patrick.net

I think some people are probably *stuck* here, not everybody has the luxury to work where they want to live. Being expensive is one thing, being crappy and expensive is completely different.

I do complain about Bay Area quite a bit, esp. to my husband, bcos I am stuck here bcos of him as he can't find semiconductor job outside Bay Area easily. Western food is not as good as East Coast; public transportation sucks. Weather, overrated for me since I come from tropical country. Secondly, coming from a third world country and my dad was in construction business and built our houses there, it is hard not to compare the quality of the houses here and there. Most are probably annoyed by some's willingness to pay more for less. We can't do much about but at least rant to release the frustration!

SiO2 says

I wonder about the motivations of those who live in sfba but complain about how terrible and expensive it is. If there's something I don't like, I won't buy it. Especially if it's expensive. I am willing to pay for something I like, and I do like living in sfba. Tech jobs (check my handle), things that I like to do, and yes, the weather.

Obviously a lot of people also like it here, hence the prices.

robertoaribas says

If you buy homes that rent for more than the mortgage, then they go appreciating at more than inflation, you make a lot of money.

How much more than the mortgage payment does the rent payment need to be? 1% 5% 10% The interest rate%

A family member told me they were renting a house they own for $100 more than the mortgage. They were very happy with that because, as you say, they were covering the mortgage plus. I wonder how well that really works. I doubt this math is a thorough accounting notwithstanding considerations around the weight of ownership and the time spent thinking and being as a landlord.

robertoaribas says

we could get very high inflation someday.

We will. Because people like you think money should be created from doing nothing. On leverage.

Mick Russom says

robertoaribas says

we could get very high inflation someday.

We will. Because people like you think money should be created from doing nothing. On leverage.

If that happens property prices and rent will go down as people need to focus on the absolute essentials, i.e. food and energy. They probably will live with their family or have more and more roommates.

Mick Russom says

robertoaribas says

we could get very high inflation someday.

We will. Because people like you think money should be created from doing nothing. On leverage.

Money doesn't get created by leverage, it gets created by central banks. Leverage is a way to multiply your profits and losses, and no matter how deeply you leverage up on, say, a house, you personally are liable for any leveraged losses or reap any leveraged gains. No money is created or destroyed here.

When money _does_ get created, is in the same scenario, you leverage up on a house, and the price drops, and you walk away on the non-recourse loan, leaving a big loss on the bank's books. If the central bank comes in and prints money to offset the loss at that bank, that's where the money got created. Do this enough times, and you get massive bubbles and bursts, as printed money tries to offset destroyed money since the central bank exists only to benefit other banks.

The current series of QE1, QE2, TARP, Operation Twist and now QE Infinity exist only to keep banks solvent due to their reckless leveraging and risk taking, and the talk of inflation and employment targets is just paying lip service to people who don't understand how economics work.

sfba got many suckers. Imagine a guy putting $200K downpayment, then buying a home in Dublin for $800K. After that, commuting from dublin to Sunnyvale in company bus every day. I see such folks everyday.

Sure we on this board think that these guys are irrational. But they have different reasons: (a) schools for their kids so that these kids can achieve the american dream; (b) no need to worry about rent increases and other problems associated with renting; (c) in good company with fellow home owners, who provide the psychological support of being a home owner; (d) existence of the next set of fools to buy these properties held by the current rational home owners (or 'fools').

All these reasons hinge on the assumption of producing the next generation of fools. The next gen fools are created by $140K tech jobs and/or by their wives and kids.

myob says

No money is created or destroyed here.

At least not outside the minds of the leveraged. Inside the minds of the leveraged they're rich! Look at all those zeros!

mell says

If that happens

Oh it happens all the time and, in fact, is the norm.

Everybody sorta wants different things and have different criteria in their lives. I don't object commuting from Dublin, only if you work in big companies that provide buses, and you can't quite count on staying in one job forever, or having company bus would be one of criteria for next job. Until public transportation between east bay and the part is bridged, East bay remains less desirable, not to mention, lack of restaurants choices, far away from othe grociery stores if you want to shop beyond Safeway.

In US, credit is too cheap. Ones don't have to save substantially to buy a house. With lower threshold, $300k down for a 1.5M house, higher likelihood to have reckless buyers to drive up the prices. Not to mention those flushed with stock money.

I always wonder, how many think buying $1.xM house is okay, but spending regular $200 on a dinner for two, $200 sweater, or $10k 1-wk vacation is too expensive. Somehow, when it comes to house, people tend to forget the few extra 0s. Sure, leverage ...

raindoctor says

sfba got many suckers. Imagine a guy putting $200K downpayment, then buying a home in Dublin for $800K. After that, commuting from dublin to Sunnyvale in company bus every day. I see such folks everyday.

Sure we on this board think that these guys are irrational. But they have different reasons: (a) schools for their kids so that these kids can achieve the american dream; (b) no need to worry about rent increases and other problems associated with renting; (c) in good company with fellow home owners, who provide the psychological support of being a home owner; (d) existence of the next set of fools to buy these properties held by the current rational home owners (or 'fools').

All these reasons hinge on the assumption of producing the next generation of fools. The next gen fools are created by $140K tech jobs and/or by their wives and kids.