
The Typical Home in San Jose Now Costs More Than $1M - prostoalex
http://blogs.wsj.com/economics/2016/08/10/the-typical-home-in-san-jose-now-costs-more-than-1-million/
======
raverbashing
Remember that a mortgage is pretty much a bet that the "affordability" of your
house will decrease over time (that is, either it's going up in value and/or
your ability to pay for it decreases).

That's the trade-off. You're fixing its price today and making payments for
the next decades based on this.

If you rent, yes, the price may vary, but there's no strings attached (at
least, much fewer than with a mortgage)

~~~
holdenc
Agreed. My condolences to anyone who finds themselves with a salaried tech job
and a $5000/mo mortgage payment.

~~~
shostack
Why is that?

~~~
holdenc
A $150K salary leaves around $8K a month income. Spending $5K of that on a
mortgage payment doesn't leave much for anything else.

------
Hydraulix989
This is news? It's just another ridiculous facet of living in the Bay Area.
You're making 150k/yr at your software engineering gig, but you're 35 years
old and still renting.

~~~
brian-armstrong
35 year olds in the bay are making closer to $300-$500k/yr, not $150k.
Probably not that many renting if they don't want to

~~~
yaakov34
That's just not true, not by any stretch. Certainly not for the median salary,
and not even for the average, even though that's distorted by the long tail of
very high salaries. There are easily-googled studies out there which put mid-
career median salaries at $150k at best. If that seems absurdly low to you,
that's probably because your friends are a self-selected group (as they are
for everyone). Sort of like "how could Nixon win, I don't know anyone who
voted for him".

~~~
brian-armstrong
To be clear, my comment applies specifically to software engineers in the bay
area

~~~
yaakov34
So does mine. I just spent a few minutes researching this on Payscale, which
confirmed the impression I already had: someone with a degree from a good
school and a lot of experience can easily get an offer around $150k from one
of the better companies in the bay area (assuming one interviews well). Their
median was $148k, in fact. Numbers like $300k or $500k are not typical for
software engineers, even in the best companies.

And remember that not everyone works for one of the top companies. There are
hundreds of thousands of programmers in California (not sure about the bay
area, although that has to account for a lot of them), most of them are well
out of their twenties, and most of them don't work for Google or Facebook or
anything as prestigious or well-funded.

------
honkhonkpants
Bzzzt. Inaccurate headline. A million dollars was the median price for homes
that changed hands in a 90-day period earlier this year in San Jose. It is not
the price of the median home in San Jose.

~~~
michael_storm
Have to disagree. If you've bought a home on the open market in San Jose in
the last three months, the median price you paid is $1 million. That's what a
"typical home in San Jose" "costs". Homes not on the open market don't have a
cost; they have an appraised value. The market defines the cost.

~~~
foota
I'm selling a home in Antarctica, where the median home value is a billion
dollars, for a billion dollars. Interested in buying?

~~~
princeb
well, now i'm selling two homes in Antarctica for 50 cents each.

~~~
rjbwork
Wow! The market dropped by 66% in less than half an hour!

~~~
princeb
not the one downmodding you but..

haha no it doesn't! the median lost almost all its value because the median of
(0.5, 0.5, 1e9) is 0.5

~~~
rjbwork
Yeah. It was just a dumb joke so i just said a regular old mean average. Am I
still wrong? I don't really know much about real estate practices.

------
matt_wulfeck
The Bay Area is just like the tech-heavy Nasdaq index it helps propel: When
the going is good, the going is very good. But when it's bad it's really,
really bad.

Detroit was really good for a long time too I hear. But don't worry this time
it's different.

~~~
5ersi
Detroit largely relied on a single product: cars

Bay area is much more diversified and due to startup mentality also much more
adaptable to failure.

~~~
ubernostrum
The Bay area has ceased to function independently of the tech startup culture.
When all the "get an underpaid person who lives three counties over to do this
everyday task for you" apps go under, half the population will be immobilized
and starve.

But at least you'd be in good company; pg's already tweeted to the effect that
cities which don't have Uber can't be startup hubs, so that would kill the
startup culture of starting up startups to startup the startups by being
startups for startups, or whatever the hell it is we allegedly do out here
now.

