You Like It In San Francisco. You Really, Really Do! (Then Again…)

just make sure you see the footnote when interpreting the data. more detail from the article:
“The state groups San Francisco with San Mateo and Marin counties as one employment region when calculating job growth, and San Francisco has accounted for roughly 55 percent of new jobs in recent years.”
again, does anyone have the over/under on prop 98 passing? i doubt it will, but if rent control ever gets eliminated, that would also add to the housing stock in SF. don’t get me going on that topic.

meh.

Things are still pretty good in the tech industry, at least in my recent experience. Most of my tech based clients operate out of smaller office spaces and have a lot of off-site employees/contractors so it’s hard to evaluate from first hand observation if my perceptions are accurate. I’m seeing a lot more vacancies in the commercial spaces in the FiDi. Does anyone have any info on how strong or weak the lease prices for commercial office space are in the city?
“again, does anyone have the over/under on prop 98 passing? i doubt it will, but if rent control ever gets eliminated, that would also add to the housing stock in SF.”
If the people were really serious about releasing/adding to the housing stock, they would put the abolishment of rent control and Prop 13 into a single ballot initiative and let them stand or fall together. Until then, each interest group (owners vs. renters) will claim it’s an attack on their livelihoods and keep rolling out the poor widows who can’t afford a rent increase or fair market property taxes. But the odds of that happening are about as good as a House Of Bijan boutique opening in the Tenderloin…

“Doesn’t the data indicate that housing units have outpaced jobs from 2000-2007?
It also shows that a lot more jobs left from 01-03 than that have been added back. 03 alone lost more jobs than were added in 2006.”
Not sure why the job losses (which were area-wide and not limited to SF on the chart) would be relevant to what’s going on now (in terms of the housing market). Jobs are being added to the area and the population of SF is at an all-time high, both suggesting that demand for housing (broadly defined to include renting and owning) is not going anywhere.

I’m curious to know what the percentage of the change in population is new college students. Most major colleges in San Francisco are expanding like USF, SF State, Academy of Art, etc. Great short-term high paying tenants in rent controlled areas!

“Jobs are being added to the area and the population of SF is at an all-time high, both suggesting that demand for housing (broadly defined to include renting and owning) is not going anywhere.”
mk92,
No way dude. Spencer [resident great sage] said the S.F. condo market won’t bottom until 2010 [apparently his cat told him so] hence your observation can’t possibly be correct.
On a serious note, while the S.F. real estate market has and may continue to experience some downside, the aforementioned data does suggest that talk of extreme housing supply imbalances [often cited on SS] that would lead to 20% corrections in SFR/condo prices is still a bit far fetched.

“Any idea then why inventory is at an all time high compared to the past couple of years and sales volume at new lows?”
Yes.
People are anxious about purchasing real estate due to all the doom and gloom on the subject in the press.
Also, the article references “housing” in general. Its apparent from the recent rapid rise in rents that many of these new San Franciscans are choosing to rent and putting pressure on that side of the market.

That is exactly right. I think to some extent people are not buying because of the tightened lending from banks, but a lot of people with the money required to buy are renting instead. Anyone who is making an investment in real estate now should be able to see that prices are coming down. So why buy now? One example of this is people not buying in new developments, where developers are giving away huge incentives and accepting low offers.

“Anyone who is making an investment in real estate now should be able to see that prices are coming down.”
This is what people think. What they see, though?

“Real estate inventories are up *because* sales volumes are at all time lows. And the reason for low sales is dramatically tightened lending standards. Traditional (non-TIC) properties require credit scores over 700 and 15% down with full documentation (that means no loans from mom and dad for down payments) this makes it much harder for people to buy, lowering demand for real estate. At the same time rents have gone through the roof. The 30 day average for a two bedroom apartment broke $3000 according to rent-sf.”
Bingo. Easy loans explained the housing prices of yore. Guess what loans aren’t going to get that easy again with all the losses wall street is taking. What does that do going forward?
The rents are high because sellers think they can cover their over inflated mortgage payments by asking for stupid rents. The question is how many of those $3000 2 bedroom rentals are being filled up.
“The demand for housing is there, but in the short term the credit crunch is putting a lot of downward pressure on the market. Real estate prices are probably artificially high, but we can’t really know how much. But the low sales of homes is not related to demand for housing, but rather the supply of financing”
The credit crunch isn’t temporary unless you consider then next 3-4 years to be temporary.
Housing prices are a function of money. The demand part of the equation is always about how much money the buyer has to spend. The population can reach a million in SF but if money is tight house prices are going down.
I don’t think the current rents in SF are sustainable especially with food and gas prices going through the roof. Landlords can ask whatever they want but they most probably won’t get it. There is a cap on how much rents one can afford.

Actually, I think sale prices will stabilize and rents will continue to go up. We’re in for some serious inflation thanks to the Federal Reserve and Bush’s deficit spending (which by the way is the highest it has ever been in both nominal and inflation adjusted dollars — even higher than during WWII).
So housing prices will stabilize … inflation will erode our buying power … and those “comps” you see with flat prices over the next two years will actually represent a decline of ~10-20% since 2010 dollars are going to be a whole lot less valuable than 2007 dollars.

Buyer-
The Hayes, 177 Off Third, The Potrero, and 733 Front to name a few. 177 Off Third offered $20,000 in incentives and two years paid HOA for 2 bedrooms. The Hayes is now offering $20,000. I received a call yesterday from one of the agents at Hayes telling me the developer has released a new incentive (havent returned the call yet to see what it is). The Potrero offering no mortgage payments for one year. I also saw in the Chronicle a unit sold at the Soma Grand for $490,000. The units listed at Soma Grand are listed beginning at $575K. This is the stuff I was referring to.

pica1986 and San FronziScheme : from where I sit the tech scene looks different. Lots of office buildings are vacant. Even entire research parks look like ghost towns.
Tech salaries are drifting downwards in real terms. Average salary increases are at about 3% which doesn’t even beat inflation.
If you integrate the middle chart, you can see that we are about 1/3 of the way through replacing the jobs that were lost in the dot com bust.
Don’t get me wrong, tech *is* booming : in Shanghai, Bangalore, Seoul, and Kuala Lumpur. Not so much in the SF bay area.

