A reader’s comment from our report on 44 Rockaway Avenue that sparked a discussion that’s topical and worth its own place for debate:

[Here] is the explanation of how SOMA rental units can be doing pretty well, but why that has not correlated with more home sales and thus prices keep falling: local tech jobs just don’t pay all that well. It’s enough for a 28-year-old to rent a decent small-ish pad. But it is not nearly enough to buy a nice SF place, especially if you have kids.

Feel free to join in, but if you do, please stick with a unique identity that’s your own.
Look Out Below [SocketSite]
Tech Job Quote Triptych [SocketSite]
Here Are The Top 7 Highest Paying Companies In Silicon Valley [businessinsider.com]

Comments from Plugged-In Readers

  1. Posted by [sdfsdfds]

    By the way, I’m actually going to sit here and say that 100K/yr. isn’t enough for people to save and purchase a home. I mean, they can’t buy it when they’re 28, so obviously they’ll never be able to. Henceforth, nobody has any money and home prices should drop to nothing.

  2. Posted by shza

    local tech jobs just don’t pay all that well. It’s enough for a 28-year-old to rent a decent small-ish pad. But it is not nearly enough to buy a nice SF place, especially if you have kids.
    Yes, the average salaries at all of these companies are substantially less than the starting salary for a brand new, fresh-out-of-law-school lawyer at a major law firm (though these folks presumably have not acquired three extra years of graduate education debt). But $100k or $200k is nowhere near enough to reasonably afford a ~$1M or even $700k home/condo.
    This has always been a great puzzle to me. Despite the constant talk of how much wealth is in SF (and there are undoubtedly a number of people with enormous wealth here), less than 10% of the population makes even $200k *per household.* Which is relatively little money considering what prices still are.

  3. Posted by shza

    By the way, I’m actually going to sit here and say that 100K/yr. isn’t enough for people to save and purchase a home.
    I’ll say it. You’d certainly have to give up on enjoying many of the things that are attractive about the city in the first place in order to make it happen. And definitely not have kids. I can’t imagine living here on $100k/year or even $200k/year. And I rent.

  4. Posted by A.T.

    [shza] is absolutely correct. After taxes and living in SF, at $100k/yr, you are going to need to live like a monk and save for a long time to afford even a middlin’ place in SF (however, you could buy a place elsewhere, which is the far more common outcome). You’d have a much nicer, more financially savvy life by continuing to rent.

  5. Posted by sdfsdfds

    @shza, “$100k or $200k is nowhere near enough to reasonably afford a ~$1M or even $700k home/condo.”
    Not true. With dual income, my wife and I make about 250k/yr (both in tech). We saved our 20% down payment on a 700k home in 2 years. Our monthly payments are now manageable under one salary due to low interest rates. We’re already saving for a second home and both just 31 years old. Not trying to brag — just hoping to enlighten you to the fact that it’s not unthinkable with the right priorities in mind.

  6. Posted by Average Joe

    How can someone live here on $100K/year? I see one example almost daily, and it ties back into my original comment. Buy a house, illegally build out the downstairs into two rentals (inc. sealing off the garage). Obviously we’re not talking PacHts, but now your monthly payments are perhaps only $2,000.
    I like the increased density, actually, but it isn’t managed as it would be if addressed via zoning changes and the like. Instead you get pervasive civil disobedience.

  7. Posted by shza

    sdfsdfds, that’s not a counterexample. You make 25% more than the high number I threw out there, and you are managing to afford a house for the low number I threw out there. And I assume you have no kids. I also assume you’d have a nicer space for the same money if you were renting.
    I’ve also managed to do considerably better with the few hundred k I could have sunk into a down payment, but that’s another issue — just responding to your “right priorities” barb.

  8. Posted by tc_sf

    “Not true. With dual income, my wife and I make about 250k/yr (both in tech). We saved our 20% down payment on a 700k home in 2 years.”
    3x income is pretty much in line with what pre-bubble estimates of reasonableness. The 200k HH’s going for $1.5-$2M places are the problem cases. I assume shza’s question of how this happened was rhetorical, but the answer obviously is large loans!
    A point here though is that while individual personal income may affect your ability to weather losses or temporary fluctuations, it is really unrelated to if a particular investment (such as a house) is worthwhile at a particular price point. A bad investment is still a bad investment even if your income doubles.
    The solution to shza’s “puzzle” in my opinion is that given the home price increase expectations present during the bubble it would be rational to lever up to 10x income to get a piece of that. The error of course being in the expectation of future prices.

  9. Posted by sdfsdfds

    @shza, big friggin deal man — make 25% less and save for another 1/2 year.

  10. Posted by A.T.

    “big friggin deal man — make 25% less and save for another 1/2 year”
    Well, saving 20% down in 2 years on a 700k place means saving $70k/yr. However, if you make $50k less a year, then that makes it quite a bit more difficult to save that $70k/yr! When you’re only saving 20k/yr instead of 70k, it is not as easy as just saving up for another 1/2 year.
    But, hey, let’s not let simple math get in the way of this “real life” counter-example. (and yes, I know that you need to account for taxes, etc. — use any realistic numbers you can conjure up and the point is the same)

  11. Posted by sdfsdfds

    Dude, do you really think I’m going to sit here and do the math for you? Whether it’s 1/2 a year, 3/4 of a year, or 5 years, the point is that it’s completely feasible, which counters your point. We aren’t talking about infinity by any means.

