I'm considering a job in California north of Oakland. The job would pay $120k, which seemed pretty decent until I saw the cost of the homes. It would cost at least $600k to buy a mediocre home in the area, something that just wouldn't be possible on the salary I would earn. I was particularly surprised at the home prices given that the median household income in the area is less than $50k.

For those living in California, do you know how people can afford such exorbitant house prices? It seems to me that it just isn't possible for the average person to move to California and buy a home. Am I missing something? I would really like to take the job, but I just can't see how I could buy a home and make ends meet.

2 jobs or else reside in a hotel.or commute.

Yeah two person incomes. It really is expensive to live in

California plus now we are in a horrid drought situation.

Although it is my home and I love it here except for the

high costs of everything and the god awful crowding, I am

considering moving to another state.

Me, too.

I live in No. Oakland close to Piedmont. Our whole family is considering relocating to the state of Washington because the cost of living has become just ridiculous.

Also, I have a mentally ill son and there is no subsidy available for him. We have been on the waiting list for five years for Section 8 and they told me next week I would have to wait until 2017 to "check again." He lives in a ratty hotel in downtown Oakland with bedbugs, cockroaches and fleas. $795 a month.

What people do here is commute long distances. It's the sacrifice they make so their families can have a home with a yard.

My daughter bought a beautiful home in Tacoma, WA, desirable north area for $250K, which is a nice downpayment here for a shack. She has a water view.

I love the neighborhoods here, but it has become more and more dangerous in Oakland. I worry for my son and feel like he needs to live in a safe place for his long term security.

I'm with you, OP


Kathleen Waters

PS. If you do need a realtor, my son-in-law lives in the Albany, El Cerritos area and he can help you with specific information. Email me at my login at gmail. :)

anagrammy Wrote:
-------------------------------------------------------
> Me, too.
>
> I live in No. Oakland close to Piedmont. Our
> whole family is considering relocating to the
> state of Washington because the cost of living has
> become just ridiculous.
>
> Also, I have a mentally ill son and there is no
> subsidy available for him. We have been on the
> waiting list for five years for Section 8 and they
> told me next week I would have to wait until 2017
> to "check again." He lives in a ratty hotel in
> downtown Oakland with bedbugs, cockroaches and
> fleas. $795 a month.
>
> What people do here is commute long distances.
> It's the sacrifice they make so their families can
> have a home with a yard.
>
> My daughter bought a beautiful home in Tacoma, WA,
> desirable north area for $250K, which is a nice
> downpayment here for a shack. She has a water
> view.
>
> I love the neighborhoods here, but it has become
> more and more dangerous in Oakland. I worry for
> my son and feel like he needs to live in a safe
> place for his long term security.
>
> I'm with you, OP
>
>
> Kathleen Waters
>
> PS. If you do need a realtor, my son-in-law lives
> in the Albany, El Cerritos area and he can help
> you with specific information. Email me at my
> login at gmail. :)

Thanks for the tip. If I head that way, I'll get in touch so you can put me in contact with your realtor connection.



Edited 1 time(s). Last edit at 08/25/2014 08:37PM by procrusteanchurch.

We both had good jobs and I thought we were committing to highway robbery. Those prices were next to nothing compared to now.

Those who buy now have often inherited fortunes from their parents. I know people with good incomes who are moving out of the state because they can't afford a decent house here.

You had to do it about 20 years ago. It's next to impossible now.

Funny you should ask! I read something on the subject this morning--read some of the comments too. Lots of food for thought.



http://www.nytimes.com/2014/08/25/opinion/paul-krugman-wrong-way-nation.html?hp&action=click&pgtype=Homepage&module=c-column-top-span-region&region=c-column-top-span-region&WT.nav=c-column-top-span-region&_r=0

Depends on where you want to buy a house. You're in a very high cost area. Most people commute even with two jobs.

In my area, housing is much less.

I get it! The house we bought in 1971 quadrupled a couple of times in value so when we sold it, we make a good profit.

supply and demand pricing

About ten years ago, we sold our house for close to $700,000 (we had bought it several years earlier for around $250,000).

This allowed us to pay off all of our indebtedness, and buy a 1960s-era mobile home that was very good for us for $70,000 cash. We liked the mobile home community, we have good neighbors that we get along quite well with (anyone not-so-good tends to move out fairly soon...for whatever reason the not-so-good is), and the park management has been increasingly good.

We are still here, and our monthly lot rent (including the new rent increase which will kick in October 1st) is under $700.00/month, with utilities (water, electricity, natural gas, and trash pickup) added. This varies due to season (winter is highest because of heat), but is always under $200/month, with summer WAY below.