“The question is how many of those $3000 2 bedroom rentals are being filled up.”
I am going to guess that you haven’t tried to find a rental lately. Its UGLY out there, We tried to get into a few different 1br places at around $2k and each one had 30 plus applicants. I assume you are right, rents can’t go up forever, there must be some kind of limit to how much people even CAN pay.
But, I think Greg is right…serious housing decline might actually be hidden behind high inflation.
So you could buy a house today, it could lose 30% of its real value over the next five years but keep a steady nominal value (or even increase a little).
Which is actually not so bad if you own your home to live in it (you won’t be upside down and you will be able to refinance), but if you are investing clearly something else would be a much smarter place to put your money.

Greg said:
Actually, I think sale prices will stabilize and rents will continue to go up
I’m not sure about this. Rents can only go up if people can afford the payments based on their salary. $3000 rents are pretty darn high… That’s $36000/year just in rent! how many people can afford that?
it’s not like houses, where you can get a teaser rate mortgage…
tipster said:
And those of you who didn’t notice that this “study” had SF area GAINING population — by 18,000!– from the peak of the dot com boom to the bust, shame on you
I was wondering about this too. It seems wildly implausible that SF gained population from 2001-2003.
i’d like to see the methodology of this study.

1.5% YOY population growth isn’t bad, but it doesn’t come close to matching Brentwood’s 4% population growth during the same period. Where is the chorus of posters who routinely talked about the Contra Costa real estate market tanking? The demand for housing in Brentwood is not going anywhere.
Spencer – your cat is the best post of the thread, by far. That’s a classic.

“And please don’t underestimate the intellect of my cat. He was smart enough not to buy at ORH, even though I’m sure he could have qualified for a no documentation loan and put 0 down.”
Spencer,
So was your cat also you advisor when you threatened to put in a bid of $515k for the bank owned Beacon foreclosure, Unit 957, listed at $644K? –
[https://socketsite.com/archives/2008/05/bank_owned_with_big_windows_at_the_beacon_260_king_957.html]
I remember the rhetoric … I’ll do it .. I really will. So, how did that one work out for you?
While I’m not touting the unit by any means, according to SS posters it sold at around $700K. That’s $515K verus $700K. I guess your perceptions of reality might be just a wee bit wide of the mark. To quote Bob Eucker from the movie Major League “just a bit outside”! However, I’m sure your two year projections [SF condos bottom in 2010] are spot on … you genius you!

Milkshake,
Global competition sure puts pressure on salaries, but people are still hard to find. About offices being empty, I agree too, but that doesn’t mean business is bad or people are leaving.

@Milkshake of Despair, I’ll take your assessment over mine. I work for myself and have remained pretty busy, but that reflects only a minuscule fraction of the overall picture. I haven’t been in a corporate environment much less near an office park in years.
I’m with jd as far as anecdotal evidence of people moving away. Some are due to job loss in the financial sector but most of the people I’ve encountered that are moving out are due to the high cost of living. The salaries here haven’t increased in pace with the cost of housing , etc….
I’m not sure how much higher rents can go with stagnant salaries and loss of discretionary income to higher food/transportation/utility costs. I guess people could compensate for increasing rents if they are willing to do things like take on additional credit card debt or decrease their standard of living (i.e. more residents per unit, 2nd jobs, Ramen noodles…). Most people I’ve met who are more than 5 years out of college aren’t willing to go that route. But who knows, times may have changed more than I know.

“I am going to guess that you haven’t tried to find a rental lately. Its UGLY out there, We tried to get into a few different 1br places at around $2k and each one had 30 plus applicants. I assume you are right, rents can’t go up forever, there must be some kind of limit to how much people even CAN pay.”
Could it be that there is too much demand for the 1 br at around 2k because the 2 brs are too expensive at 3K?
I find it hard to believe that some one would pay $3000 for a 2 bedroom instead of just moving out o f the city and finding some place cheaper or downgrade to a 1 bedroom.
But people do crazy things. If the rental market is on fire in SF I am amazed.

“I agree too, but that doesn’t mean business is bad or people are leaving.”
Well, let’s check into that second part of that statement. There’s a quick and dirty way to see if more people are leaving than coming. You go to Uhaul.com and get one way rates from city A to SF, and from SF to city A. The rate from SF to Tulsa for the largest size truck is $3,257.
They will make the rates cheaper for the city from which they are losing trucks, and more expensive to the city to which they they have too many trucks headed.
If SF is gaining population, the rate to SF from Tulsa will be more than $3,257, if it is losing population, the rate will be less than $3257, and if the population is stable, it will be about the same. This isn’t a perfect indicator, but it gives you some idea.
Oh, yes, how does the rate to SF compare with Tulsa’s $3,257 rate? The rate TO SF is $931. That tells me more people are leaving SF than coming. It tells me that people will leave an area to raise their standard of living. Tulsa, I am quite sure, is doing very well: lots of opportunity for a young person.
But let’s look at an area that is not doing so well: Sacramento. San Francisco to Sacramento: $226. Sacramento to SF: $158. More people going to Sacramento than the other direction.

Read the report:
http://www.uhaul.com/pr/publication.ashx?id=19004

Nice try tipster. Did you think to account for the fact that relatively fewer San Franciscan’s have cars? I know plenty of people that had a car when they first moved here but once here ended up selling it. Ergo, they used their own transportation to move here but use leased transportation to move out. This is borne out by the link to uhaul’s actual data.

