4 ms·

True story: 2 mid-level engineers both working at a FANG, and we can barely afford a 3bdr/2.5bath in Sunnyvale/Santa Clara without burning thru 30-40% of our mo

True story: 2 mid-level engineers both working at a FANG, and we can barely afford a 3bdr/2.5bath in Sunnyvale/Santa Clara without burning thru 30-40% of our monthly income (including RSUs). Having bid on a few houses, I'm amazed by how opaque the market is here. Houses will be listed 30% less than expected selling price and when you do make an offer, the seller will come back with a higher price to all those who made an offer... I suspect some collusion on the part of the real estate agents.

nradov 8y ago
New homeowners anywhere in the country frequently stretch their monthly budgets to that range based on the expectation that their incomes will eventually increase while mortgage payments remain fixed. The housing market is fairly efficient and with so many participants effective collusion would be implausible. Asking prices are essentially meaningless, just the starting point in a negotiation.
- kjeetgill 8y ago
  They point is that they're FANG employees and they probably make FAR above what most anyone else can be expected to. 30-40% of their monthly income is means that anyone outside of FANG is priced out. They feel the pressure but hey, they'll be fine. Anyone short of FANG will really feel it.
cameronlpmoore 8y ago
Listing a property below the expected selling price is a common strategy to induce a bidding war. If a homeowner receives 10+ offers at or above asking price then that homeowner is perfectly reasonable in coming back with an even higher price and seeing which bidder wants it the most. It's the homeowner's asset and it makes sense for that person to sell it for as much as possible - no collusion needed.
jorblumesea 8y ago
This is how real estate works in a high demand market. Houses are intentionally listed as lower than their true market value in order to create a bidding war between possible buyers. Seattle does the same thing.
TACIXAT 8y ago
It's absolutely insane. We need to give up the idea that we can have huge employers surrounded by single family homes. I'd take a nice apartment close to work over a million dollar home and 45 minute commute. That was one of the biggest contrasts to me going to China, "small" cities were incredibly dense. It was just apartment after apartment. I don't know what the catalyst will be in the US to get us to go from single family communities to density.
dcldcl 8y ago
The asking price is not expect selling price. Things have changed in SV. I don't know if it is the higher interest rates or something else, but the market has cooled off quite a bit in the last 2-3 months. I bet you can find houses very near their asking price now. Days on market is going up.
abc_lisper 8y ago
You must be living in one of fancy new apartments on Lawrence exp-way or something. Let's assume your household income is 500k/pa which means you should get 300k net. You must be paying (30% of (300/12) is) 8.3k per month. Are you really paying that much? I live in Fremont, work in south-bay and I pay 2.5k/per month for my own house on mortgage, bought a year ago. I think you are overpaying by a lot.

nradov 8y ago

New homeowners anywhere in the country frequently stretch their monthly budgets to that range based on the expectation that their incomes will eventually increase while mortgage payments remain fixed. The housing market is fairly efficient and with so many participants effective collusion would be implausible. Asking prices are essentially meaningless, just the starting point in a negotiation.

kjeetgill 8y ago
They point is that they're FANG employees and they probably make FAR above what most anyone else can be expected to. 30-40% of their monthly income is means that anyone outside of FANG is priced out. They feel the pressure but hey, they'll be fine. Anyone short of FANG will really feel it.

cameronlpmoore 8y ago

Listing a property below the expected selling price is a common strategy to induce a bidding war. If a homeowner receives 10+ offers at or above asking price then that homeowner is perfectly reasonable in coming back with an even higher price and seeing which bidder wants it the most. It's the homeowner's asset and it makes sense for that person to sell it for as much as possible - no collusion needed.

jorblumesea 8y ago

This is how real estate works in a high demand market. Houses are intentionally listed as lower than their true market value in order to create a bidding war between possible buyers. Seattle does the same thing.

TACIXAT 8y ago

It's absolutely insane. We need to give up the idea that we can have huge employers surrounded by single family homes. I'd take a nice apartment close to work over a million dollar home and 45 minute commute. That was one of the biggest contrasts to me going to China, "small" cities were incredibly dense. It was just apartment after apartment. I don't know what the catalyst will be in the US to get us to go from single family communities to density.

dcldcl 8y ago

The asking price is not expect selling price. Things have changed in SV. I don't know if it is the higher interest rates or something else, but the market has cooled off quite a bit in the last 2-3 months. I bet you can find houses very near their asking price now. Days on market is going up.

abc_lisper 8y ago

You must be living in one of fancy new apartments on Lawrence exp-way or something. Let's assume your household income is 500k/pa which means you should get 300k net. You must be paying (30% of (300/12) is) 8.3k per month. Are you really paying that much? I live in Fremont, work in south-bay and I pay 2.5k/per month for my own house on mortgage, bought a year ago. I think you are overpaying by a lot.