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>Because the Bay Area has the best job market in the world for software engineers, by a huge margin. A margin in what quantity exactly? I doubt that Bay Area

>Because the Bay Area has the best job market in the world for software engineers, by a huge margin. A margin in what quantity exactly? I doubt that Bay Area salaries are high enough to compensate for the insane housing costs.

twblalock 10y ago
Jobs. Tons of them, in many areas of software and hardware engineering. Plus, the network effects cannot be underestimated -- opportunities for career networking, meetups, conferences, etc. are enormous. After a few years here, you will have former coworkers at other tech companies who can help you advance in your career. If you lose your job, or your company fails, you won't have to move to find another job -- there will be plenty of other companies to work for. Taking a job at a startup is therefore not a huge risk. Buying a home here, and thereby tying yourself down to this area, is unlikely to hold you back in your career, as it might elsewhere -- you will probably never need to move in order to achieve advancement in your field. There is also the presence of venture capital. The VC world is very Silicon Valley-centric, although that might be changing. If you want funding, you'll have to come here for it. If you want to take advantage of your investors' professional networks to find other investors and build your team, you'll have to hire people who live here and don't want to leave. As a result of these network effects, many of the world's best software engineers choose to live here, and companies want to be here to hire them. There is now a saying in the startup world that you can start your company anywhere, but Silicon Valley is the best place to grow it, because the pool of engineering talent here is larger than it is anywhere else. Plus, this is a very nice place to live, if you can afford it. Despite some of the exaggerations many people are making in this thread, I know quite a few people who have purchased homes and condos in the past few years, including someone who bought one this week on a salary well under $200k -- without any help from his parents or anyone else. I think the highest price any of them paid was about $700k, which is well under some of the numbers people are quoting here. It's doable for a single person who has a high income, and it is easily doable for married couples who work in tech or are successful in other fields. The main barrier to ownership is the down payment, not the mortgage payments. Renting is also not as bad as people say it is, unless you live in downtown San Francisco. I pay less than $2k per month for a decent apartment in a very good location near a train station and major freeways, and I could spend less if I wanted to. My commute is quite pleasant. My rent probably sounds high to people from other cities, but on an average software engineer's salary, it is not burdensome in any way.
- someguydave 10y ago
  So to summarize: people are willing to pay higher rents and get lower salaries (relative to prices) for "career security" (instead of job security), nice weather, the amenity of living near people who fund startups, and the company of those who would choose the same.
  - twblalock 10y ago
    Those are very big advantages. Asking why software engineers would want to live in the Bay Area is like asking why investment bankers would want to live in New York City or London. There is just such a critical mass of activity and connections that one would miss out on anywhere else.
    - someguydave 10y ago
      Those "big advantages" also come at a steep cost - somewhere between $10-100k per year for a family compared to similar conditions available elsewhere.
phamilton 10y ago
Netflix $400k salaries, $350k total comp at Google or Facebook. Uber hires can get over $1M in RSUs in addition to a healthy salary. While you may not be able to afford housing, you can bank $100k/yr if you live frugally. I'm not sure where else in the US that's a possibility.
- someguydave 10y ago
  Glassdoor.com gives figures of less than half of those values for "senior software engineers". There are many cities in the US where you could comfortably live on $35k and get paid $135k as an engineer.
  - phamilton 10y ago
    Glassdoor reports salary and not full comp. Facebook and Google are a lot of stock-based comp. $150k salary at Google is often combined with $200k/year in Google RSUs for a senior engineer who has been there for 5 years. I find it amusing that every time I bring these numbers up, I get people telling me I'm wrong. I'm not making these up. There are people I know making those salaries. There have been countless people here who have talked about how they make that much. This isn't a secret. Living on $35k and making $135k doesn't mean you'll bank $100k/yr. Taxes cut into it. Living on $150k and making $350k does. And if you're smart you can live on $80k/yr in the bay area. I even know people living on $35k/yr out here. Not everyone gets the high paying Google job. Not everyone wants it. But it exists and it pays extremely well.
  - twblalock 10y ago
    And in those cities, your housing is a smaller percentage of your disposable income than it is in Silicon Valley, but everything else, e.g. cars, phones, laptops, furniture, food, is a larger percentage. You also neglect stock purchase plans and RSUs, which are the majority of many engineers' compensation. You could make $160k per year at Apple or Google and get $200k of stock every year as well.