It would be interesting to see the statistics as to how many of you are self made men or women, and how many of you don’t know what hard, aggressive work is and were given everything and born with a silver spoon in your mouth. I think the correlation of this to certain comments would be quite telling.

“The general rule of thumb is that a manageable housing cost would be 30% of your income. That means to “afford” that $36k in rent for a 2 bedroom, the total tenant income would need to be $120k. In a 2 bedroom, that means both tenants would merely need to make $60k each. There are plenty of people that make that much (and many that make much more).”
Does your magic math include things like taxes?
Rent is paid post taxes. A $120K income after 28% taxes becomes 86.4K which makes 30% of that 26K. That means a couple earning 120K would be able to afford $2160 in rent at 30% of after tax income. Nice try!

RE: akrosdabay and moving out of the city to avoid $3000/mo. rent for a 2/2, we were paying close to that at Archstone San Bruno. Most nicer, newer places are cose to that. Sure there are lower rents out there but they are not so nice.

Just to add to the previous point.
3000K a month would be 41% of net income with a 120K gross!
The rule is 25% gross and 35% net. Even then 120K is not enough to afford a 3K rent.

“RE: akrosdabay and moving out of the city to avoid $3000/mo. rent for a 2/2, we were paying close to that at Archstone San Bruno. Most nicer, newer places are cose to that. Sure there are lower rents out there but they are not so nice.”
I seriously doubt any of the SF rentals going for 3K are as nice and offer the same amenities as your apartment in San Bruno. If you looked at a similar luxury apartment rental with a gym, pool and spa etc. You’d easily pay $4000+ in SF.
Most of the units in SF don’t even come with parking.
You are comparing a top of the range rental community to average places in the city. Apples and Oranges.

that is 16 postings that were posted today

Here’s an article from realestate.msn.com that says your rent should be “25 percent to 30 percent of gross income, according to federal housing guidelines”
http://realestate.msn.com/rentals/article.aspx?cp-documentid=25312

News flash: its really expensive to live in SF. Always has been, always will be
This is a half truth. True, it’s always been expensive to live here. but it’s never (or rarely) been this expensive.
in the end, that is the crux of the problem for SF real estate
people of my parents age always say “yeah, when we were young we also had to stretch into a place and we had to scrimp and save too… so can you” but when they bought the prices were high but attainable.
now the prices are simply out of this world. even comparing to 1997 to now the prices are night and day.
rents are limited by income. income in SF just isn’t high enough to support nosebleed rent levels.
I’m just wondering what the mythical rent is where even San Franciscans balk?
$10,000/month?
$8,000/month?
$4,000/month?
$2,200/month?

From the msn article.
”
How does rent figure into the mix? Usually, it’s the largest slice of the monthly budget, consuming some 25 percent to 30 percent of gross income, according to federal housing guidelines.
Problem is using that figure may get a tenant in trouble. Luxuries unheard of a decade ago, such as laser printers, cell phones, palm pilots and laptops, are taking ever-larger slices of the pie. So are the accessories, such as high-speed Internet connections and deluxe surge protectors for $199. Factor in batteries and rechargers, combine car payments and the price of gas—and renters may find themselves driven into a financial corner.”
……………..
“Next, realistically assess your steady annual gross, or total income. Bear in mind that gross income is a somewhat mythical number found on paychecks, as in “now you see it, now you don’t.” The actual dollar amount received, called “take home” or “net pay” is what’s available to spend after deductions are taken.”
Looks like the article you posted is agreeing with me. 30% gross income for rent is seriously broken in terms of financial prudence. 25% seems more reasonable and would yield a $2500 cap for a 120K income, which I still think is too much.

Perhaps it’s worth revisiting:
Bay Area Rents Surge, But Housing P/E Ratio Remains Out Of Line

Regarding my previous post about Archstone apartments, based on their web site, they charge $3265 for a 2/2, 1044 sq. ft. in their South of Market building (I don’t know about parking or a pool there), and $2630 for a 2/2, 1066 sq. ft., in San Bruno. Their San Mateo location has 2/2’s from $2850. Point is, based on the available rental stock which would be considered reasonably nice, it is not that much more expensive to rent in SF vs. the Peninsula. East Bay is less, granted. This is just a data point from an actual person who moved to this area recently.

Fine. I’ll split hairs with you.
We’ll go with 25% as the reasonable level for rent. That just means that those individuals need to make $144k, or $36k each. That’s still just an entry level receptionist or admin position. If you want to go big and have your own bedroom, then you need to make $72k on your own, which is what an entry level Sales job would pay.
The last 3 people I hired are all straight out of college, working in their first cube environment, came to SF from out of state (Utah, Arizona, and Virginia), and make more than this amount.

I’m sure that paying $3200 for a place with no laundry would be ridiculous for a lot of people, but many people have always put up with a great deal of hassles to live in SF. They won’t put up with it in San Bruno or San Mateo because those towns, while perfectly inhabitable, are also extremely fungible.

The truth is, most people who live here pay more than 30% for their housing. I think the average in the Bay Area is more like 40%. Is this stupid? I think people should be able to spend their money however they like, even if certain posters don’t approve of it.
Seriously, if you don’t want to live here, move somewhere else, but don’t then spend all day on a San Francisco real estate blog complaining about what other people decide to do. It just makes you look… well, well you know. Sour grapes and all that.

I pay 12% of my salary for rent and personally couldn’t imagine paying much more. How do people save and live when they are spending so much on housing?

