3 ms·

I promise you that someone in SF making $50k/month can comfortably afford a very nice house.

by EPWN3D 3mo ago

qurren 3mo ago
I promise you not. Houses here cost $2M+ for something livable and $1M for something with mold and other safety issues. When half that $50K gets taxed, half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house.
- onraglanroad 3mo ago
  Ok, I made my other comment before seeing this but I find it very difficult to believe you can't find something reasonable for far less.
  - qurren 3mo ago
    Nah it's the reality here. I'd say minimum income to safely own housing here is $100K-150K/month. OR cash already saved for the home, in which case income doesn't matter. Yes, lots of households make that much, especially people at e.g. Nvidia with unvested appreciated RSUs. Yes, the US economy is that badly fucked. And the people on mortages were brainwashed into buying something they can't afford, and in for a foreclosure disaster when the economy corrects.
    - kbelder 3mo ago
      You can't make many national judgements based on the economics of the Bay Area. It's much more sane in nearly every other area (with some other outliers, such as New York City).
    - tenuousemphasis 3mo ago
      You're shifting the goal posts, but I'll bite... what is 'safely' owning a home, to you?
    - polairscience 3mo ago
      In every thread about housing people on HN post wildly outlandish claims about expenses that belie their totally out of touch perspectives. If you make 100K a month (the lower bound of what you just wrote). Let's say you put 25K into retirement. You eat out every meal so 4K food/living budget. That leaves 60K (I'll give you 10K slush fund for savings money or as a general keeping-up-with-the-jones' fund). 60K per month will pay a 4.5 million dollar mortgage. 4.5 million will buy you some of the nicest houses in the bay that aren't mansions. See: https://www.realtor.com/news/unique-homes/midcentury-modern-masterpiece-sale-historic-california/ https://www.realtor.com/news/unique-homes/midcentury-modern-... You are either insane, or out of touch in a way that makes you insane. Of course, you can get a much cheaper very nice condo and "safely" squirrel away phenomenal amounts of cash savings. Expecting to own a high end house in a dense metro are on its own, is a pretty insane expectation.
      - nostrademons 3mo ago
        Don't forget taxes. In that bracket, in California, you're paying 50% of your income in taxes, and so $100K/month is actually $50K/month. I think OP is overselling the point, but not by nearly as much as people think.
        Symbiote 3mo ago
        That's not how tax brackets work. The effective tax would be about 26%.
        nostrademons 3mo ago
        It's quite a bit more than that. I get total taxes paid of: Federal: 1240 + 0.12 * (50400 - 12401) + 0.22 * (105700 - 50401) + 0.24 * (201775 - 105771) + 0.32 * (256225 - 201776) + 0.35 * (640600 - 256226) + 0.37 * (1200000 - 640601) = 399938.83 State: 0.01 * 11078 + 0.02 * (26264 - 11080) + 0.04 * (41452 - 26265) + 0.06 * (57542 - 41453) + 0.08 * (72724 - 57543) + 0.093 * (371479 - 72725) + 0.0103 * (445771 - 371480) + 0.0113 * (742953 - 445772) + 0.0123 * (1200000 - 742954) SF property tax on a $4.5M property: 1.18268325% for a total of about $53,220.75 Total: about $493K for an effective tax rate of about 41%, assuming this hypothetical SF resident is single and just purchased their $4.5M property this year.
  - arjie 3mo ago
    It’s untrue. Unstated assumptions are the quality of housing desired and location desired. In practice, because of the rent/price ratio being low here in SF most people will be taking a downgrade when going from rent to 1.25x that as mortgage after putting down $300k for a $1.5m. It is true that the marginal rate can be very high, though, so heuristics based on pre tax income break down at these numbers. The place we live in costs $7k/mo but to buy it we’d have to spend $450k and then $9.5k/mo.
- skissane 3mo ago
  > half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house. Buying a $2M house is saving for retirement. Owning your own home in retirement is a massive financial win. And if you own a home in an expensive market, you can sell it, buy one in a more affordable market, and then the difference is unlocked retirement savings.
- deleted 3mo ago
  [deleted]
- dwa3592 3mo ago
  I am not even sure if you are being sarcastic. https://www.zillow.com/homedetails/80-Prentiss-St-San-Francisco-CA-94110/15161527_zpid/ https://www.zillow.com/homedetails/80-Prentiss-St-San-Franci... check this out.
  - mikestew 3mo ago
    Man, that's nicer than houses in Redmond for the same money (though the SF one is a touch smaller), and you won't get that view. Bay Area house prices are insane, ya say?

