3 ms·

I won't weigh in on your "is it better" question, but if you make 450k a year in the Bay Area you definitely do not need to commute hours each way and you can p

I won't weigh in on your "is it better" question, but if you make 450k a year in the Bay Area you definitely do not need to commute hours each way and you can probably afford to buy a home if you want.

mooreds 6y ago
Fair point! I've never seriously considered living in the bay area so I don't know the full cost of living. Appreciate the context.
sologoub 6y ago
That REALLY depends on the details of the hypothetical persons situation. EDIT: looks like copy/paste deleted some of the post, adding back: $450k is likely $200k base, $40k bonus and $210k RSU (source levels.FYI). Most lenders won’t touch RSUs unless you had 2+ years at the same income level and even then they don’t like it. So taking 45% DTI (debt to income) ratio of base + bonus nets $9000 payment (principle + interest + taxes + insurance) and translates into $2mil purchase price assuming the hypothetical person also has $400k downpayment and reserves. That price point gets something like this: https://www.redfin.com/CA/Mountain-View/2507-Alvin-St-94043/home/606881 https://www.redfin.com/CA/Mountain-View/2507-Alvin-St-94043/...? (3/1.5 1500 sqft 5800 sqft lot) Let’s say RSUs take care of savings/extras. Schools don’t look great for this house. This is where commute comes into play - you can trade long commute for more house and better schools. Unfortunately, the geographical reality of Bay Area mean that there isn’t a lot of middle ground between short commute/lots of cost/other trade-offs or very long commute, but better everything else.
- rhizome 6y ago
  FWIW, if you scroll down you'll see the median price in that neighborhood is $1.5MM, which'll bring it down to about a $6K house payment. Easily doable at your salary estimates unless the buyer has a crippling candle addiction, and there's lots of wiggle room for location between $1.5-2MM if the buyer wants schools or anything more than proximity to work.
  - sologoub 6y ago
    That median includes condos, which won’t be doable for families. If you want a house, median is above $2M: https://sanjoserealestatelosgatoshomes.com/mountain-view-ca-real-estate-market-trends-and-statistics/ https://sanjoserealestatelosgatoshomes.com/mountain-view-ca-... Another thing to consider is that housing stock in Mountain View is very old on average, so the $2M price point doesn’t get you a mansion, but rather a very modest house (especially when considering that we are talking about TWO MILLION DOLLARS after all)

mooreds 6y ago

Fair point! I've never seriously considered living in the bay area so I don't know the full cost of living. Appreciate the context.

sologoub 6y ago

That REALLY depends on the details of the hypothetical persons situation. EDIT: looks like copy/paste deleted some of the post, adding back: $450k is likely $200k base, $40k bonus and $210k RSU (source levels.FYI). Most lenders won’t touch RSUs unless you had 2+ years at the same income level and even then they don’t like it. So taking 45% DTI (debt to income) ratio of base + bonus nets $9000 payment (principle + interest + taxes + insurance) and translates into $2mil purchase price assuming the hypothetical person also has $400k downpayment and reserves. That price point gets something like this: https://www.redfin.com/CA/Mountain-View/2507-Alvin-St-94043/home/606881 https://www.redfin.com/CA/Mountain-View/2507-Alvin-St-94043/...? (3/1.5 1500 sqft 5800 sqft lot) Let’s say RSUs take care of savings/extras. Schools don’t look great for this house. This is where commute comes into play - you can trade long commute for more house and better schools. Unfortunately, the geographical reality of Bay Area mean that there isn’t a lot of middle ground between short commute/lots of cost/other trade-offs or very long commute, but better everything else.

rhizome 6y ago
FWIW, if you scroll down you'll see the median price in that neighborhood is $1.5MM, which'll bring it down to about a $6K house payment. Easily doable at your salary estimates unless the buyer has a crippling candle addiction, and there's lots of wiggle room for location between $1.5-2MM if the buyer wants schools or anything more than proximity to work.
- sologoub 6y ago
  That median includes condos, which won’t be doable for families. If you want a house, median is above $2M: https://sanjoserealestatelosgatoshomes.com/mountain-view-ca-real-estate-market-trends-and-statistics/ https://sanjoserealestatelosgatoshomes.com/mountain-view-ca-... Another thing to consider is that housing stock in Mountain View is very old on average, so the $2M price point doesn’t get you a mansion, but rather a very modest house (especially when considering that we are talking about TWO MILLION DOLLARS after all)