How do people save and live when they are spending so much on housing?
Since salaries are so much higher here, you can spend a larger percentage on housing and still have just as much discretionary income.
If you are making a good salary, spending 12% on housing and still can’t imagine how you could live on less, then you must have a lot of frivolous spending. I got rid of my car a long time ago: that saves me $6-7k/yr. This adds up over time into quite a bit of money.
What do you spend the other 88% on?

just as an observation it always seemed to me that people could afford higher rents here in part due to apartment sharing. I’ve never lived in a city where non-students with good paying jobs share apartments as much in S.F. A $3200 2/2 looks different when 2 people are each paying $1600 and probably getting a bigger and nicer place than they could afford on their own.

I’m sure most of you have seen this website before, which shows anecdotal rent data based off craigslist listings:
http://mullinslab2.ucsf.edu/SFrentstats/data/time.html
(part of a bigger site: http://mullinslab2.ucsf.edu/SFrentstats/)
ex SF-er:
What percentage of San Francisco renters are in a rent controlled apartment and began renting before the tech boom? Someone who can’t afford market rent has a very strong disincentive to move, so renters on the market now may be biased toward the ‘above the median income’ side of the distribution.

“How do people save and live when they are spending so much on housing?”
I would venture to guess that a good portion of the people who are spending a large chunk of their incomes on housing are living just fine, but not saving. I know plenty of people who are willing to gamble with the short term dangers of engaging in such financially risky behavior(i.e. not having money for life events like a job loss, unexpected health expenses, etc.) to live in this city. Unfortunately, the gamble rarely pays off over the long term, but to each his or her own. Hopefully their families are able to bail them out, but more likely their fellow citizens will wind up paying in the end.

“Paying 40% of your 200K income for rent/mortgage still leaves you way more discretionary income than paying 25% of you 50K income living in Bumpkinville. This is the gist.”
So the “rich guy” gets to pay 80K a year for his basic need for shelter vs. the poor Bumpkins of Bumpkinland (I’m assuming that’s anywhere but San Francisco or NYC?) who shell out 12.5K a year. The sad thing is, if you took a tour of what the average Bumpkin can buy for 4X his 50K salary (or 200K, the median price in the U.S.) vs. Stan ‘n’ Fran Cisco’s 800K 2 bedroom condo, you’d wonder who was better off, proximity to great restaurants and homeless people notwithstanding.
(One could argue that as one’s income increases, you should be paying a smaller percentage of income on housing. Unless you are afflicted with House Lust, which is really what this is all about.)
But the real killer is that the Bumpkin’s are paying a few thousand dollars a year in taxes, while Stan and Fran are kicking up to the tune of 30-40 large and probably smacking against the AMT. So in the end I have to wonder how better off we really are out here, competing for scarce resources against other people with big salaries.

Spencer, you are spending 101% of your income. Like most of the country 😉

With non documented citizens (illegal immigrants) living in San Francisco, I would bet $100 that our population is already well over 1,000,000. Too bad this can’t be official, I long for the day when I can see the big mil on the city limit sign coming in on the bay bridge!

According to the potholes I have encountered since 2000 I would have to agree!

“Spencer, you are spending 101% of your income. Like most of the country ;)”
hanks for pointing out. I was wondering why i paid 3 Non-sufficient funds fees last month. Maybe I will ask my landlady to lower my rent so i can get back to 100%.

Is there any information showing how many renters in San Francisco have lived in a rent controlled apartment for more than 5 years? Everyone is going on and on about how expensive and how rich San Francisco is, but I sometimes wonder if this is reality. I know of many many people who are paying well below market value for rental housing in San Francisco. This is an artificial housing market created not by too much wealth, but by regulations protecting renters, and blocking new housing construction.

Thank you ex SF-er. I have posted this before, but my firm actually pays only 10% more for positions in San Francisco vs. our Chicago office. I can buy a 2bd prime neighborhood with parking condo in Chicago for 300k, so if I make 120k in Chicago vs. 140k in San Francisco, I would still be able to make my money go farther in Chicago. I bought in S.F. in 1991, and my 2bd condo in the Marina was the same cost as what I had sold my 1 bd condo for in Santa Monica that same year. Believe it or not, I got more for my money in San Francisco than westside L.A. in the early 90’s. San Francisco has not “always” been more expensive than everywhere else.

ex-SFer, are you getting old info about lawyer salaries? That info was true about 10-11 years ago, but not anymore. SF/SV is still one of the country’s better legal markets for salaries (NYC’s top tier firms like Watchell are a different story, but they always have been). My old firm pays those worthless little first years $160K, plus bonuses.

How do people save and live when they are spending so much on housing?
I think you answered your own question. Since you are spending 12% on housing and saving 30% (and giving 6% to charity!), you can obviously save less. Most people do not save that much.

ex-SFer, are you getting old info about lawyer salaries?
probably. I don’t know any new lawyers. I was basing it on lawyer salaries offered to the Stanford and Hastings Law grads that I knew in 1998. that’s obviously 10 years old so I could be way off.
The doctor stuff is accurate. doctors make squat in SF.
==
No, food is the same or cheaper here, if you shop the farmer markets and avoid going to expensive restaurants.
you are totally wrong. I shop for food in SF as well as 2 midwestern cities at least every 2 months (I travel a lot). Food is substantially more expensive in SF for almost all categories of foods. it’s not even close. The farmer’s markets in the midwest are significantly cheaper than the SF farmer’s markets.

Public schools in california aren’t as good as many in the east coast. The only school district that is even considered good at a national level is Santa Clara because of Cupertino.
Ok, you must be joking or uninformed here. First of all, there is no “Santa Clara” school district. There is Cupertino Union school district, which is ONE of the many phenomenal districts in the Bay Area. There are top-rated (nationally) districts on the peninsula, in the South Bay, and in Marin. Also, for a big city school district, SF actually stacks up pretty well nationally – it’s that it is soooo poor compared to districts in the suburbs that people decry it.
Next – guys, fruit and vegetables are cheaper here than almost anywhere else. I’m always amazed at how much it costs to buy an avocado or some grapes in other places in the US. Prices are absurd. Other food items are more here, sure, but overall it’s not a huge amount – unless you’re shopping at Whole Foods here compared to Kroger elsewhere.