  12. Posted by A.T.

    Of course I don’t expect you to do the math for me. Because as I demonstrated the math does not add up, and you cannot “do the math” so that it does.
    I didn’t say infinity. I said that at these relatively low pay scales in tech, you’d need to live like a monk and save for a long time to afford even a middlin’ place in SF. Sure, at higher, and more uncommon, pay scales, and with no kids, and without saving for retirement, and with little to no student loan debt, one can afford that middlin’ place sooner (and start paying more than comparable rent sooner).

  13. Posted by UsuallyNamed

    28 year olds might make $100k a year, but mid-career professionals make more like $150k in high tech. I have posted the proof before and my sources are BLS, not some random website.
    At $300k/yr you can pretty easily afford a $1-$1.2M home, especially with any kind of decent down payment saved up. Most people in high tech also have some money from stock options or bonuses that helps with the down payment.
    It is a little harder to figure out where the $2M home money is coming from, but all the ones that I know of are either from a big IPO or equity payout or family money. There really aren’t that many $2M+ sales every month.
    We bought our first home at 5X salary and it has worked out very well for us, but we are each making as much individually as we did combined 8 years ago when we bought out place.
    It is quite possible to have a very nice lifestyle with a mortgage in San Francisco on $150k/yr. Our combined household expenses last year, with two kids in private daycare was $120k. And that includes a mortgage and taxes. This is going to go down $20k this year as the oldest enters kindergarten and should drop another $20k in a few more years. We also get $24k/yr in rental income from the downstairs unit.
    Once both kids are in public school we should be fine on $80k or so a year after taxes. And that is not really scrimping too much: we shop at Whole Foods and CostCo and go to Camp Mather for vacation in the summer. We live in a neighborhood that most San Franciscans would agree is pretty nice.
    Right now we basically live on one salary and save the other one.

  14. Posted by sparky-b

    UsuallyNamed,
    So you are saving $150/year. A $2M house would cost you $100K a year if you put $500K down. Basically you could save for 4 years and buy a $2M house.
    Why do you find it so hard to see where all the $2M sales are from.

  15. Posted by tc_sf

    ” Our combined household expenses last year, with two kids in private daycare was $120k. And that includes a mortgage and taxes.”
    I think the average federal effective tax rate for your income level (300k/year) would be around 26%. Plus CA taxes, I’d guess ~$40k/year housing expenses based on what you said above, plus $40k daycare you mention. That’s already over $120k not even counting the CA taxes.
    Perhaps I did the math wrong or maybe your tax situation is atypical.

  16. Posted by meep

    people making $300000+ a year and living in an urban area like sf often decide to go the private school route or move to the burbs

  17. Posted by Shza

    You’re forgetting about income tax, sparky. usuallyNamed, if you’re really saving anywhere near 150k/year on only 300k HHI, kudos to you. That’s more than we’re able to save on almost double that, and we don’t live particularly large. To do that on only 300k would definitely feel like (extreme) scrimping to me. But I wish it wouldn’t; I could quit my job today and be a stay at home dad. And buy a 1.5M house.
    (On your question about the 2-3M range, I suppose part of that class are families like mine (double lawyer), to the extent people are still leveraging at 5x income, which strikes me as absolutely insane – but we obviously have different lifestyle priorities.)

  18. Posted by lol

    Historically the rule of thumb used to be house price = 4 X gross income. More than this was considered too risky.
    Of course low rates, relaxed rules and industry pressure have pushed prices up and many stretch a purchase to 6, 7, even 8 X income.
    To everyone his comfort zone. I stayed in the range 3-3.5 myself and live well beneath my means.
    In my opinion people who go over the ratio of 5 in SF should be very very careful about what they are actually purchasing. Any kind of work on a house is prohibitively expensive in SF for most paychecks. If you do not have the cash flow or something stashed for that purpose, a house can affect your family’s lifestyle big time.

  19. Posted by A.T.

    And there are also payroll taxes – another 7.6% (and this hurts 2-earner couples harder because they are each subject to the cap).
    But I agree that living in SF on $300,000/yr is certainly easier than $100k-120k/yr, which is what a typical mid-management tech worker will earn. $300,000/yr puts your household in the very thin top slice of SF households, probably about the top 1/20 (and as UsuallyNamed notes, even $300k does not permit one to live large in SF if you want to save anything for retirement, college, etc.). I suspect this is why more than 90% of homes sold if SF in the last 6 months went for under $1.5mm — not enough SF residents can afford that much house now that banks don’t lend vast sums to anyone with a pulse.

