8 ms·

Almost none of the people currently living in SF will get to see their grandkids. Statistics tell us the vast majority of their children will be forced to move

Almost none of the people currently living in SF will get to see their grandkids. Statistics tell us the vast majority of their children will be forced to move away; even if you have a good career ahead of you and in theory would be able to afford to buy in the bay area, that's typically later in your career. Are you really going to live with your parents after you've been married for a year and have two kids? (Yes I know some people will but the vast majority won't).

buckbova 11y ago
Move to Hayward or other. Build your earning power and your assets. Buy a smaller house/condo in the skirts. Fix it up a little through sweat equity. Sell and move to a larger condo/home. Rinse/repeat until you make it where you want to. I couldn't buy in my folks' neighborhood for over a decade out of college. Now I can, but don't choose to. Seems like entitled thinking to assume you can live where your parents worked their collective lives to attain.
- shostack 11y ago
  You make the assumption that most people have the free time, know-how and physical strength to do this. Most people don't, so rely on hiring contractors (expensive), and waiting on prices to go up with their earning power to be able to put down a larger down payment and upgrade that way. Although I never quite got how that works because if the market goes up and you sell, well, prices are higher than when you originally bought, so minus taxes, odds are you might not come out ahead unless you've bought in at the right time or went through several cycles.
  - buckbova 11y ago
    I'm not suggesting flipping a house. Nearly everyone can scrape, clean and paint. Most can install something like laminate flooring, engineered wood, and even tile. Honestly it's more about effort than know-how. When it comes to electrical and plumbing, unless you have the skills and tools, hire someone. Plus it feels good to do stuff with your hands now and again. Obviously if your time is worth more money than what you'd pay a contractor, then get a contractor. This whole thing works because of building equity. Simple example is if you buy a 400k place and in 3-7 years have 150k equity through appreciation and mortgage payments, you can upgrade and with 20% down buy a 750K place. From my experience there's only been a few downturns in my lifetime that more time did not wash away. And it's not so much taxes as it is other fees with housing. I always wished I'd bought sooner or upgraded sooner than I have. But I get comfortable.
    - shostack 11y ago
      Your market assumption is that the place appreciates at a rate where you have that much equity. But if the market appreciates at that rate, aren't homes that are now $750k comparable to the homes that were once $400k? Or am I missing something there in how that works?
ggggtez 11y ago
Are you suggesting renting doesn't exist?
taurath 11y ago
This pretty much matches my experience with friends who now in their 20s grew up in the bay. Most are in Seattle, Sacramento, Portland, or other more affordable places. The ones who couldn't/didn't finish college or get into tech live elsewhere. I have a friend who is coming up on 28, having just moved from his parents house in Los Gatos a year ago. He moved into the slums with 3 roommates, paying around 60% of what his parents pay for their mortgage for his share of rent. He managed to find a job in tech which is how he can afford the place. Basically you move out of a mansion and into a ghetto, stay under your parents, or move away. I'm up in Seattle desperately trying to save money for a down payment faster than housing prices are going up - if I wait a year it'll be an extra 30-50k for the same property. But if I overextend to try to buy a place and the market crashes I'm completely SOL. Its very difficult to make any long-term decisions or enter the housing market. But still, if you're not in it, you're giving up a lot of your future buying power. Friends of mine managed to buy a very very cheap place in the bay and lived there for a few years, and used the equity to buy a much nicer place in the Seattle area. No idea really what to do - I feel like the market is totally capping out at some point and isn't sustainable - I have to place a bet whether it will rise continuously or crash and if I get it wrong I'm up shit creek.
- shostack 11y ago
  This is part of the problem though--because the housing market takes such huge swings, people can't plan for their future. Do you take the gamble that you'll be able to save up and buy a home somewhat near employment one day if the market comes down? Or do you just live your life with the assumption of never buying, and if luck strikes and prices plummet, buy then?
- jseliger 11y ago
  I'm up in Seattle desperately trying to save money for a down payment faster than housing prices are going up - if I wait a year it'll be an extra 30-50k for the same property. But if I overextend to try to buy a place and the market crashes I'm completely SOL. Its very difficult to make any long-term decisions or enter the housing market. This is why so many people move to Texas: http://ideas.time.com/2013/10/17/10-reasons-texas-is-our-future/ http://ideas.time.com/2013/10/17/10-reasons-texas-is-our-fut.... Most years, three to six of the fastest growing counties are in Texas. Texas's biggest cities have relatively free land-use laws, so that as demand rises new housing gets built and, in city centers, denser housing gets built. This dynamic has been going on for a while: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-of-two-town-houses/306334/ http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o...: In 2000, my husband and I moved out of our mid-1970s three-bedroom town house in Los Angeles and into a brand-new three-bedroom town house in Uptown Dallas. At the time, the two were worth about the same, but the Dallas place was 1,000 square feet bigger. We’ve moved back to L.A., and we’re glad we kept our old house. Over the past seven years, its value has roughly doubled. By contrast, we sold our Dallas place for $6,500 less than we paid for it. It’s not that we bought into a declining Dallas neighborhood: Uptown is one of the hottest in the city, with block upon block of new construction. But the supply of housing in Dallas is elastic. When demand increases, because of growing population or rising incomes, so does the amount of housing; prices stay roughly the same. That’s true not only in the outlying suburbs, but also in old neighborhoods like ours, where dense clusters of town houses and multistory apartment buildings are replacing two-story fourplexes and single-family homes. It’s easy to build new housing in Dallas. Not so in Los Angeles. There, in-creased demand generates little new supply. Even within zoning rules, it’s hard to get permission to build. When a local developer bought three small 1920s duplexes on our block, planning to replace them with a big condo building, neighbors campaigned to stop the project. The city declared the charming but architecturally undistinguished buildings historic landmarks, blocking demolition for a year. The developer gave up, leaving the neighborhood’s landscape—and its housing supply—unchanged. In Los Angeles, when demand for housing increases, prices rise. Seattle has been better about expanding housing supply than most of CA, but it's not nearly as good as Texas cities.