“Ok, you must be joking or uninformed here. First of all, there is no “Santa Clara” school district. ”
Neither. I was thinking of a Forbes article and they mentioned Santa Clara county. I meant to say county not district.
http://www.forbes.com/2007/07/05/schools-taxes-education-biz-beltway_cz_cs_0705schools_2.html
“There is Cupertino Union school district, which is ONE of the many phenomenal districts in the Bay Area. There are top-rated (nationally) districts on the peninsula, in the South Bay, and in Marin. Also, for a big city school district, SF actually stacks up pretty well nationally – it’s that it is soooo poor compared to districts in the suburbs that people decry it.”
There are only 4 CA Bay Area school districts/counties/whatever in the Forbes article and SF is not even in the list. Texas has 3 in the top ten and 4 in the top 15.
“Next – guys, fruit and vegetables are cheaper here than almost anywhere else. I’m always amazed at how much it costs to buy an avocado or some grapes in other places in the US. Prices are absurd. Other food items are more here, sure, but overall it’s not a huge amount – unless you’re shopping at Whole Foods here compared to Kroger elsewhere.”
Gee do you want to cherry pick some more produce that is grown in or closer to California to make it look cheaper here.

“As someone who lived in Houston for several years, this statement is completely false. No matter where you live in Houston, you must have a car. I owned a place for several years in one of the most dense parts of town. If you did not own a car, you would be extremely limited in your movement, and very isolated.
”
What about the other cities I mentioned Boston/NY/Chicago? I consider it a requirement to own a car in SF. NY public transit blows away SF public transit in efficiency, coverage and price, since people like making comparisons to Manhattan. Even the T in Boston is better and cheaper than the sorry excuse we have called BART and Cal train.
Face it people SF is not that unique compared to other major cities especially in how one can live cheaper here if they made a few sacrifices. Those sacrifices go a farther in other cities.

@akrosdabay,
When you have a “unified school district” with dozens of schools, of course you won’t be ranked on top.
However, if you take a look at this article:
http://www.newsweek.com/id/39380
“American’s Top Public High schools”
9 SF schools are on the list (which is the top 5% of all public HS).
Most of them have index just above 1, so they are close to 5% instead of the top 1%. However, SF schools are not as bad as some people think.

akrosdabay,
So, shouldn’t you be buying in Houston instead of hanging out on a SF RE blog?
Just curious

“9 SF schools are on the list (which is the top 5% of all public HS).
Most of them have index just above 1, so they are close to 5% instead of the top 1%. However, SF schools are not as bad as some people think”
There is only 1 in the top 100. 1 in the top 400. The other 7 are bellow 1100/1300. So people pay the most expensive prices for houses and rents so that their kids can attend schools that are in the middle or at the bottom of the pile in the top schools.
If someone is paying so much to live in a place the schools should at least match.
Don’t get me wrong I’d rather live in SF than in Houston but I am amazed at what people will justify the obnoxious rents/house prices by pretending that SF offers the best of living in the US.

The rule is 25% gross and 35% net. Even then 120K is not enough to afford a 3K rent.
Where did you learn this “rule”? Most Californians pay more than that.

Bring on $8 gasoline. We’ll see who comes out on top. Within 15 minutes on foot for me is work, food, world class entertainment and play. While not unique to SF, it’s still pretty damn unique and you would pay a comparable amount for housing in the few places that give you these as well.

akrosdabay,
I assume you are not married and don’t have kids yet.
You know when you get a family, the cost will spike. Shouldn’t you be considering moving to Houston right now?

“Bring on $8 gasoline. We’ll see who comes out on top. Within 15 minutes on foot for me is work, food, world class entertainment and play. While not unique to SF, it’s still pretty damn unique and you would pay a comparable amount for housing in the few places that give you these as well.”
$8 gasoline will make everything expensive. Inflation affects everyone. Your food costs go up too. Most restaurants are already considering raising prices. A) because credit card companies have increased processing fees B) deliveries surcharges are increasing due to gas prices C) Produce and Dairy is going up in price.
Those that commute out of SF to work in where the real tech jobs are will leave in droves. Guess what that does to house prices?

“Those that commute out of SF to work in where the real tech jobs are will leave in droves. Guess what that does to house prices?”
And, those that commute into SF (where most of the lawyers, bankers, etc. work) will move into town. It works both ways. Although people commute in all different directions, there’s no doubt that more people live elsewhere and come into SF to work than live in SF and work elsewhere.

“An overwhelming majority of San Franciscans send their children to public schools, which are actually pretty good here.”
That’s just ignorant.
I was too lazy to find something ultra current, but here’s an article from 2006 from SFGate (http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/05/31/MNGJIJ50T41.DTL).
The key part:
29.3 percent of the city’s school-age population went to private or religious schools. About 10 percent of children nationwide and 8.7 percent of those in California attend private or parochial schools. Marin County has the second-highest rate in the state at 18.7 percent, followed by San Mateo at 15.4 percent and Napa at 13.4 percent.
Why you ask?
Well, many people choose private schools because the public school system is unpredictable. You may live directly across the street from the best school in The City but it is not guaranteed that your children will attend that school. In fact, you may not get into any of the 5 schools on your selection list! Gotta love the “diversity index”!

silly: Seems to me that 70.7% would still be an “overwhelming majority.” The public school system is definitely not for everyone, and you really have to do your diligence, but it can work (at least at the elementary and high school levels — the junior highs are a mess).

