5 ms·

So let me get this straight. In the "flyover country" where you DON'T get big city salaries, you're going to buy a $100k-$150k house because you don't make six

So let me get this straight. In the "flyover country" where you DON'T get big city salaries, you're going to buy a $100k-$150k house because you don't make six figures. And then with all the leftover money that you don't have because you're not earning SF engineer salary, you're going to buy a car that costs anywhere from 25%-50% of your house?

greglindahl 11y ago
Last I lived in flyover country, I bought a $162,000 house on a $55,000 salary, and owned a car a bit more expensive than a Leaf. So yes, it does work. And that's the owning a house case. There's also the "renting an apartment at a modern complex" case.
bpodgursky 11y ago
Bay area house prices are not proportional (even discarding the effects of higher marginal tax rates). 150K salary for a million dollar house is not easy; 150k house on 50k salary (and a 3x salary difference is a bit of an exaggeration, while house prices are not) is much more plausible.
- kenrikm 11y ago
  I bought a foreclosed 70k house in Miami in 2009 (4br - 2.5bth, now worth 150k - rented and cash flow positive) I've lived in the bay area since 2012 It hurts knowing I could buy two or three more houses with what I pay in rent here, similar houses in the bay cost 600-700k yes it really is a 5-10x difference #sigh
chao- 11y ago
Have you seen the vehicle culture in "flyover country"? You will absolutely see people put off repairs and upkeep to their house while they make sure they get a new car every 5 years (or stagger new cars with their spouse, 10 years for each because). If you haven't seen it, I can only ask you believe someone (me) with experience in it (various cities in Texas). Would it surprise you as well to learn that "SF engineer" isn't the only job in the world that pays a high salary? In Houston for instance, I know dozens of people who earn comparable amounts from engineering in the medical and energy companies. And don't get me started on the consultancies that support them (megabucks) or salespeople paid on commission (ultrabucks). It's actually one of the biggest obstacles to our startup community here: luring good people away from their low-risk, high-salary position in energy, medicine and finance.
- msandford 11y ago
  Yeah I've never lived in SF but I understand that the economics are different out there. Once you have a note on a million dollar house, what's another $80k for a car? It barely moves the needle. But when your mortgage is only $1k/mo and then you have to spend another $1k/mo on a car (before insurance or "fuel" or anything else) you might start to wonder. I've got a Subaru and I figure that car will cost me about $1500/year for the car and another $200/mo for fuel. That's $400/mo insured and everything versus the $1100-$1200 for the Tesla. Look I'm not saying it's IMPOSSIBLE for people to buy electric cars. But the idea that somehow all the millenials who have generally been screwed by not buying real estate before interest rates went to zero are going to find the cash to start buying electric cars seems pretty laughable to me. Will some do it? For sure! If you can pull down six figures somewhere with a reasonable cost of living it's totally doable. But there aren't too many places where you can make six figures without everything else costing more too. EDIT: I live in flyover country. Always have. I'm talking from experience, not how I perceive things from my golden throne on the west coast.
  - Gibbon1 11y ago
    Actually I do live in SF. If you put a million dollar note on a house you are the mother of all house poor. One point I make is the Tesla is luxo-sport car. Costs a lot new like any other sporty car. So the cost of a new Tesla vs a used gasoline power car isn't really a fair comparison. Looking on Craigslist, you can get a used Nissan Leaf $10k, cost per mile is $0.035. One can run numbers but the cost of ownership is probably $300/mo. Problematical in places like SF is the lack of parking and thus lack of charging. Though large numbers of people do have or rent garages. In Suburbs a problem can be many people have long commutes that exceed the range of an electric car. Interestingly a friend just threw down for one of those million dollar homes in SF and is considering an electric car to avoid having to ride the google bus. I'll be interested in how it works our for him. I do have another friend that lives in Oakland, he has a leaf seems to like it.
    - msandford 11y ago
      > One point I make is the Tesla is luxo-sport car. Costs a lot new like any other sporty car. So the cost of a new Tesla vs a used gasoline power car isn't really a fair comparison. Looking on Craigslist, you can get a used Nissan Leaf $10k, cost per mile is $0.035. One can run numbers but the cost of ownership is probably $300/mo. I guess that's kind-of my point. If millenials can't afford to buy houses they're probably not buying luxo-sports cars. It's not that a Tesla is a bad idea, it's just that the idea that millions of young people with no real assets are going to buy them is a fantasy. I would suggest that it's roughly as silly as saying pretty soon all the millenials are going to be driving 5 and 7 series BMWs. Not unless those cars come down in price by 80%-90% or everyone somehow magically gets rich AND there's no inflation.
VLM 11y ago
"In the "flyover country" where you DON'T get big city salaries" Sure you do. I could expect at absolute most a 25% pay raise if I moved to CA. Its not worth it. The ratio in cost of living might be 10:1 but the ratio in income is more like 5:4 or so.