buckbova 11y ago

Move to Hayward or other. Build your earning power and your assets. Buy a smaller house/condo in the skirts. Fix it up a little through sweat equity. Sell and move to a larger condo/home. Rinse/repeat until you make it where you want to. I couldn't buy in my folks' neighborhood for over a decade out of college. Now I can, but don't choose to. Seems like entitled thinking to assume you can live where your parents worked their collective lives to attain.

shostack 11y ago
You make the assumption that most people have the free time, know-how and physical strength to do this. Most people don't, so rely on hiring contractors (expensive), and waiting on prices to go up with their earning power to be able to put down a larger down payment and upgrade that way. Although I never quite got how that works because if the market goes up and you sell, well, prices are higher than when you originally bought, so minus taxes, odds are you might not come out ahead unless you've bought in at the right time or went through several cycles.
- buckbova 11y ago
  I'm not suggesting flipping a house. Nearly everyone can scrape, clean and paint. Most can install something like laminate flooring, engineered wood, and even tile. Honestly it's more about effort than know-how. When it comes to electrical and plumbing, unless you have the skills and tools, hire someone. Plus it feels good to do stuff with your hands now and again. Obviously if your time is worth more money than what you'd pay a contractor, then get a contractor. This whole thing works because of building equity. Simple example is if you buy a 400k place and in 3-7 years have 150k equity through appreciation and mortgage payments, you can upgrade and with 20% down buy a 750K place. From my experience there's only been a few downturns in my lifetime that more time did not wash away. And it's not so much taxes as it is other fees with housing. I always wished I'd bought sooner or upgraded sooner than I have. But I get comfortable.
  - shostack 11y ago
    Your market assumption is that the place appreciates at a rate where you have that much equity. But if the market appreciates at that rate, aren't homes that are now $750k comparable to the homes that were once $400k? Or am I missing something there in how that works?