“Those that commute out of SF to work in where the real tech jobs are will leave in droves. Guess what that does to house prices?”
http://www.calmis.ca.gov/file/Commute-Maps/SanFrCommute.pdf
Far, far more people commute into The City than out of the city, FYI. This is fact.
$8 gasoline will strenghten the argument to live in The City and thus increasing its population more than anything. Go ahead and move to where the “real tech jobs” are. Leave, bye! LOL! I’m fine living, walking, working, dining, shopping, and playing right here in the City by the Bay. Nuff said!

can you guys please stop with the “if you don’t like it, leave” rhetoric? You sreally sound like Bush with the If you are not with us, you are against us” rhetoric.
Lots of people have things they don’t like about SF living and should be free to express it. Chances are if they are living here, they have more things they do like about it.
Personally, I love being able to walk to where I want, but i have to ahve a car because I work on the peninsula. This siutuation works well for me and $8/gallon gasoline wouldn’t really change that (for me). Although I did ride my bike to work on Tues and Wed and surpringly found out that it is faster than taking the bus, bus, bart, bus walk combo that i would need to do with public transit. Cars will always be a part of SF and there are those of us that are happy about that and there are plenty who are not. personally as an avid biker who rides across the GGB 3-4x per week, i sometimes wonder why i am not charged to do so (maybe $1) and why i don’t ahve to pay to register my bike and get a bicycles license. These would all provide revenue to the city and put accountability on bikers. I actually support all three of those. there are too many bikers who don’t seem to follow the rules.
I digress. anyway, the point is that people choose SF over suburbs for many reasons, but there is a tipping point where some people will leave as the price to live here remains high relatvie to our very close neighbors where prices are dropping fast.

Interesting thread!
I too find annoying the “love it or leave it” fascism (cowardly disguised as something more-noble, as usual).
I also respectfully disagree that “Human nature is that if we don’t like a place, we leave” — there’s a lot of friction in that decision. In fact, my experience has been folks will try to “fix” their current situation before moving on (job, relationship, home), and that’s a pretty good thing (within reason). Taken to extremes, it’s being “in denial”. Actually, isn’t this well-understood behavior?
One other quick point: fuel costs affect city prices significantly, and you can’t justify SF’s current premium over (closely) neighboring areas with presumed fuel/transport savings alone. But why should it matter, if you like it, and can afford it?

“Human nature is that if we don’t like a place, we leave. If we stay (especially with the high cost, bad education, as some people claims), it only means we like it, despite what we may argue in public.”
Another black and white “Bushism” imho. i don’t think life is so black or white and decisions like this are not easy to make. i personally dislike many things abut SF, but i happen to like many more things, so the scale is tipped towards liking it. Human nature doesn’t have a lot to do with reality when you ahve a mortgage and kids or a nice rental and a nice job and friends.
you can like something in general and still argue about the specific things you don’t like. That’s how we make things even better as a society.

silly,
That percentage has more to do with the overwhelming wealth that exists in SF. Wealthy people are more likely to send their kids to private school. If we have more wealthy people, we will have more kids being sent to private school. How is that hard to understand?

You are correct Justin. But keep in mind, San Mateo County is expensive as well. Santa Clara County is expensive as well. Marin County is expensive as well. This isn’t just a “city” thing. That’s four of the 20 most expensive counties in the US all next to each other. San Francisco simply happens to be one.

San Francisco public schools are notoriously terrible for white kids
Have they recently improved?
My uncle is sending my little cousin to a public elementary because they have markedly improved but I doubt he is considering public HS
I know a few white kids in my age group who went to Lincoln but other than that friends tell me literally they can hardly recall more than a handful out of a student body of hundreds
Just curious is anyone actually has experience with this locally. I’d love to hear its all better now. I do know one woman who was sending her white kid and she said things were improving
Personally if I stay in SF if I have kids I would just assume private HS is the only way unless they get into Lowell

Lastly, it’s hard to “compare” these areas.
(warning, the following are generalizations):
The SFer who makes $200k/year likely lives in a modest 2-3BR condo or apartment. They may have really stretched into a small 3BR house. but they can walk to a lot of fun places, and there’s lots of things “to do”. however, if they buy they will be a little stretched thin in many cases. (I know I was)
A person who lives in Chicago will make slightly less, and have all the same amenities. to many people, Chicago has much more to do and is more vibrant than SF-but that is arguable. Depending on neighborhood, they will live in a much nicer place. Likely a large condo/apartment or more likely a rowhouse. but they have to deal with winter. (and that’s big for a lot of folk)
A person in Atlanta will make less yet again (a professional might make maybe 20-30% less than a SFer or so) but Atlanta isn’t as diverse. that said, it’s become a quite a large city and there are very few things that it does not have (I dislike their arts scene). they would have to drive to those things however, and search them out. They would likely live in a large 4000-5000 sq ft house, or in the metro area (like Midtown) they’d live in a nice 3000 sq ft home. if in midtown there are lots of places to walk to.
if you were in Houston, you would live in a gated community. you would live in a McMansion. You would drive everywhere. Again, less culture. but you could fly anywhere you wanted anytime because your huge house would cost almost nothing. also taxes are rock bottom (no income tax as example)
If you were in small town USA you wouldn’t make 200k/year… but you’d probably live in a pretty decent farmhouse or whatever. you could probably walk everywhere because there is only one stopsign in “town”. I’m guessing you’d live a pretty sedate life. there would be little to no culture but you’d know your neighbors and everybody else. for better or worse you’d be close knit.
so it’s really hard to compare. I live in flyover land now. but I go to a Broadway show more than my BIL who lives in Manhattan. And I go to the Ocean all the time, more than 99% of San Franciscans (let’s be honest, when was the last time you went to the Ocean?). And I travel all over the world all the time. it’s just a quick flight and I have a ton of disposible income I didn’t have in SF.
I “save” $3-4000/month every month by not owning an expensive house. yet I can walk to more things (and more diverse things) than can a person on 24th in Noe Valley
because I was so stretched in SF I found I didn’t do a lot. Here, I go to the opera, the theatre, out to the fancy restaurants, I take fun and interesting trips, etc.
but the winters are lonnnnnnggggggg. (especially this last one) that is a huge negative. did I say it’s a huge negative? huge. actually, surprisingly to me, I found it has been the ONLY negative to leaving SF (not including leaving friends/family)
it’s all a tradeoff.
SF is uber great. one of the nicest vacation cities in the world. it’s also very expensive. If housing were 50% of where it is now, I would likely move back. But I doubt that will ever happen so instead I just visit a lot (4-5/year) and visit socketsite to see what’s goin’ on
but it is humerous to see how misinformed y’all are about places non-San Francisco. I was once like that too… I had forgotten anything existed east of Berkeley