  20. Posted by tc_sf

    “Historically the rule of thumb used to be house price = 4 X gross income. More than this was considered too risky.”
    A common “risk” is that dual income households don’t always stay dual income over the long term. You can get an empirical taste for this by looking at the stroller density in Noe Valley.
    Buying in at 3-3.5x and going to 6-7x is probably workable even if a little tight. But buying in at 5+ and going to 10+ is a different story. For the $~2M house example with $100k mortgage & costs, $30k property tax, a $150k income won’t work out well.

  21. Posted by sparky-b

    I am not creating the numbers or forgetting anything, I just went off what the poster said. You guys always are looking for the fault in stuff “you skipped taxes”. Well you skipped possibility of a raise, getting a better job, the fact that kids are coming out of private going to public, or that they already own a house that they will be selling to pay for part of this house, etc. etc.
    On top of that it’s 2 people making $150K. There are plenty of couples who make more than that.
    The point about what amount to spend on a house for most people doesn’t matter. If a small percentage of the people making over $300K think they should be at 7x then the $2M houses will keep selling. Not to you, but to somebody.

  22. Posted by UsuallyNamed

    Our 300k breaks down pretty much 1/3 taxes, 1/3 expenses, 1/3 savings. That income does not include the 24k of rental income.
    A $2M house on our income would be pretty tight, even with 20% down payment saved. A quick calculation of a $1.6M mortgage at 4.75% gives me $100k in mortgage and another $24k a year in taxes.
    I just can’t see spending 62% of my after tax pay on housing. Sure there would be a tax break, but not really that much, since only the first $1M is deductible.
    And that would mean very little or no savings, a 30 year mortgage with no desire to work another 30 years and everything tied up in a massively leveraged bet on San Francisco real estate.
    I am absolutely following the Your_Money_Or_Your_Life plan to achieve financial independence and be a stay at home parent. This helps make the scrimping and saving not feel like so much of a sacrifice. I couldn’t do it without the 100% support of my spouse.

  23. Posted by shza

    “I think the average federal effective tax rate for your income level (300k/year) would be around 26%.”
    Maybe I need to hire an accountant and stop relying on turbotax. Ever since we passed the 300k or 350k mark, we’ve been hit with the AMT every year and our effective federal rate is *well* over 26%. We also don’t have a mortgage/mortgage interest to deduct, so maybe that’s the difference.

  24. Posted by A.T.

    Most people in this country making 300k/yr have a substantial part of their income from capital gains, taxed at a lower rate. It is the two-income W-2 wage earner couple that gets most screwed on taxes — paying payroll taxes to the cap twice and paying the highest marginal rates. That’s why even a couple each earning these okay, but not spectacular, tech salaries aren’t living high off the hog in SF.

  25. Posted by tc_sf

    “and our effective federal rate is *well* over 26%”
    I think I forgot to add in payroll tax. A quick google gives the total number as 34%. And as A.T. points out dual income W-2 HH’s (typically younger) are most likely over that average number with those getting more unearned income (typically older) below average.
    “The point about what amount to spend on a house for most people doesn’t matter. If a small percentage of the people making over $300K think they should be at 7x then the $2M houses will keep selling.”
    In the aggregate if prices are supported by large leverage rather then income that has implication for the stability of prices. Individually, whether or not a house is a good deal at a certain price is a different decision then how much personal leverage should be used.

  26. Posted by djt

    200k per year is enough to own a million dollar home if you can get started. An 800,000 loan costs about 4400 per month to service, net, including property taxes, MID, etc. Someone making 200k per year is paying 50k in fed taxes and perhaps 15k in state, leaving them 11k per month. 4400 per month is not difficult at that income level.

  27. Posted by runner's high

    Why higher rents not resulting in higher home prices? Lemmie give you an example —
    I lived in SF (SOMA) for three years renting happily. Then I got a contract in NY for a year. I am coming back after the contract is over and will be looking for another rental. I love love love SF but in order to be as marketable as possible, there’s no way I am buying until I am done actively building my career.

  28. Posted by wrath

    the discussion of 3-5X-10X is pointless unless you know what you’re putting down and the absolute size of the mortgage. Even if you’re pulling $1m, the debt service on a 5m mortgage is going to crush you.

  29. Posted by tipster

    200k per year is enough to own a million dollar home if you can get started.
    My friends with $200K in household incomes all have car payments and monthly credit card balances. Don’t ask me where their money goes (I’d never live that way) but it goes. BofA stopped giving them money years ago, and a couple more months like the last month in the stock market and their parents won’t have anything to give them either.

  30. Posted by Jimmy (No Longer Bitter)

    @tipster: their problem is that $200k/year doesn’t go that far especially if you have kids. You’ve really got to get your income up north of $300k to get ahead of the curve.
    There is certainly no special challenge to spending all of a $250k/year income while living in any expensive metro area in this country.

  31. Posted by asiagoSF

    UsuallyNamed, I would be more realistic if I were you on the private/public school assumption. Most people in your income bracket end up with private school for their kids, unless they can get into one of the handful of top public schools, but the chances are very low. You just don’t know it yet, it’ll hit you next year with your older one in K.
    Start touring!