I promise you that someone in SF making $50k/month can comfortably afford a very nice house.

by EPWN3D 3mo ago

I promise you that someone in SF making $50k/month can comfortably afford a very nice house.

I promise you not. Houses here cost $2M+ for something livable and $1M for something with mold and other safety issues. When half that $50K gets taxed, half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house.

onraglanroad 3mo ago
Ok, I made my other comment before seeing this but I find it very difficult to believe you can't find something reasonable for far less.
- qurren 3mo ago
  Nah it's the reality here. I'd say minimum income to safely own housing here is $100K-150K/month. OR cash already saved for the home, in which case income doesn't matter. Yes, lots of households make that much, especially people at e.g. Nvidia with unvested appreciated RSUs. Yes, the US economy is that badly fucked. And the people on mortages were brainwashed into buying something they can't afford, and in for a foreclosure disaster when the economy corrects.
  - kbelder 3mo ago
    You can't make many national judgements based on the economics of the Bay Area. It's much more sane in nearly every other area (with some other outliers, such as New York City).
  - tenuousemphasis 3mo ago
    You're shifting the goal posts, but I'll bite... what is 'safely' owning a home, to you?
  - polairscience 3mo ago
    In every thread about housing people on HN post wildly outlandish claims about expenses that belie their totally out of touch perspectives. If you make 100K a month (the lower bound of what you just wrote). Let's say you put 25K into retirement. You eat out every meal so 4K food/living budget. That leaves 60K (I'll give you 10K slush fund for savings money or as a general keeping-up-with-the-jones' fund). 60K per month will pay a 4.5 million dollar mortgage. 4.5 million will buy you some of the nicest houses in the bay that aren't mansions. See: https://www.realtor.com/news/unique-homes/midcentury-modern-masterpiece-sale-historic-california/ https://www.realtor.com/news/unique-homes/midcentury-modern-... You are either insane, or out of touch in a way that makes you insane. Of course, you can get a much cheaper very nice condo and "safely" squirrel away phenomenal amounts of cash savings. Expecting to own a high end house in a dense metro are on its own, is a pretty insane expectation.
    - nostrademons 3mo ago
      Don't forget taxes. In that bracket, in California, you're paying 50% of your income in taxes, and so $100K/month is actually $50K/month. I think OP is overselling the point, but not by nearly as much as people think.
      - Symbiote 3mo ago
        That's not how tax brackets work. The effective tax would be about 26%.
        nostrademons 3mo ago
        It's quite a bit more than that. I get total taxes paid of: Federal: 1240 + 0.12 * (50400 - 12401) + 0.22 * (105700 - 50401) + 0.24 * (201775 - 105771) + 0.32 * (256225 - 201776) + 0.35 * (640600 - 256226) + 0.37 * (1200000 - 640601) = 399938.83 State: 0.01 * 11078 + 0.02 * (26264 - 11080) + 0.04 * (41452 - 26265) + 0.06 * (57542 - 41453) + 0.08 * (72724 - 57543) + 0.093 * (371479 - 72725) + 0.0103 * (445771 - 371480) + 0.0113 * (742953 - 445772) + 0.0123 * (1200000 - 742954) SF property tax on a $4.5M property: 1.18268325% for a total of about $53,220.75 Total: about $493K for an effective tax rate of about 41%, assuming this hypothetical SF resident is single and just purchased their $4.5M property this year.
- arjie 3mo ago
  It’s untrue. Unstated assumptions are the quality of housing desired and location desired. In practice, because of the rent/price ratio being low here in SF most people will be taking a downgrade when going from rent to 1.25x that as mortgage after putting down $300k for a $1.5m. It is true that the marginal rate can be very high, though, so heuristics based on pre tax income break down at these numbers. The place we live in costs $7k/mo but to buy it we’d have to spend $450k and then $9.5k/mo.
skissane 3mo ago
> half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house. Buying a $2M house is saving for retirement. Owning your own home in retirement is a massive financial win. And if you own a home in an expensive market, you can sell it, buy one in a more affordable market, and then the difference is unlocked retirement savings.
deleted 3mo ago
[deleted]
dwa3592 3mo ago
I am not even sure if you are being sarcastic. https://www.zillow.com/homedetails/80-Prentiss-St-San-Francisco-CA-94110/15161527_zpid/ https://www.zillow.com/homedetails/80-Prentiss-St-San-Franci... check this out.
- mikestew 3mo ago
  Man, that's nicer than houses in Redmond for the same money (though the SF one is a touch smaller), and you won't get that view. Bay Area house prices are insane, ya say?