greglindahl 11y ago

Last I lived in flyover country, I bought a $162,000 house on a $55,000 salary, and owned a car a bit more expensive than a Leaf. So yes, it does work. And that's the owning a house case. There's also the "renting an apartment at a modern complex" case.

bpodgursky 11y ago

Bay area house prices are not proportional (even discarding the effects of higher marginal tax rates). 150K salary for a million dollar house is not easy; 150k house on 50k salary (and a 3x salary difference is a bit of an exaggeration, while house prices are not) is much more plausible.

kenrikm 11y ago
I bought a foreclosed 70k house in Miami in 2009 (4br - 2.5bth, now worth 150k - rented and cash flow positive) I've lived in the bay area since 2012 It hurts knowing I could buy two or three more houses with what I pay in rent here, similar houses in the bay cost 600-700k yes it really is a 5-10x difference #sigh

chao- 11y ago

Have you seen the vehicle culture in "flyover country"? You will absolutely see people put off repairs and upkeep to their house while they make sure they get a new car every 5 years (or stagger new cars with their spouse, 10 years for each because). If you haven't seen it, I can only ask you believe someone (me) with experience in it (various cities in Texas). Would it surprise you as well to learn that "SF engineer" isn't the only job in the world that pays a high salary? In Houston for instance, I know dozens of people who earn comparable amounts from engineering in the medical and energy companies. And don't get me started on the consultancies that support them (megabucks) or salespeople paid on commission (ultrabucks). It's actually one of the biggest obstacles to our startup community here: luring good people away from their low-risk, high-salary position in energy, medicine and finance.

msandford 11y ago
Yeah I've never lived in SF but I understand that the economics are different out there. Once you have a note on a million dollar house, what's another $80k for a car? It barely moves the needle. But when your mortgage is only $1k/mo and then you have to spend another $1k/mo on a car (before insurance or "fuel" or anything else) you might start to wonder. I've got a Subaru and I figure that car will cost me about $1500/year for the car and another $200/mo for fuel. That's $400/mo insured and everything versus the $1100-$1200 for the Tesla. Look I'm not saying it's IMPOSSIBLE for people to buy electric cars. But the idea that somehow all the millenials who have generally been screwed by not buying real estate before interest rates went to zero are going to find the cash to start buying electric cars seems pretty laughable to me. Will some do it? For sure! If you can pull down six figures somewhere with a reasonable cost of living it's totally doable. But there aren't too many places where you can make six figures without everything else costing more too. EDIT: I live in flyover country. Always have. I'm talking from experience, not how I perceive things from my golden throne on the west coast.
- Gibbon1 11y ago
  Actually I do live in SF. If you put a million dollar note on a house you are the mother of all house poor. One point I make is the Tesla is luxo-sport car. Costs a lot new like any other sporty car. So the cost of a new Tesla vs a used gasoline power car isn't really a fair comparison. Looking on Craigslist, you can get a used Nissan Leaf $10k, cost per mile is $0.035. One can run numbers but the cost of ownership is probably $300/mo. Problematical in places like SF is the lack of parking and thus lack of charging. Though large numbers of people do have or rent garages. In Suburbs a problem can be many people have long commutes that exceed the range of an electric car. Interestingly a friend just threw down for one of those million dollar homes in SF and is considering an electric car to avoid having to ride the google bus. I'll be interested in how it works our for him. I do have another friend that lives in Oakland, he has a leaf seems to like it.
  - msandford 11y ago
    > One point I make is the Tesla is luxo-sport car. Costs a lot new like any other sporty car. So the cost of a new Tesla vs a used gasoline power car isn't really a fair comparison. Looking on Craigslist, you can get a used Nissan Leaf $10k, cost per mile is $0.035. One can run numbers but the cost of ownership is probably $300/mo. I guess that's kind-of my point. If millenials can't afford to buy houses they're probably not buying luxo-sports cars. It's not that a Tesla is a bad idea, it's just that the idea that millions of young people with no real assets are going to buy them is a fantasy. I would suggest that it's roughly as silly as saying pretty soon all the millenials are going to be driving 5 and 7 series BMWs. Not unless those cars come down in price by 80%-90% or everyone somehow magically gets rich AND there's no inflation.

VLM 11y ago

"In the "flyover country" where you DON'T get big city salaries" Sure you do. I could expect at absolute most a 25% pay raise if I moved to CA. Its not worth it. The ratio in cost of living might be 10:1 but the ratio in income is more like 5:4 or so.