  32. Posted by EBGuy

    Shza, You really need to get yourself a home (and mortgage payment) to call your own instead of that Prop 13 protected rental. I’ve been meaning to ask, do other parents give you the stink eye at PTA meetings when they find out you’re a renter? I suppose you can endear yourself to them by saying that you always vote for the school bonds and parcel taxes! Regale us with a tale or two; you’re the closest we have to LMRiM these days.

  33. Posted by Bozette

    Man, I must be doing something really wrong. Close to $400K salary, three kids, husband is a full-time dad, two kids in pre-school and one kid in private grade school. And we are *barely* getting by. Own a two flat building with an illegal third unit where thanks to low interest rates our rental income covers our mortgage. $2.2MM building with a mortgage of $1.7 at 3%. Heck, we spend $1,400 a month on groceries alone which sounds crazy but $1,400 / 28 days / 5 people = $10 per person per day. Not crazy.
    This is a real eye opener for me. Glad I saw this post.

  34. Posted by REpornaddict

    “My friends with $200K in household incomes all have car payments and monthly credit card balances”
    Just a generla question, as I see thiskind of comment frequently. Do people here just sit around and discuss salary details, credit card balances with each other?
    Maybe you do, and I’m just so terribly..British..about all this. But the couples my wife and I know, really, I could guess but I have no idea whether they’re, say, a $200k or $300k household.
    I don;t think I;ve ever asked anybody what their salary is, and I don’t think anybody has ever told me that information,either…

  35. Posted by djt

    Uh, someone making 200k who wants a million dollar house is not wasting money on depreciating assets like automobiles. Our family makes more than that and we have never spent more than 15k on a car. 15k!!! We suffer less than 1k per year depreciation for all our vehicles combined. I bought a new car in 1988 just out of school (none since) and my spouse has never bought a new car. If driving a fancy new car is a priority stick to renting.

  36. Posted by REpornaddict

    $2.2MM building with a mortgage of $1.7 at 3%. Heck, we spend $1,400 a month on groceries alone
    The $1,400 is mind blowing tbh..
    But I found the 3% mortgage even more surprising..are rates that low possible??
    Curious as we own a 2 unit building, and rent out one of the units. Have bought enough of the mortgage down to below the conforming limits (limits are higher for 2 units) but our mortgage rate is still no where as low as 3%.

  37. Posted by DLotus

    I’ll bite.
    I guess I don’t get it. 5 years ago I was making $110k/year and was able to comfortably afford a $500k condo where I lived alone, while maxing out my yearly retirement and going on regularly drinking binges with my girlfriends.
    OTOH, I drove the same car for 15 years, don’t buy new clothes often, carefully plan most of my purchases, and don’t carry any credit card debt. So maybe that is the difference.
    I was able to keep putting away another 10% of my take home pay and then cashed out the equity that I had put away in my condo and moved up to a home with a legal in-law that paid 1/3 of my mortgage.
    If I had kids that would have changed the equation significantly, of course, but presumably I would also have a spouse so maybe it wouldn’t.

  38. Posted by tc_sf

    “the discussion of 3-5X-10X is pointless unless you know what you’re putting down ”
    The WSJ had an article a while back stating that the median down payment in SF dropped to zero during the boom. Even now, I think the rise in FHA loans is mainly due to the low DP required and I’d guess that average DP size isn’t huge.
    “There is certainly no special challenge to spending all of a $250k/year income while living in any expensive metro area in this country.”
    Since by and large these tech jobs do not have defined benefit pension plans, it’s worth considering the amount of saving you’d need to do to keep up an inflation adjusted standard of living at a $250k burn rate compared to the $80k burn mentioned by the other poster. If you assume SS stays in its current form, it’s probably worse then simple scaling since for a dual wage family social security would provide a chunk of that $80k.

  39. Posted by Bozette

    Hi DLotus –
    I think we just got lucky on the mortgage. It adjusts every year at 250 basis points over this index, which I am not worried about increasing prohibitively any time soon: http://www.moneycafe.com/library/cmt.htm
    On groceries, how many in your family and how much do you spend? Curious.

  40. Posted by SFHawkguy

    I’m sure people making $100,000 and up feel like they can’t keep up. But give me a break–it’s unseemly for people that are in the top 15% of Americans (households over $100,000) to be complaining. Those in the top 5% (households over $150,000) may have a hard time buying a million dollar home, but they have a lot of freedom and more options that most Americans can only dream about. sdfsdfds is in the top 1% or 2% of American households by making over $300,000 a year. [most of this data comes from here.]
    In San Francisco, the median income in
    2009 was $70,247. I can’t find data as to the exact breakdown of SF income brackets but I imagine a household income of $150,000 is still in the top 10% of San Francisco households. I would imagine, even though San Francisco probably has more high earners than other places, that the $300,000 household income still puts one’s family in the top 5% of San Franciscans.
    There was a housing bubble that effected all income levels. The housing for the middle and lower income levels have suffered the most and this is where housing is more affordable. Housing for the upper income levels is still elevated and here it is much less wise to buy a home. So buying in San Francisco pretty much only makes sense on a fundamental level for those looking in the less expensive neighborhoods and for less expensive houses. Of course, our mythical, yet all-too-real 30 year old Master of the Universe, making $100,000 doesn’t want to move to Bayview or out by the Ocean, or anywhere it may actually make sense on a fundamental basis to buy.