ggggtez 11y ago

Are you suggesting renting doesn't exist?

taurath 11y ago

This pretty much matches my experience with friends who now in their 20s grew up in the bay. Most are in Seattle, Sacramento, Portland, or other more affordable places. The ones who couldn't/didn't finish college or get into tech live elsewhere. I have a friend who is coming up on 28, having just moved from his parents house in Los Gatos a year ago. He moved into the slums with 3 roommates, paying around 60% of what his parents pay for their mortgage for his share of rent. He managed to find a job in tech which is how he can afford the place. Basically you move out of a mansion and into a ghetto, stay under your parents, or move away. I'm up in Seattle desperately trying to save money for a down payment faster than housing prices are going up - if I wait a year it'll be an extra 30-50k for the same property. But if I overextend to try to buy a place and the market crashes I'm completely SOL. Its very difficult to make any long-term decisions or enter the housing market. But still, if you're not in it, you're giving up a lot of your future buying power. Friends of mine managed to buy a very very cheap place in the bay and lived there for a few years, and used the equity to buy a much nicer place in the Seattle area. No idea really what to do - I feel like the market is totally capping out at some point and isn't sustainable - I have to place a bet whether it will rise continuously or crash and if I get it wrong I'm up shit creek.

shostack 11y ago
This is part of the problem though--because the housing market takes such huge swings, people can't plan for their future. Do you take the gamble that you'll be able to save up and buy a home somewhat near employment one day if the market comes down? Or do you just live your life with the assumption of never buying, and if luck strikes and prices plummet, buy then?
jseliger 11y ago
I'm up in Seattle desperately trying to save money for a down payment faster than housing prices are going up - if I wait a year it'll be an extra 30-50k for the same property. But if I overextend to try to buy a place and the market crashes I'm completely SOL. Its very difficult to make any long-term decisions or enter the housing market. This is why so many people move to Texas: http://ideas.time.com/2013/10/17/10-reasons-texas-is-our-future/ http://ideas.time.com/2013/10/17/10-reasons-texas-is-our-fut.... Most years, three to six of the fastest growing counties are in Texas. Texas's biggest cities have relatively free land-use laws, so that as demand rises new housing gets built and, in city centers, denser housing gets built. This dynamic has been going on for a while: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-of-two-town-houses/306334/ http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o...: In 2000, my husband and I moved out of our mid-1970s three-bedroom town house in Los Angeles and into a brand-new three-bedroom town house in Uptown Dallas. At the time, the two were worth about the same, but the Dallas place was 1,000 square feet bigger. We’ve moved back to L.A., and we’re glad we kept our old house. Over the past seven years, its value has roughly doubled. By contrast, we sold our Dallas place for $6,500 less than we paid for it. It’s not that we bought into a declining Dallas neighborhood: Uptown is one of the hottest in the city, with block upon block of new construction. But the supply of housing in Dallas is elastic. When demand increases, because of growing population or rising incomes, so does the amount of housing; prices stay roughly the same. That’s true not only in the outlying suburbs, but also in old neighborhoods like ours, where dense clusters of town houses and multistory apartment buildings are replacing two-story fourplexes and single-family homes. It’s easy to build new housing in Dallas. Not so in Los Angeles. There, in-creased demand generates little new supply. Even within zoning rules, it’s hard to get permission to build. When a local developer bought three small 1920s duplexes on our block, planning to replace them with a big condo building, neighbors campaigned to stop the project. The city declared the charming but architecturally undistinguished buildings historic landmarks, blocking demolition for a year. The developer gave up, leaving the neighborhood’s landscape—and its housing supply—unchanged. In Los Angeles, when demand for housing increases, prices rise. Seattle has been better about expanding housing supply than most of CA, but it's not nearly as good as Texas cities.