are plenty of people around the world who do think US housing as a whole is pretty damn affordable compared to what they are faced with at home.

dunnross says

But I never got my question answered as to why some people, here, think that Bay Area housing is a bargain for foreigners from places like Mumbai and Bangalore, where I just proved to you that prices in those areas are 5x cheaper than they are in the Bay Area.

I have a good number of friends from those cities in the BA, and none of them have ever told me that they thought it was a 'good deal'. Other than the guys with family estate homes outside of the city, though, they thought it was generally better than back home.

5x cheaper is misleading. An 'average' place in mumbai or bangalore is not an 'average' place in BA. You can live in the slums for a lot cheaper, sure, but living in the good parts of town will cost just as much as, if not more than, an acceptable place in BA.

Bigsby says

And you also never retracted your comment that I was the one who said that.
I don't actually agree with the comment that people from India think BA housing is cheap, but there are plenty of people around the world who do think US housing as a whole is pretty damn affordable compared to what they are faced with at home.

I do retract my comment. I was wrong there, it was someone else who made the statement. I don't think there are too many places around the world which are more expensive, but if there are, then those places must have much more opportunities to make money than Bay Area does. New York comes to mind, where a bank secretary gets a Mercedes D class as a Christmas bonus.

Bigsby says

who do think US housing as a whole is pretty damn affordable compared to what they are faced with at home.

and it is. The nordic socialist paradises (+ the Netherlands, they're the worst) have allowed themselves to bid up the price of housing something ridiculous.

The price level is set at whatever the banks will approve the mortgage for.

During the suicide lending boom of 2004-2007, that was pretty damn high, thanks to liar loans, outright mortgage broker fraud, and qualifying borrowers on teaser payments & negative am.

Kevin says

An 'average' place in mumbai or bangalore is not an 'average' place in BA.

I don't think there are too many places around the world where the quality of construction is as bad as it is in the Bay Area, either.

Bellingham Bill says

because the shittiest parts of the bay area are about as livable as the nicest parts of Mumbai and Bangalore?

Are you sure about that? At least they don't have homeless people sleeping on the streets like they do in San Francisco.

well, I was thinking more of East Palo Alto and N Sunnyvale, Alviso, etc.

SF is a great place to visit but no way in a million years would I want to live or work there.

Back in the 1970s I was growing up in El Cerrito (the crappy flats, alas). Those hills seemed to be a pretty stunning place to live, I'd consider moving to a nice view property there.

http://www.zillow.com/homedetails/88-Norwood-Ave-Kensington-CA-94707/18551825_zpid/

for $800,000 was just my taste, sigh.

Too bad it's all going to decompose into its constituent atomic particles in a couple of years, LOL.

dunnross says

I don't think there are too many places around the world which are more expensive, but if there are, then those places must have much more opportunities to make money than Bay Area does. New York comes to mind, where a bank secretary gets a Mercedes D class as a Christmas bonus.

Again, you aren't reading what I wrote. I didn't say the BA. I said US housing as a whole. Some areas of the US are pricey, but on average, housing is quite a bit cheaper than in a number of other developed nations.

dunnross says

Bellingham Bill says

because the shittiest parts of the bay area are about as livable as the nicest parts of Mumbai and Bangalore?

Are you sure about that? At least they don't have homeless people sleeping on the streets like they do in San Francisco.

There are millions of homeless in Mumbai.

Kevin says

There are millions of homeless in Mumbai.

Not true. There are actually very few homeless in Mumbai. Slums, yes, homeless, no.

dunnross says

Bellingham Bill says

because the shittiest parts of the bay area are about as livable as the nicest parts of Mumbai and Bangalore?

Are you sure about that? At least they don't have homeless people sleeping on the streets like they do in San Francisco.

That's a strange comment for someone who claims to have been to India to make.

Bigsby says

housing is quite a bit cheaper than in a number of other developed nations.

Yes, I would agree with that, but look how much land this country has. Most of land in this country is, and should be, almost free.

dunnross says

Kevin says

There are millions of homeless in Mumbai.

Not true. There are actually very few homeless in Mumbai. Slums, yes, homeless, no.

That's simply not true. There aren't millions sleeping rough, but there are a lot.

dunnross says

Bigsby says

housing is quite a bit cheaper than in a number of other developed nations.

Yes, I would agree with that, but look how much land this country has. Most of land in this country is, and should be, almost free.

People want to live in certain areas. There isn't so much available land to build on in those areas.

There are a lot of nice cities to live in the Yay outside of SF.
All of peninsula down to the South Bay. East Bay Hills, San Ramon, Pleasanton, Walnut Creek, Marin County.....

But the point is in our area, Santa Clara, Sunnyvale, Parts of San Jose and 20mile radius there seems to be a mad dash for anything on the market. Anything decent comes up, 3bed/2bath goes for cash, townhome, condo or house. What to do in this situation? It really seems as if a lot of Chinese investors are the ones buying. But that leaves people like us at the mercy of apartments complexes. My latest lease offer from the apartment complex wanted 3100monthly, 2500 on a 6month and 2300 on a 12month.

Bigsby says

That's simply not true. There aren't millions sleeping rough, but there are a lot.

I have traveled all over India, but I have not seen a single person in India, sleeping on the street, like you see in SF. In fact, I was told that their local police doesn't allow people to sleep on the street.

ZoabKhan says

There are a lot of nice cities to live in the Yay outside of SF.

All of peninsula down to the South Bay. East Bay Hills, San Ramon, Pleasanton, Walnut Creek, Marin County.....

But the point is in our area, Santa Clara, Sunnyvale, Parts of San Jose and 20mile radius there seems to be a mad dash for anything on the market. Anything decent comes up, 3bed/2bath goes for cash, townhome, condo or house. What to do in this situation? It really seems as if a lot of Chinese investors are the ones buying. But that leaves people like us at the mercy of apartments complexes. My latest lease offer from the apartment complex wanted 3100monthly, 2500 on a 6month and 2300 on a 12month.

2300 on a 12 month ain't that bad for what, a 2/3 bedroom? I'd go with that, 12 months is much less commitment than a lifetime.

dunnross says

Bigsby says

That's simply not true. There aren't millions sleeping rough, but there are a lot.

I have traveled all over India, but I have not seen a single person in India, sleeping on the street, like you see in SF. In fact, I was told that their local police doesn't allow people to sleep on the street.

I've travelled all over India as well and to say that people don't sleep rough is absolutely untrue.

Darrell In Phoenix says

Bigsby says

People want to live in certain areas. There isn't so much available land to build on in those areas.

lmao.

For someone who laughs a lot, you seem very angry.

dunnross says

Bellingham Bill says

because the shittiest parts of the bay area are about as livable as the nicest parts of Mumbai and Bangalore?

Are you sure about that? At least they don't have homeless people sleeping on the streets like they do in San Francisco.

I agree, things have changed but the myth that the US is the land of gold an honey still prevails and likely will for a while, even amongst Indian workers (!) But I know some who made frequent trips back and eventually stayed there, usually starting their own business or working for a flexible contracting (software) company. They said they didn't make as much as in the US but they were driving nicer cars, had better apartments/houses, maids, and were closer to their family. Go figure.

Just because there is land somewhere else doesn't make it a good place to live. People need employment, infrastructure, hospitals, and friends and family.

You can certainly take your $10,000 and buy acreage in the middle of nowhere, but then what are you going to do? Few people are independently wealthy.