  41. Posted by meep

    one thing i have realized in the bay area is that how much your home costs does not reflect on your income.
    one family could make $200,000 and buy a $1 million dollar home and live next door to a family making $300,000 in a $1 million dollar home.
    it’s other expenses that will tell the income story
    kids? private school $20,000 a year per kid or public school
    cars ? 20 year old toyota or a new quatraporte
    vacation? camping in yosemite or going europe
    an extra $7-8000 a month can make a big difference in lifestyle

  42. Posted by djt

    someone making 100k per year can buy 1/3 of the houses for sale in SF
    someone making 200k per year can buy 80% of the houses for sale in SF
    what’s the big deal? A married couple, 30 years old, with decent tech jobs can buy almost any house in SF.
    I don’t get it. Yes, financially profligate people won’t be able to, but they box themselves out of many things, not just house purchases.

  43. Posted by A.T.

    “5 years ago [i.e. 2006] I was making $110k/year and was able to comfortably afford a $500k condo . . . and then cashed out the equity that I had put away in my condo and moved up to a home”
    Unless you had a big windfall from an inheritance or something, the timing of this makes no sense.
    Since you bought your condo right before the absolute peak, the only way that scenario worked was if you then sold a year later and moved up . . . at the absolute peak. If you sold the condo later, it was at a loss, and if you moved up in 2007, you’ve suffered a really big loss since. That would hurt on about $5000/mo take-home under these numbers.

  44. Posted by SFHawkguy

    I fail to see how tc_sf got to the 36% figure. I linked to this Forbes article before, showing that that the plutocrats are paying a crazy low effective tax to the federales, up to 18% 2008 from 16%. The article goes on:
    “By comparsion, as the IRS report here shows, in 2008, taxpayers with an adjusted gross income between $500,000 and $1 million paid an effective tax rate of 23.4%. Even those earning between $200,000 and $500,000 paid a higher effective tax rate —19.6%—than the plutocrats.”
    Presumably Tc_sf added in payroll taxes to go from 19.6% to 36%? But these taxes effect those making under the cap even more than those making more than the ~ $100,000 cap. A person making $150,000 is only paying payroll taxes on roughly a third of his income. A person making $300,000 is only paying payroll taxes on one third of his income. A person making the minimum wage in San Francisco of about $20,000 a year is paying payroll taxes on 100% of his income. It would obviously be better from a payroll taxes standpoint if one family member were making the $300K rather than two $150,000 family members.

  45. Posted by Bozette

    SFHawkguy, I hear you. I don’t think people on this board are complaining or whining. I at least hope I am not coming off that way.
    At the same time, people that have reached a certain income level view their success as primarily a function of hard work, tough decisions, and sacrifices they have made in life. I can only speak for myself but I for one have worked my tail off in life and have certain expectations of what that would mean in terms of life style and rewards. Am I in the far right of the bell curve of incomes in this country? Probably. Do I feel like my lifestyle is even close to the far right of the bell curve? Hardly. But then again, we all live in quite the bubble relative to places like Des Moines, Madison, Portland, Jacksonville, etc. But I don’t want to live in those other places… That is, at the end of the day, my choice.

  46. Posted by shza

    “I linked to this Forbes article before, showing that that the plutocrats are paying a crazy low effective tax to the federales, up to 18% 2008 from 16%.”
    See AT’s point about passive income earners versus dual-income W2 earners. I’m telling you — we make roughly $500k/year and pay a little over that 36% figure.

  47. Posted by Bozette

    I’m with SFHawkguy. The capital gains tax structure is abused in this country. Huge advantage to people that make most of their money through investment carry from investment vehicles. If I trade stocks in a hedge fund for a living I do nothing more than create liquidity in a market for secondary securities. If I run a business with 100 employees that creates something not only do I provide meaningful jobs across the socioeconomic spectrum but I also am adding something back to society, be it toilets, cars, telephones, and pens. Yet the small business person will pay a much higher tax rate.

  48. Posted by shza

    “Heck, we spend $1,400 a month on groceries alone”
    We spend a little over that, with two kids. It’s a result of doing 100% of our grocery shopping at whole foods because we don’t have time to make separate trips for produce (farmer’s market), meats (butcher), fish (monger), and dry goods (Safeway or something). The meat/fish/produce selection at, e.g., Safeway, is seriously sub-par, so it’s not a realistic one-stop option. Far more important to me to have good quality food at home than to have a marginally more expensive home (or to service a mortgage at all). Different strokes for different folks.
    There was a thread on this on the Berkeley Parents Network a few weeks ago, and responses were all over the map. Plenty of people spend $400/week like us though (presumably the other people whose time constraints and food quality concerns mean they do one-stop shopping at wholefoods).