twblalock 10y ago

Jobs. Tons of them, in many areas of software and hardware engineering. Plus, the network effects cannot be underestimated -- opportunities for career networking, meetups, conferences, etc. are enormous. After a few years here, you will have former coworkers at other tech companies who can help you advance in your career. If you lose your job, or your company fails, you won't have to move to find another job -- there will be plenty of other companies to work for. Taking a job at a startup is therefore not a huge risk. Buying a home here, and thereby tying yourself down to this area, is unlikely to hold you back in your career, as it might elsewhere -- you will probably never need to move in order to achieve advancement in your field. There is also the presence of venture capital. The VC world is very Silicon Valley-centric, although that might be changing. If you want funding, you'll have to come here for it. If you want to take advantage of your investors' professional networks to find other investors and build your team, you'll have to hire people who live here and don't want to leave. As a result of these network effects, many of the world's best software engineers choose to live here, and companies want to be here to hire them. There is now a saying in the startup world that you can start your company anywhere, but Silicon Valley is the best place to grow it, because the pool of engineering talent here is larger than it is anywhere else. Plus, this is a very nice place to live, if you can afford it. Despite some of the exaggerations many people are making in this thread, I know quite a few people who have purchased homes and condos in the past few years, including someone who bought one this week on a salary well under $200k -- without any help from his parents or anyone else. I think the highest price any of them paid was about $700k, which is well under some of the numbers people are quoting here. It's doable for a single person who has a high income, and it is easily doable for married couples who work in tech or are successful in other fields. The main barrier to ownership is the down payment, not the mortgage payments. Renting is also not as bad as people say it is, unless you live in downtown San Francisco. I pay less than $2k per month for a decent apartment in a very good location near a train station and major freeways, and I could spend less if I wanted to. My commute is quite pleasant. My rent probably sounds high to people from other cities, but on an average software engineer's salary, it is not burdensome in any way.

someguydave 10y ago
So to summarize: people are willing to pay higher rents and get lower salaries (relative to prices) for "career security" (instead of job security), nice weather, the amenity of living near people who fund startups, and the company of those who would choose the same.
- twblalock 10y ago
  Those are very big advantages. Asking why software engineers would want to live in the Bay Area is like asking why investment bankers would want to live in New York City or London. There is just such a critical mass of activity and connections that one would miss out on anywhere else.
  - someguydave 10y ago
    Those "big advantages" also come at a steep cost - somewhere between $10-100k per year for a family compared to similar conditions available elsewhere.

phamilton 10y ago

Netflix $400k salaries, $350k total comp at Google or Facebook. Uber hires can get over $1M in RSUs in addition to a healthy salary. While you may not be able to afford housing, you can bank $100k/yr if you live frugally. I'm not sure where else in the US that's a possibility.

someguydave 10y ago
Glassdoor.com gives figures of less than half of those values for "senior software engineers". There are many cities in the US where you could comfortably live on $35k and get paid $135k as an engineer.
- phamilton 10y ago
  Glassdoor reports salary and not full comp. Facebook and Google are a lot of stock-based comp. $150k salary at Google is often combined with $200k/year in Google RSUs for a senior engineer who has been there for 5 years. I find it amusing that every time I bring these numbers up, I get people telling me I'm wrong. I'm not making these up. There are people I know making those salaries. There have been countless people here who have talked about how they make that much. This isn't a secret. Living on $35k and making $135k doesn't mean you'll bank $100k/yr. Taxes cut into it. Living on $150k and making $350k does. And if you're smart you can live on $80k/yr in the bay area. I even know people living on $35k/yr out here. Not everyone gets the high paying Google job. Not everyone wants it. But it exists and it pays extremely well.
- twblalock 10y ago
  And in those cities, your housing is a smaller percentage of your disposable income than it is in Silicon Valley, but everything else, e.g. cars, phones, laptops, furniture, food, is a larger percentage. You also neglect stock purchase plans and RSUs, which are the majority of many engineers' compensation. You could make $160k per year at Apple or Google and get $200k of stock every year as well.