3 ms·

The problem with second-tier cities, as I see them, is that you have to move every time you get a new job, if you are maximizing your income/career. (I mean, no

by lsc 8y ago

The problem with second-tier cities, as I see them, is that you have to move every time you get a new job, if you are maximizing your income/career. (I mean, not doing that is totally valid, but it's important to factor in the "I took a worse job because it was closer to the house that it would be expensive for me to abandon" thing into your expense/utility calculations. keep in mind that reduced job choice can mean increased stress and unpleasantness as much or more than it can mean simply getting less money.) I think if you work in tech, silicon valley is pretty unique in that there are so many really desirable employers within a short distance. I'd be comfortable buying a house here even if it meant that it makes it really expensive if I want a job more than 15 miles out.

closeparen 8y ago
The novelty of eye-popping direct deposits has worn off; the rate at which I shovel money from venture capital to real estate brings me no particular joy. Maximizing income can only inch me closer to the quality of living situation I'd have elsewhere. The point at which I'd be done increasing housing budget, and actually free to increase other investments or luxury consumption, does not appear attainable. (Consider savings for a down payment as part of housing budget here. And if I could buy a starter home, my next priority would be fixing either the commute time or neighborhood safety compromise that made it a starter home). I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living (and my parents who got me accustomed to it were in much less lucrative fields). I stay becuase I like the work and the company, because why not take this opportunity while I'm young? But it's an indulgent youthful adventure, not a sustainable long-term plan.
- lsc 8y ago
  >I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living so, assuming you are a medium density type and can stomach an apartment with reasonable soundproofing, you are spending $3000/month on rent here, for a reasonably okay 1 bedroom apartment. (if you are willing to take a hit in quality, you can get more bedrooms or even a bad single family home for about that price) So you move to a second-tier city and you get the same thing for $1500/month. Now, I don't make twice here what I would in a second-tier city, but I do make rather more than an extra $1500 a month.
  - closeparen 8y ago
    Yep, that's about what I'm doing, and it's fine. Good, even. But a similar unit in condo form would require a $200k downpayment (save $2000/mo for 9 years) and then $5500/mo through the 30-year mortgage term. That's assuming prices stay flat for 9 years, which would be extraordinary. I don't see any part of my company's SWE job ladder supporting those numbers. But if I want to try, I can't allow my lifestyle to inflate at all under future raises. They all need to be shoveled into that gaping hole.
    - lsc 8y ago
      Paysa claims the median SWE in mountain view makes around $190K total comp, with like $65K of that being bonus and stock. (that's lower than I would think from talking with people, but a lot of my friends are mid to late career and working at the more desirable companies, so I guess that makes sense.) Note, a lot of companies pay more. according to paysa, the mean Facebook SWE makes like $230k in Sunnyvale (the closest location to mountain view that paysa has information on facebook for.) Trulia claims that the median 1 bedroom in mountain view is $860K, which is higher than I thought; (santa clara, where I live, it's $622K) 20% of that is $172K... so four and a half years of living off your base salary would be required (three and a half if you commute in from santa clara) I mean, depending on your tax bracket, of course. And all this is looking at the median, and in the comment I'm responding to, you were talking about the best SWE jobs at your company. I can tell you that it's not at all unusual for individual contributors who are pretty good but not famous or anything to do rather better than the paysa numbers, salary wise. All that said, I personally don't plan on buying at these prices; (and I'm a sysadmin and have no degree; I'm gonna make maybe 15-20% less than a SWE with a degree at my level) I think right now, landlords are willing to lose money on the actual rent in order to make money on the appreciation. I dunno if this is a good idea long-term, just 'cause if this is the new normal, if housing prices keep rising, I might actually price myself out of desirable metros, and be forced to move to a second-tier city, which I would find unpleasant... but I see no reason to hurry to those second tier cities. Certainly, rent seems to be limited by what people can pay, and as someone SWE-ajacent, I make more than most people, even here in the bay area, so something would have to go wrong with my career to the point where I wasn't making more money than most people locally for me to get priced out of the local rental market. I mean, if there were smaller, cheaper places available, I'd drop a quarter-million on a "plan b" just so I could continue to live around here if my own career went south... but I probably have much stronger social reasons to stay than you do. Some of my friends and I have been considering investing in real-estate in a second tier city, just to hedge against the case where real-estate continues to climb globally, but paying half what a house costs here seems high for that. A buddy of mine has been talking about Cleveland (one of his value functions is functional public transit) Cleveland is a lot more than half cheaper than the bay area... but I don't think I'd want to live there.