  49. Posted by SFHawkguy

    I hear you too Bozette. Most people in all income levels have had to readjust their assumptions. This is a personal adjustment that will be difficult on all people. I do not deny that there is emotional trauma and other effects associated with someone that makes $300,000 a year and can’t have the things she thought she would have. That she won’t be able to live in Noe Valley but will instead have to settle for Glen Park, or that the yearly trip overseas will have to be scaled back, etc.
    I’m just saying that one should keep some perspective. The people that are really getting screwed are in the bottom 50% of our society and they have no voice. Our media writes them out. And as much as I like this blog, it is definitely geared toward the mindset of a person in the top 5% (which is fine–there’s value in all sorts of opinions–it’s just that all of our media is filtered through a lens just for the top 5%).
    Imho, the attitude adjustment, or the emotional trauma associated with diminished expectations, will effect the top 20% to 50% the most–people that 10 years ago had [misguided] expectations about their lifestyle. This group was really encouraged to live beyond their means. Lots of Americans bought into the hype. In fact, trillions is spent on convincing us to live beyond our means.
    I’m not discounting the personal feelings of those who have to readjust–even the wealthy–I just think its health to remember that lots of people are suffering even more severe emotional and physical pain from the recession. There’s a big difference between losing a home (or losing a pension or something like that) and *only* being able to afford a $700,000 home and not a $1,500,000 home or to have to drive a $15,000 car instead of a $50,000 car.

  50. Posted by Bozette

    Amen SFHawkguy. And that is why I choose to live in San Francisco: intelligent discourse and discussion.

  51. Posted by Its all gone

    Here’s the irony in our case: for the first time this year my wife and I will have a combined income just north of $300k. We have only one child in a nanny-share arrangement and almost never eat a meal out (once a month or less, when we can get the grandparents to babysit). We went on one vacation all year, for 3 weeks. We own our cars outright. I never go shopping for new clothes, kitchen gadgets, electronics, nothing. Ever. We have zero credit card debt and zero student loans. No loans of any kind except for mortgages.
    I have a weakness for wine and I have no idea what my grocery bill is every month. We have a gardener and a housekeeper (each come weekly).
    We don’t save a penny.
    Its.all.gone.

  52. Posted by tc_sf

    “I fail to see how tc_sf got to the 36% figure.”
    Perhaps due to insufficient coffee!
    When I google for a better result then my initial 26% I got this (Table 2):
    http://www.cbo.gov/doc.cfm?index=5746&type=0&sequence=1
    Looking at it now I used the top 1% line instead of the top 10% line. Makes the 34% ETR into 30%.
    They include employer’s share of payroll (and SS/Medicare) in both income and taxes. You can probably dig around for other differences to the Forbes article which appears to only count federal income tax. It didn’t seem that the argument required all that much precision on this number though. It just seemed ballpark wrong to me that someone could have total $120k expenses including taxes and mortgage for a family of four on $300k income.
    “someone making 200k per year can buy 80% of the houses for sale in SF. what’s the big deal?”
    Hypothetically, If the market went back to allowing people to lever up 10x, then this 200k person could now buy upto a $2M house. Appreciation due to in increase in leverage like this is dependent on leverage continually being available. If 5x leverage then became the norm this would be strongly negative for prices.
    Contrast this to increases in price due to increases in income.

  53. Posted by REpornaddict

    “Hi DLotus –
    I think we just got lucky on the mortgage. It adjusts every year at 250 basis points over this index, which I am not worried about increasing prohibitively any time soon: http://www.moneycafe.com/library/cmt.htm
    On groceries, how many in your family and how much do you spend? Curious.”
    Think the q was meant for me, not DLotus?
    anyway, 3 in our family, probably spend around $600 a month, but trying to get it down, and have done so. mainly by moving away from an exlcusivley Whole Foods only shop. Their produce is great, but I find the prices an aboslute, total rip off – having said that, have managed to shop a bit more cleverly there than I used to – buying sale items, more bulk etc. agree re Safeway meat/fish quality. usually top up the WF stuff from other places when ‘out and about’ typically in Mission eg Sun Fat fish (some of their fish is half WF price, and good quality),or produce places in Mission (again, half price but varying quality) at Church 30th (a little cheaper) etc. So,no special extra trips, but sometimes a detour of a few blocks.
    This is as much for my own satisfaction as anything else, as don’t want to give WF ALL of my money!!
    Also, got good at cooking cheaper meals, eg a box of pasta, some tinned tuna, tinned sweetcorn, few blobs of mayo would serve family of five for less than $10, and kids (and me!) love it.
    But, I wouldn;t worry too much – you have a great deal on your mortgage at moment, which clearly compensates for a few excesses at Whole Foods! curious, though, when you say the rent covers your mortgage – you mean just the mortgage on the rental part of the property..or the whole thing?
    If the latter then I would wonder where it all goes!
    we have 2 units, rent out one and I think the rent covers around half of our total interest, property tax and principal payments, so fairly happy with that atm.

