patrick.net

Otherwise we will be the ones moving, eventually, once we know what's what with my husband's current job - at the minute we are kept here by the job (a biotech start-up). We like it here, but I don't think I could ever justify sinking 500,000 to 800,000 let alone 1.2m in a house, when you could buy one on the East Coast for a lot less and get a lot more.

BTW we were told to get a liar loan - interest only - if we wanted to buy a house here, we certainly couldn't get a house otherwise - I'm not that desperate or stupid. Let the landlord pay property tax and all the repair bills, that's what I say!

"The 97k number is from the HUD site. It makes sense too. If you look at the County’s “Low Income” programs, low income is defined as like $60k a year or something."

When I hear things like this, it makes me file like garbage. I worked for years making 30k. Even then I was able to save around 15k. I dreamed of the day I would make 45-50, even 60k. Now that I make that amount, it doesn't mean squat. Even a 100k salary simply means you have a little extra for new toys, like maybe a new Honda Civic and TV. whopee. All I can do now is hunker down and save-save-save for something I may not be able to ever afford. Great outlook and reason to work, right?

Claire,
You would think that many tech and development companies would move out of California. For 3 years running, California has made the list of one of the worst states to conduct business. This includes all sectors and industries. The reasoning comes from factors such as taxation, environmental regulations, power costs, and the high wages employees demand in order to live there. You would think that there would be this massive sucking sound off companies leaving the BA for other regions. They are, but if you look at the method they are doing it, it makes sense. Notice that a lot of those tech companies pay a lot of money to their employees? Well in reality, many of these firms like Cisco, Microsoft, Intel, and many others are and have been setting up satelite operations in other states while keeping their bases in their respective home states. There are tons of people now working for Cisco systems in Raleigh/Durahm. The number of flights from NYC to Raleigh went from 2 a day to 12 in 3 years. What's happening is that these companies are growing, but they're also growing in other states while slowly paring down their workforce in CA, WA, etc. SV has been losing around 1-3% of it's workforce since 2001. The people that are left are upper level management people, hence the higher wages and the more expenssive homes. Research, development, and engineering is increasingly being done in places like Boise, NC, TX, and GA. While nobody can claim there has been an exodus from the BA off tgech jobs, the companies that exsist here are in a very flexible situation. If things get nasty here, they are now set up in cheaper areas with younger talent and can simply do a track switching manuver. Pretty smart if you ask me. All I know is that many of my friends who stayed back home and went into tech careers are now suddenly finding a lot off work available where just 3 years ago there was nothing. That is very telling of the shift in economic fortunes that we could see within the country to new regions.

Glen (in a great post) Says:

> I prepared a spreadsheet comparing nominal median
> household income to nominal median home prices in
> California since 1984. The final column shows the annual
> multiple of household income to home price (eg: 4.5
> means a home costs 4.5x median annual income. As
> you can see from the data, prior to 2002 the multiple
> was never greater than 6 and averaged around 5.5.

You need to remember that almost half the people in the state do not own homes and most of the people that don't own homes don't make much money and can't afford a home. If you look at census track data over the last 50 years in areas where most people own homes the multiples are in the 3 to 4 range. Statewide data includes college students, people in housing projects and tons of real poor people packed in to crappy apartments that lower the average and median income increasing the multiple....

FAB:

I agree that the numbers are only suggestive, not dispositive, for the reasons you mentioned.

But at a certain point, there does need to be some correlation between incomes and housing prices. Of course, a median income family is not going to purchase a median income home (so the 10x multiple is a little misleading). But they may very well purchase a home at 6-7x their household income.

If I may make a rather blatant statement, I find it ironic that so many people in SF desperately want SF to be like a "mini-europe", with the only diffrence being the inconvenience of being attached the the "other" chunk of the country.
Well.. at least economically, SF has suceeded in that respects, making sure that their economic situation has much disparity as you'd find in any number of those old word economies. Bravo! Bravo!

Man am I feeling GOOD on a Friday! I hear Leslie Appleton-Young is doing a COMPLETE 180 on her "soft landing" statements! "We'll have to come up with something else" says Leslie.

Michael Anderson (what kind of car do you suppose she drives)?

Speaking of "repairs" my gutter is still dangling.

HARM: I'll have daughter #2's boy friend show me how to upload the pic's.

Damn I'm feelin' good on a Friday. Under three hours to go!

Dinor,
I'd LOVE to hear that. I've written to her repeatedly, for 2 years about this subject, and her company never got back to me, which isn't a surprise really, bbut to hear her say something I suggested 2 years ago would be rewarding.

New thread: New term to describe the housing bubble future

SHTF,

European home prices are not all that bad outside of London and Paris. SF's situation seems more like NYC.

Do chill out some. You're in a good situation in Alameda and you have the option of moving away if you want instant gratification. Life is really not that bad. As sucky as the situation seems to be now, at least I have all of the internet and Futurama reruns (and the prospect of new episodes in 2007) to play with. My dinners are not constantly threatening me with cholera and botulism. Plus airplanes (even if coach) and air conditioning. Just enjoy the good aspects of your life while waiting for other aspects to turn around. Don't let the bad part piss you off too much.

Astrid

WooHOO!! New Futurama episodes next year?

You've made my day :-)

I live in Cupertino; Earn 160K per year; Have 170K in Bank; Do not own a home ……

Which means everyone in the Bay Area does also, right? Your logic is amazing, clearly you deserve your meger salary.

Regarding Google, Google doesn't pay squat, sure if you are a Sr. Developer, but come on, they make money everywhere. Google stock options? Big deal, you only make money if they go up. Sure the pre ipo employess made money, but the brunt of Google is post ipo lackys. Google employees how many in the gold bricked BA? 4-5000? And what's the poplulation again? Move on, there is no rational justification for the housing cost, no matter what our resident idiot HaHa says.

speedingpullet,

My bad, it looks like the wait will be to 2008. Still, hopefully they can keep this run up for a couple more seasons.