oops. good catch. I had written it in my first draft and then i must have edited it out.
my car insurance was about $1k/year. so about $83/month.
that bumps my estimate to $340/month using today’s gas prices. still in my range of “300-400/month” to operate.
there were I’m sure a few more incidentals, but not many. I also did one routine maintenance at 60k miles I believe… but I don’t remember how much that was.
There were also some car washes, but I’m not a carwash guy. I probably did it 2-3 times a year for $10.
(I’ve had my current car for 6 months and have washed it once)

The cost per mile the IRS will allow for operating a car is 50.5 cents. The average car driver puts 12,000 miles a year on their car. I am sure you can do the math. The IRS is not known for being over generous about these things.
As a double check on their math, you can go to Edmonds (a pro-automobile site):
http://www.edmunds.com/apps/cto/CTOintroController
Plus in any car you like and see where the numbers take you. For some reason automobile drivers often wildly underestimate their ownership costs. They often underestimate their total commute time, but that is another topic.

You probably need only one oil change a year. Don’t believe that hype. (And premium gas is a myth too. According to a chemical engineer friend of mine only older V-8s and the like will benefit.)

wow… according to that Edmunds site I will have to pay $800/month for my car. we’ll see… that seems wildly high to me.. but part of it is that they assume 15k miles per year… I’ve never driven anywhere near that.
some of their estimates seem good to me, some I know are wildly off (FOR ME, not in general)
-I agree with their depreciation figures, and in fact my estimate of depreciation above was MORE than their estimate
-my insurance is nowhere near what they estimate, they’re high by over 20% (but it would likely be a good estimate for a high cost place like CA)
-my gas bills are nowhere near either. mine are $800-900/year less than they estimate. (again, because I drive 1/2 of what they assume)
-I’m not financing it. (but there is always that pesky “opportunity cost”)
-I am worried about the maintenance… but I certainly hope that it doesn’t cost $1000/year to maintain this thing. if it does I’ll sell it. that’s why I sold the Passat. again, driving half as much will decrease maintenance costs, but not by half.
-as for repairs, who knows? $3k over 5 years seems reasonable to me. I spent $2200 on the passat and this will be more than that…
as for premium gas: I have never bought it before now. But I have a mpg calculator in the car and I get 10% better fuel efficiency when I use the premium vs the regular. (yes, I was surprised as well). with my Passat I used regular gas.
as for commute time… I have a car computer so I know exactly how long it takes me My commute is 4 days per week, just under 12.4 miles each way. I have to get to work early (630am) and I leave late (645-7pm), so no traffic. It takes me on average 18 minutes to get to work in the morning and 22min at night. (I live and work by a highway) On a “good” day I can make it in 16 minutes.
if I hit the end of rush hour it takes me 45 minutes. (so I always just stay late and do my charts) I can’t remember the last time I drove in rush hour. If there is a snowstorm it can be butal, and can last 1-2 hours each way. That happens about once per year.
except for work, I almost never drive. there is no reason. my groceries are delivered to my door. I have a few very good restaurants (cuban, spanish tapas, eurobistro, bakerybistro, breakfast joint, and a few cafes) within 4 blocks of my house, and a fair amount (20?) within 6-9 blocks, and oodles of restaurants within 12-15 blocks walk or bike ride.
I’m not a “shopper” so I don’t go to malls or anything. I don’t much go to clubs anymore maybe once a year. I do drive to the opera and theatre and all that though. I take the light rail to sports events b/c parking is a pain.
there are bike trails right by my house that go all over the city (it’s uber bike friendly and I”m a biker). so I take my bike all over on BIKE streets (no pesky cars). The club I went to last night is this lesbian bar in a warehouse district. There were over 100 people who BIKED to the club (yes, it’s odd, but it’s a great idea: it saves the earth, no drunk driving… so I might drive my bike there in the future if I ever go back). imagine, a nigthclub with this huge bikerack filled with bicycles and all these pierced and tatted and dyed haired lesbians dancing to funky 1970’s remixes. it was fun.
IMO you can easily live here without a car. I know tons of people who do. they just use “hOUR” cars, zip cars, public transport. or they live centrally and work downtown. but almost everybody above middle class does have a car because who wants to wait for a bus or lightrail train in the snow?