by lsc 8y ago

closeparen 8y ago

The novelty of eye-popping direct deposits has worn off; the rate at which I shovel money from venture capital to real estate brings me no particular joy. Maximizing income can only inch me closer to the quality of living situation I'd have elsewhere. The point at which I'd be done increasing housing budget, and actually free to increase other investments or luxury consumption, does not appear attainable. (Consider savings for a down payment as part of housing budget here. And if I could buy a starter home, my next priority would be fixing either the commute time or neighborhood safety compromise that made it a starter home). I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living (and my parents who got me accustomed to it were in much less lucrative fields). I stay becuase I like the work and the company, because why not take this opportunity while I'm young? But it's an indulgent youthful adventure, not a sustainable long-term plan.

lsc 8y ago
>I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living so, assuming you are a medium density type and can stomach an apartment with reasonable soundproofing, you are spending $3000/month on rent here, for a reasonably okay 1 bedroom apartment. (if you are willing to take a hit in quality, you can get more bedrooms or even a bad single family home for about that price) So you move to a second-tier city and you get the same thing for $1500/month. Now, I don't make twice here what I would in a second-tier city, but I do make rather more than an extra $1500 a month.
- closeparen 8y ago
  Yep, that's about what I'm doing, and it's fine. Good, even. But a similar unit in condo form would require a $200k downpayment (save $2000/mo for 9 years) and then $5500/mo through the 30-year mortgage term. That's assuming prices stay flat for 9 years, which would be extraordinary. I don't see any part of my company's SWE job ladder supporting those numbers. But if I want to try, I can't allow my lifestyle to inflate at all under future raises. They all need to be shoveled into that gaping hole.
  - lsc 8y ago
    Paysa claims the median SWE in mountain view makes around $190K total comp, with like $65K of that being bonus and stock. (that's lower than I would think from talking with people, but a lot of my friends are mid to late career and working at the more desirable companies, so I guess that makes sense.) Note, a lot of companies pay more. according to paysa, the mean Facebook SWE makes like $230k in Sunnyvale (the closest location to mountain view that paysa has information on facebook for.) Trulia claims that the median 1 bedroom in mountain view is $860K, which is higher than I thought; (santa clara, where I live, it's $622K) 20% of that is $172K... so four and a half years of living off your base salary would be required (three and a half if you commute in from santa clara) I mean, depending on your tax bracket, of course. And all this is looking at the median, and in the comment I'm responding to, you were talking about the best SWE jobs at your company. I can tell you that it's not at all unusual for individual contributors who are pretty good but not famous or anything to do rather better than the paysa numbers, salary wise. All that said, I personally don't plan on buying at these prices; (and I'm a sysadmin and have no degree; I'm gonna make maybe 15-20% less than a SWE with a degree at my level) I think right now, landlords are willing to lose money on the actual rent in order to make money on the appreciation. I dunno if this is a good idea long-term, just 'cause if this is the new normal, if housing prices keep rising, I might actually price myself out of desirable metros, and be forced to move to a second-tier city, which I would find unpleasant... but I see no reason to hurry to those second tier cities. Certainly, rent seems to be limited by what people can pay, and as someone SWE-ajacent, I make more than most people, even here in the bay area, so something would have to go wrong with my career to the point where I wasn't making more money than most people locally for me to get priced out of the local rental market. I mean, if there were smaller, cheaper places available, I'd drop a quarter-million on a "plan b" just so I could continue to live around here if my own career went south... but I probably have much stronger social reasons to stay than you do. Some of my friends and I have been considering investing in real-estate in a second tier city, just to hedge against the case where real-estate continues to climb globally, but paying half what a house costs here seems high for that. A buddy of mine has been talking about Cleveland (one of his value functions is functional public transit) Cleveland is a lot more than half cheaper than the bay area... but I don't think I'd want to live there.