  54. Posted by S

    My partner and I are both 26 and in the last few years I’ve made 45k -70k per year. He’s made more than 100k at times but now is about at 70k. We sacrificed and saved for 3 years and managed to put 10% down on a 560k house in Bernal Heights. It wasn’t easy but if that’s what you want it is possible. There are also down payment assistance programs though the mayor’s office of housing.

  55. Posted by wrath

    “Of course, our mythical, yet all-too-real 30 year old Master of the Universe, making $100,000 doesn’t want to move to Bayview or out by the Ocean, or anywhere it may actually make sense on a fundamental basis to buy.”
    I didn’t realize that $100k made you a master of the universe. Or that buying in Bayview made sense (unless you’re a developer and are going to tear the whole place up).
    As far as the tax burden – you have 10% CA, 35% federal, 15% self-employment; SF 1%; on top of sales/use, car taxes/insurance, and all kinds of other crappy fees – incidentally, deducting CA may well put you into AMT. But heck, if SF employees are supposed to be getting $200k salaries by the thousands (!) then someone has to be fleeced for it.
    So yes, if you’re a VC and all your income is cap gains you may end up with 15% and 10% CA but most business owners don’t fit that pattern.
    Finally, as far as people who have “no voice” (and, no tax burden BTW), this is America, had they gone to school and gotten MBAs, or started their own companies maybe they’d have grown some chords that spoke a baritone. Assuming that doesn’t work there are many countries in the world if their socialized shores beckon at one’s heart. But of course, sitting and complaining and looking at another person’s wallet is so much easier.

  56. Posted by Fish

    Well, I’m sitting here in the city where the median home price is 13 times that of median income, and the rent is going through the roof that the middle class people are practically being thrown out to the street. You guys in SF have it good. (The city is Seoul, just in case you are wondering).

  57. Posted by Modernqueen

    Some of the renters I see around my neighborhood, Noe Valley, all drive new cars. I’m talking I see a lot of new 2011 bmw’s, audi’s and lexuses parked on the street in front of their nice little rental flat.
    Hmmm. no wonder they can’t afford a house. What about priorities, and saving?
    I applaud what S says above: sure, it’s not easy but it is possible. Congrats to them!

  58. Posted by UsuallyNamed

    Sorry for the statement “and that includes a mortgage and taxes” being confusing. I meant mortgage and property tax.
    We pay another $100k or so for combined federal, state and social security taxes.
    What do you spend it all on Bozette? Even including taxes, school and food, you must have at least $10k/month left over.

  59. Posted by shza

    “Hmmm. no wonder they can’t afford a house. What about priorities, and saving?
    I applaud what S says above: sure, it’s not easy but it is possible. Congrats to them!”
    Making leveraged real estate purchases has been a poor, poor priority/decision for the last half-decade. I’m even less sure why you’d be applauding someone scrimping to piece together funds for a $500k shack in Bernal rather than renting a superior place for the same money on very limited income. Seems like a much more reckless financial decision than buying a bmw for 40k.
    You also have no idea what these “renters” you look down upon are making, money-wise, or doing with the other money they’re not spending to service a huge loan. I’m far from the only person I know who makes substantially more money than the average SF mortgage-servicer. These folks could all be better off financially than you for all you know. They just haven’t “prioritized” your fetishism for home ownership. There’s nothing morally or objectively wrong with that (to the contrary, it’s been the objectively correct decision in the great majority of instances over the past half-decade).

  60. Posted by nnona

    Don’t know about y’all, but every time I hear (or read) self-reported salary/income/wealth/money figures or sexual conquest numbers/escapades, my reflex is to start looking around for the salt bowl.
    Triply so when these figures are coming from first time posters on an anonymous blog.
    Just sayin’….

  61. Posted by Repot addict

    Possibly nnona. But nobody answered my q above about how posters know so much about friends/acquaintances incomes. My point was I,d be guessing for most I know, and only confident at a combined 200 to 300k range say. A very big range.
    Do people really sit around and compare their and spouses salaries with friends? Maybe it’s just me, but I’ve never done that.
    Tipster, I think it was you specifically mentioned friends with specific combined earnings, but I know others have said it too.