If you consider doing this, BE SURE to RIGHT NOW contact Frank Wodley (P.O. Box 3774, Chatsworth CA 91313...Telephone: (800-929-6061) or (818) 886-6479...tell him where you are looking for a mobile home, and get his input. Park management can vary WILDLY...and the exact location of your mobile home community can make a HUGE difference in basic utilities: like access to water! He is the organizer/president of a state-wide mobile homeowners' group, and he has info on the entire state, and he will be able to tell you things you NEED to know about specific parks and their specific locations. For example: we have no problem with water because we are within the city limits so our water is guaranteed...but less than three miles away in a mobile home park that is JUST outside the city limits--they are in the county--and they have a TERRIBLE time with water, and all kinds of other practical problems because they do not have the safety measures, like rent control, that we have here. Anyone driving to both parks (they're about a walk away from each other) would have NO idea that the conditions could be so different just a few FEET over the city/county line--so talk to Frank Wodley, and if you're going to think about doing this, join ComoCal (or whatever they're calling it now; they just changed the name and I forget the new one), but it is the STATEWIDE mobile home owners' organization, and it is well worth the ten dollars or whatever they charge for the annual membership fee and the inclusion of MOBILEHOME MAGAZINE, which covers the legal and practical issues of mobile home ownership in the entire state of California. As for Frank's help...and JOIN ComoCal!!!)

This is a VERY practical solution to the home buying problem in California right now, and I can tell you that--from more than ten years experience--it WORKS.

But you HAVE to get the right mobile home park, in the RIGHT location, to take advantage of what is--by current California standards--a really exceptionally great financial deal that cannot be duplicated in any other way (most especially including renting a house or apartment).

Thanks for the advice. Not sure if there's a mobile home community in the area where the job is located, but it's with looking into.

If the drought keeps up (very possible) owners with no water service will be walking away from their mortgages due to lack of buyers. Sooner than you might think.

If the radiation in the ocean gets bad enough, coastal property will be really cheap.

I bought mine in 1998, a few years after a price crash. Though I had a good salary, I had to purchase a small, attached home in order to live in a good town--Rocklin, in the hills northeast of Sacramento. Houses are expensive here, and condominiums are popular. It may be worth it to commute. Look at smaller towns in the region. Good luck.

I have family in Rocklin. They love it there. :)

Two-person incomes.

Inherit your home/wealth.

Buy a house in the Central Valley.

Those are really about your only options. For all the fuss California makes about income inequality, the state has some of the worst income inequality of anywhere in the country, in large part due to how housing stock is managed and the Prop 13 backlash.

My father literally built the house himself, from the ground up, on weekends. He and my mother both worked; we lived on one income and bought building materials a little at a time with the other income. This was in the mid-1950's.

I SO wish that my mother had not sold the house. I lived out-of-state at that time and could not return home. I would give anything to have that property.

Last time I checked, the property had sold for more than $300,000.
No way could I afford to go back home now.

The company my husband works for is moving to the Bay area. He was offered a moving package but we chose to stay put. Those who are making the move are wondering how they are going to afford housing. He worked contracts for two years in the Bay area several years ago and we are very familiar with the cost of living in California, we didn't even live there, he commuted. No thank you.

Read your scriptures and pray. And tithe, yeah, don't forget that.

Unless you want to spend a good 4+ hours a day commuting to and from the Central Valley or pay out the ass for an outdated 40+ year old house, then you might want to look at renting. I know, it's renting but it still is a cheaper alternative.

Believe me, if my wife and I, who both have good paying jobs (both above median income) could buy a house here in the East Bay we would. But that would require a seemingly insurmountable down payment to be able to have a house payment that doesn't eat the vast majority of our income.

In my limited observations most people who own homes around here have owned them for a long time, back when housing prices were reasonable.

I'm at a loss as to how regular folk can afford the housing here.

We've been in the East Bay for almost five years, make really good money and can't come close to buying. Still living in an apt and the rent is more than a family member pays for his friggin mansion in a nearby state.

I grew up and lived in Southern California for 30 years before moving out.

To live in a nice neighborhood, you almost absolutely need to have two incomes. And by that I mean two really good incomes. In Los Angeles, a family income of $250K is very, very average and will only barely get you by. In Northern California, I think it is slightly more expensive. Remember that you may also need to send your kids to private schools at about $20K per year per child.

The desirable real estate is closer to the ocean -- even if it is miles and miles away. It is crazy.