~~~
shostack
Source on the "half" figure? A significant amount of talent is at large
established tech companies with billions in the bank.

I'd love to see what % of workers in the Bay are actually at funded startups
that would be adversely impacted if the economy took a bad turn because they
lack a solid business model.

My guess is the giants would hire up a bunch of them and life would go on.

~~~
ubernostrum
_Source on the "half" figure?_

You're right. Probably more like three-quarters.

------
NKCSS
What I don't understand is, why don't companies (or a bunch of them) that have
large stocks of cash (billions/trillions) just buy a huge load of land
somewhere in the US and build a country inside a country? There are places
where land costs near nothing; just hook up all the facilities and GO.

~~~
jakozaur
You can even pick an existing city and start from there. There are tons of
places in USA and Europe that would provide tons of benefits anyone willing to
move there.

~~~
raverbashing
Because the bay area was created to be isolated, in a self-centered culture.
_by design_ (before the end of WWII, to create technology as far away as the
conflict in Europe)

The "cool people" came later, those who were deployed on the Pacific Theatre
and decided to stay there. Granted, some of them were there before, because of
the cinema industry

They, in a way, thrived on isolation.

~~~
Hydraulix989
It goes before that, the 1849 Gold Rush was the "first boom" well before
anything dotcom and its poignant parallels.

------
drcross
Living in a van down by the river while soaking up that VC funded salary in
savings for a year or two has never looked so attractive.

In all seriousness San Jose is a reasonable temperature for 300 days of the
year I don't know why there isn't tent cities all over the area skirting the
laws to undercut the market.

~~~
shostack
It is actually hot as hell a good chunk of the year. It doesn't start getting
more mild until you are a bit further north in the Peninsula.

~~~
twblalock
According to Wikipedia
([https://en.wikipedia.org/wiki/San_Jose,_California#Climate](https://en.wikipedia.org/wiki/San_Jose,_California#Climate)),
the average high in July and August, the hottest months, is 81.9 degrees, and
the annual mean temperature is 60.5 degrees. I suppose you might think that
was "hot as hell" if you were from Scandinavia, but by California standards
it's a pretty moderate climate. It's certainly not as bad as many other parts
of the state.

------
wrong_variable
Whats a good portal to find remote jobs for fresh graduates who are not
interested in moving to the Bay ?

------
youngButEager
Easy to buy a condo in Silicon Valley on an Engineer's salary. For as little
as $350,000 you can have your own place. If you're a first time buyer you can
come in with 10% down; an engineer can easily save up $35,000 not long after
they graduate from college.

Here's one: [http://www.realtor.com/realestateandhomes-
detail/1060-S-3rd-...](http://www.realtor.com/realestateandhomes-
detail/1060-S-3rd-St-Apt-386_San-Jose_CA_95112_M20637-33621)

Once you buy the first property, you hold it for 5 years, sell it and move up
to a bigger place, single family home.

No one is expecting a newly-graduated engineer to buy a $1 million dollar
home. Who CARES what the big ones cost, these types of headlines are hyping a
scene that doesn't exist, "a million dollars! I'll always be a renter!" NO,
save up $$ for a year or two and buy that first condo. Then you're on your way
as a 'move-up' buyer every 5 years or so -- selling the old place, buying a
bigger place.

~~~
retube
Indeed. The average/median is a middling price. What's far more important for
first time buyers are prices in the lower quartile.

~~~
honkhonkpants
Unfortunately the price compression is incredible. You can buy a structurally
sound piece of crap for a million dollars, and you can buy an unsound piece of
crap for $995,000, in a bidding war with ten all-cash-offer parties.

~~~
Hydraulix989
Indeed, look at the Millennial Tower -- you can't draw any correlations there.
I'll never buy property in the Marina, even if I could afford it.