Chicago — umm, blues innovations? jeesh.
Also, it’s (characteristically) parochial to give SF “credit” for the internet (you might as well credit San Mateo, Sunnyvale, or Stanford), and for “hippies” (more interesting things were going on in Berkeley). Why not give SF credit for some hip hop innovations too (oakland)? You don’t need SF proper to witness/participate in the bay area’s “creativity crucible”. In fact, the internet has (in my opinion) pushed many of the creative element out of the city proper, unless you are working for a web 2.0 startup.
You’re right about the beats. But those folks were weird 🙂
Oh, and you forgot anon salon and burning man. Whether you think that’s a joke is up to you! 🙂

as for commute time… I have a car computer so I know exactly how long it takes me
No, not really. I think it is kind of telling that most car drivers consider the time in their car as their “commute time” though. Commute time is the time from when you leave the house until you sit down at your desk. Anyone who say, walks to work, would not count it any other way. But most car drivers don’t consider the time parking and walking as part of their commute.
Yes, I am taking “credit” for the whole Bay Area is my claims to cultural significance. You can certainly live in Berkeley or Mt. View and be part of what is going on here. It would pretty hard to find the time to participate if you were in Vallejo though.
That you mentioned bar sounds pretty cool. One of the things I appreciated when I lived briefly in San Diego was how tight knit the G&L community is. In fact, the entire alternative scene was like one small town: all the freaks, goths and artists all knew each other, since there were so few of us. That is something we do not have in the Bay Area.
I said Chicago was a perfectly fine place to live, but not particularly culturally significant. I don’t think anything you told me about it changes my opinion, except for the caveat that yes, Chicago was an amazing wellspring of creativity at one point in American History: that was something like 100 years ago though. If you are going to talk about stuff back then, you should throw in the Wobblies as well.
I am not quite sure why you state that Chicago is the birthplace of Black Nationalism. The Nation of Islam was founded in Detroit, Malcolm X did most of his work in New York City and the Black Panthers started in Oakland. I am sure some stuff happened in Chicago, but that makes about as much sense as claiming Oakland as the cradle of Hip Hop or Chicago as the birthplace of The Blues 🙂
I agree with you though that to try and compare San Francisco to Paris or London (or New York City) is kind of silly, though I have never heard of anyone actually trying to do that. I have heard plenty of New Yorkers denigrate San Francisco as a “small town” though.
San Franciscans often (myself included) think of it as the best place in the world to live. But don’t confuse that with people thinking that it is the most *important* place in the world. If anything, San Franciscans tend to be too dismissive of its cultural and political significance, in my opinion, especially since almost everyone here is really from someplace else.
Right now we are transitioning from the American Empire to China Rising and San Francisco is America’s eye on the East. I think in many ways it is corollary to what New York was to America in the 1800’s. So I expect San Francisco’s influence to rise, though it is not really there yet.

Jim, this is particularly interesting to me since I grew up in Southern California. My question is, how is it San Franciscans develope this ability to pretend L.A. does not exist and that “the city” is the “Queen of the West”. Sure the west coast is important, but if L.A. is the NYC of the west, we are more like Boston (great universities, restaurants and tech. jobs, but not the center of entertainment, media, finance or culture)

Everyone has their opinion on whether SF is “worth it” or “too expensive” but IMO it’s worth exactly what it cost. i.e. capitalism, supply and demand determine the balance accurately. Of course that’s with our rediculous rules of prop 93, rent control, and school “diversity” – without those it would still be balanced but probably cheaper and even better quality.
I know hundreds of people that make over $500K working in the city. One lives in a rent controlled 2BR apartment for $1400/mo in Pac Heights. One spent only $600K on a TIC the year he made a million bucks. One lives in a $3M house in Pac Heights. Most with kids move to Marin or Boringame of Piedmont only becuase they’d never send their kids to SF public schools. They each have their own value of what living in SF is worth.
I buy the theory that SF is the best city in the country and therefore attracts the wealthy and mobile.

Dan, have you been to Chicago in the last 4 years? You might be suprised. Restaurants like Alinea and Moto in Chicago are currently what everyone is talking about. Alice Waters came to make a “pilgrimage” to Alinea as it was reported in the New York Times.
I also used to dismiss Los Angeles. But after a recent trip, I now understand that my bias against anything not San Francisco is very provincial. There is a lot happening out there beyond the Bay Bridge, and we need to wake up.
The Chicago Symphony is rated best in the nation, they have the best skyline, amazing restaurants, and I challenge anyone to look up the urban wealth statistics of Cook County and L.A. County vs the entire Bay Area. I might be wrong but we are not as unique as we think we are.
Now, I own and live in the city as well as a small cottage outside of Olema because it is amazing here. Perfect climate, perfect landscape, and interesting people. But I do not pretend that this is the economic, cultural or political center of the America, or even the west coast. We are a top tourism desitnation, and with restricted growth, property has become expensive and (at least in the past) a good investment. But is it expensive because it is desirable because of economic conditions, or because of growth restrictions?

This thread is probably dead, but I found this data, from 2000:
http://info.cnt.org/~annette/H&T%20Tradeoffs%20for%20Working%20Families%20in%2028%20Metros%20Sept%2014%2020%E2%80%A6.pdf
It has housing and transportation costs, by percentage of income, broken down by metro area.
As I suspected, housing costs are high in the SF CMSA and transportation costs are lower. Overall costs are slightly below average. This is as a percentage of income, not total cost.
SF area households making 25-50k however, spend a total of 63% on housing and transportation, by far the highest in the country. It is tough to be working class in this area.

ex-SF-er,
You’re sounding a little pretentious now and stereotyping pretty bad. There are hundreds of thousands of San Franciscans that do not fit your mold. I’m a person that has lived in Amsterdam, Barcelona, Buenos Aires, NYC, LA, and Seattle. I choose SF because it is my favorite city in the world, but I certainly like other things about each one of those other cities. Most of my friends are like me and not at all the way you describe typical San Franciscans.
BTW – Chicago is a great city, but waaaaaay too cold for me to ever consider living there. Great place to visit though.

Most San Franciscans have lived somewhere else. It’s not that we like SF because we don’t know any better. I’ve lived in LA and in New Haven, and there are things I liked about both places, and I could see myself living in LA again. I’ve spent time in many cities in all parts of the country, and many of them are unappealing to me.
People who moved away from SF so that they could buy a bigger place in another city may try to justify their action as the only rational one, but people make informed decisions to live in SF and they make informed decisions not to live here. and fortunately, not everyone wants to live in SF: just imagine how difficult it would be to find a place.