And don't forget that California has the highest taxes in the nation. Expect taxes to go higher, too. Other items -- gas, utilities, insurance, food, etc. all cost more.

I love my home state but I am glad that I am out -- living in an area that is less crowded and more affordable.

I wish you the best with your decision.

Just wait until you see all the regulations and state taxes.

I live in Ca. and have never been able to buy. I am waiting for the chance to move out of the state. Things have gotten bad here....high cost of living, outrageous taxes, bad public school system, drought, and earthquakes! If I were you, I would stay away. Just sayin.

The Central Valley - mainly San Joaquin but parts of the Sac valley, too, are the main truly affordable areas. On a really clear day you can see the Sierras, ut the rest of the time it's
quite uguly. My nanny has a beautifully landscaped backyard (that miraculously doesn't use up all that much water, and has a cool pool with a watrfaull that's older than the hills but still attractive.that can temorarily) in the SJ Valley. even then, she and her husband both work, but they own it outright because they got a 15-year loan.

Generally, the closer up the valley one gets to the bay area, the higher the prices will go, becuase those are bedroom communities for bay area workers. My cousin lives in one because he's a fire-fighter with three days on and three days off. It's a single one-way commmute every three days.

I'm at the bottom of the central coast. Anesthesiologists are hard to find these days, so we have a locum tenens currently working for the hospital with which I'm associated. They live about twenty miles south of Fresno in a little town. His wife is a specialty RN, and they come as a package deal. They're empty-nesters. They live in a very nice apartment while they're here, and have a mansion in their little SJV town. they'd like to sell the house and just pack up and move here, but the hospital would get wise to it and he'd be paid as a house anesthesiologist and not a locum tenens, so ther would go his nice little apartment, and his daily rate of pay would drop.



They're considering selling their house, renting a cheap apartment somewhere to store some of their belongings so the hospital administration wouldn't accuse them of using the locum tenens apt. as their permanent residence, and investing their earnings so that they can move here eventually, or at least retire here. They figure a smaller place in a beautiful setting trumps a mansion in a flat, ugly area when you can see the mountains fifteen or twenty days out of an entire year.(But the mountains are glorious on those days when they can be seen. I think the Sierra Nevadas beat even the Rockies for sheer beauty.)

P.S. edited to add that I could not afford to live here except for the housing stipend offered to anyone who signs on with the hospital here and, more importantly, my wife's trust fund. We'd have to live in some place like Santa Paula and I'd have to commute. We need the clean air because of my wife's cystic fibrosis.



Edited 1 time(s). Last edit at 08/26/2014 12:41AM by scmd.

Yup, I rented an apartment while I was living in SF. Homes were incredibly expensive. It's a great area though. Favourite place that I've lived in the US...but you certainly pay for it.

A mortgage with a 20 percent down payment will run you less than $2500 a month.

If you can't afford that on 120K a year you have serious finaincial problems unrelated to the cost of real estate in california.

I'll say it again, it's incredibly easy to afford a 30K a year mortgage on a 120K a year salary. please see a financial advisor or something, this is really basic.

I live near sacto and I bought my home making 26k a year. There's just a lot of areas that cost too much

I live in california. When you get here you will first notice that they gouge you for ANYTHING AND EVERYTHING. I am not exaggerating.

Let's work backward with from numbers. $2,500 a month is $30,000 a year, right? Assuming an interest rate of 5%, that means a mortgage of $600,000 after the down payment. So what you are saying is that if someone can put down $120,000 in cash and assume a $600,000 mortgage, he or she can live nicely.

That bears scant resemblance to the situation in much of California. In Silicon Valley, an old home with 3 bedrooms and 2 baths normally sells for close to $2,000,000 plus repairs. The situation in San Francisco is almost as bad. If you go to San Jose, that same dump of a home would cost $1,600,000. In the Central Valley, the price for an old small home would drop towards the numbers you suggest, but you can't reasonably commute to San Francisco, Silicon Valley, or many parts of SoCal.

The real numbers for a modest family home, situated in a good area, are closer to a down payment of $400,000 and a monthly mortgage payment of $6,000 in interest alone. Actual monthly payments would be substantially higher for almost everyone, since they would be required to pay down some of the principle as well. So it would take a about a downpayment of $400,000 and monthly payments of some $7,000 for a modest home in the better parts of LA, in San Francisco, in Silicon Valley, and in East Oakland.

The other way to look at it is to use the realtor's rule of thumb: that someone should never take out a mortgage greater than five times his or her annual income. If a modest home is $2,000,000, then a "modest" income needs to be $400,000 per annum. These numbers are beyond most everyone's reach, obviously.