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At around $150k/yr, a bank will typically lend around $350-400k (more would be imprudent, even if the bank agrees). So even with two people working and making a

by joesmo 11y ago

At around $150k/yr, a bank will typically lend around $350-400k (more would be imprudent, even if the bank agrees). So even with two people working and making a decent, probably average wage for SV, it's still impossible to buy a median home there. Of course people are leaving.

kordless 11y ago
Your numbers are low. $150K/yr will get you almost double that with good credit and a decent downpayment.
- joesmo 11y ago
  Yes, but then your payment is $4-5k a month, more than half of what you're bringing home every month. That's not really feasible and a terrible financial situation to be in.
  - kordless 11y ago
    At higher income levels, it really doesn't matter if you are spending 1/2 of your income on your home. If I'm making $200K/year, that gives me ~$8K of spending power per month for my home and ~$8K, pre-tax, for other things. If the market is going up, long term, then buying a house is a good investment vehicle for your money. It's also a writeoff on your taxes. That said, my response was targeting the comment about what a bank would loan you at a given salary, not whether it was a good idea or not. :)
vitd 11y ago
Yeah, and the other thing is that the square footage of a "median" home and its lot size also varies greatly between these places. Not only are homes cheaper outside SV, they're also usually bigger and sitting on bigger lots. So it may be even worse than it sounds.
geebee 11y ago
I think they'll lend considerably more than that, though I'm not saying it's a good idea. Here's a link: http://www.sfgate.com/business/networth/article/Bay-Area-a-barometer-for-new-mortgage-rules-5118943.php http://www.sfgate.com/business/networth/article/Bay-Area-a-b... It sounds like they'll go up to 43% for a "jumbo loan" (thats not just mortgage), and according to the article, it can go higher if the buyer is strong in other ways. With interest rates for jumbo mortgages probably a bit above 4%, that would leave a two income household with 200-300K in income enough to purchase the median priced house. I'm not saying it's an appealing idea, just that it isn't impossible.

by joesmo 11y ago

kordless 11y ago

Your numbers are low. $150K/yr will get you almost double that with good credit and a decent downpayment.

joesmo 11y ago
Yes, but then your payment is $4-5k a month, more than half of what you're bringing home every month. That's not really feasible and a terrible financial situation to be in.
- kordless 11y ago
  At higher income levels, it really doesn't matter if you are spending 1/2 of your income on your home. If I'm making $200K/year, that gives me ~$8K of spending power per month for my home and ~$8K, pre-tax, for other things. If the market is going up, long term, then buying a house is a good investment vehicle for your money. It's also a writeoff on your taxes. That said, my response was targeting the comment about what a bank would loan you at a given salary, not whether it was a good idea or not. :)

vitd 11y ago

Yeah, and the other thing is that the square footage of a "median" home and its lot size also varies greatly between these places. Not only are homes cheaper outside SV, they're also usually bigger and sitting on bigger lots. So it may be even worse than it sounds.

geebee 11y ago

I think they'll lend considerably more than that, though I'm not saying it's a good idea. Here's a link: http://www.sfgate.com/business/networth/article/Bay-Area-a-barometer-for-new-mortgage-rules-5118943.php http://www.sfgate.com/business/networth/article/Bay-Area-a-b... It sounds like they'll go up to 43% for a "jumbo loan" (thats not just mortgage), and according to the article, it can go higher if the buyer is strong in other ways. With interest rates for jumbo mortgages probably a bit above 4%, that would leave a two income household with 200-300K in income enough to purchase the median priced house. I'm not saying it's an appealing idea, just that it isn't impossible.