  62. Posted by joh

    I bought a condo last year in the mission (media gulch) on a $105K salary. I’ve been saving since 2002, gave up hope in 2004 (prices were rising faster than my savings), and decided to bite last year after finding the right property for what I felt was the right price (my neighbors were pissed when they found out how much I paid). After doing a much-needed remodel, I’m in for around $490K (plus a lot of sweat equity).
    Monthly mortgage payments + HOA dues come out to $2250. I’m still able to put away 10% of my income into my 401K (after maxing out for the last 5 years), travel overseas (Europe, Asia) around 3 to 4 weeks out of the year, am able to go skiing about 8-10 days/year, eat out 3x/week, etc. In other words, I’m still able to enjoy life. However, I do have to be frugal. That means smaller no-frills boutique hotels when I travel, a Honda instead of an Audi, looking for deals when shopping, brown-bagging my lunch 3x/week, and eating at many of the excellent cheap eateries in the city (though we still go to somewhat nicer restaurants once or twice a month).
    It’s been a bit tough at times having to monitor the spending so carefully, but it’ll get easier. Next year, I’m pretty much guaranteed a 20% raise. My wife, who is unfortunately unemployed at the moment, will bring home an additional $80K or so when she starts working again (she’s been contracting on and off since we bought, which has helped her restore her savings and buy a new car, but none of this sporadic income has contributed to the household since we bought).
    While I sometimes regret the purchase, I think I did alright. One of the units in this building, which is ~10% bigger than mine and one level higher, sold earlier this year for 20% more than what I paid. A comparable unit to mine is renting for $2450/month, which is more than the $2250 I pay in mortgage and HOA dues (I know about opportunity costs, which isn’t much these days for a risk averse guy like myself; maintenance, which is practically nothing since I remodeled; insurance, which is like $60/month; and property tax which is pretty much offset by mortgage tax deduction). It’s still cheaper to rent to be sure, but not by much. The Mission keeps getting better and better, and hopefully these improvements will be good for home prices in this neighborhood.

  63. Posted by FormerAptBroker

    nnona wrote:
    > Don’t know about y’all, but every time I hear
    > (or read) self-reported salary/income/wealth/money
    > figures or sexual conquest numbers/escapades,
    > my reflex is to start looking around for the
    > salt bowl.Just sayin’….
    After reading Blogs for years I’v noticed that “most” people don’t out and out “lie” but tend to exaggerate to prove a point (so the guy that makes $100K that can’t afford an iPhone probably makes $60K and the guy that makes $100K and just bought in Pac Heights probably makes $180K and got the $250K down payment from his grandma)…

  64. Posted by SFHawkguy

    “I didn’t realize that $100k made you a master of the universe.”
    It makes one a starter Master of the Universe. That’s the starter mid-management salary, right? $100K – $120K? As you suggested, these are people that got their MBA, etc., and are hoping to marry or otherwise move up to the top 5% ($150,000) and beyond.
    It’s patently ridiculous to suggest that the majority of Americans suffering household balance sheet stress (to put it into MOTU terms), should get a MBA. Those 37% of families with children living in poverty? They failed to start a company! Jeez, don’t they know all they need to do is get an incubator space and secure some mad VC bucks and then start a company? Single mothers deserves to live in poverty because they weren’t smart enough to get the money to pay for graduate degrees!
    I’m not jealous of your wallet wrath. I’m sad that so many Americans are so cruel they would rather protect their relative comfort while millions of children are hungry and face bleak futures and who have to be reassured by such things like the “Hungry Muppet” on Sesame Street. http://www.reuters.com/article/2011/10/04/us-sesamestreet-idUSTRE7935LU20111004
    And please stop with the outright propaganda that the working poor, or even the non-working poor, pay zero taxes. It’s an outright lie and I suspect you know it it’s a lie (some would call engaging in these lies, “class warfare”). And I also have a suggestion for those that insist that this country should only serve the rich–you leave the darn country. I would rather have the millions of hungry children live here and be treated with human dignity that to have a country serve a bunch of selfish Masters of the Universe.
    They should get MBAs . . . God, what an insulting and ignorant comment.

  65. Posted by wrath

    “Single mothers deserves to live in poverty because they weren’t smart enough to get the money to pay for graduate degrees!”
    were they raped? were they unaware of Roe v. Wade being law of the land> or did they make a decision to have kids they could not afford without first getting a graduate degree? I am not knocking it but those are choices.
    “I would rather have the millions of hungry children live here and be treated with human dignity that to have a country serve a bunch of selfish Masters of the Universe.”
    There are countries like that already – you should search for subsaharan africa on the map. they have no master of the universe and no one really cares about them – most of these countries do not even have resources to “steal”. are they better off? how are they going to be treated with dignity? who’s going to pay for that?
    “Those 37% of families with children living in poverty?”
    Source please? Also, did it ever occur to you that, if you really wanted to equalize incomes, the best way to do that would be for the rich to have millions of kids and for the poor to have few – heard of primogeniture?
    “Single mothers deserves to live in poverty because they weren’t smart enough to get the money to pay for graduate degrees!”
    No one wants anyone to live in poverty but don’t pretend that most people just are born to lives of permanent poverty – look at the Indians or any other non-US group in Silicon Valley.
    “I’m not jealous of your wallet wrath. I’m sad that so many Americans are so cruel they would rather protect their relative comfort while millions of children are hungry and face bleak futures.”
    First, I didn’t say anything about my wallet. Second, what makes me sad is when I see evidently poor families walking up and down the street with 3,4, 5 more? kids. Then you say to me there are “millions” of them! My God they’re poor and I’m cruel for not wanting to feed them!
    You know what? Here is five bucks – give it to your friends, tell them next time to use a condom (yeah, I know, it doesn’t feel the same – life sux).

  66. Posted by wrath

    BTW this is the last time, I am biting on this – hijacking threads to discuss your social issues you have mastered quite nicely.

  67. Posted by Rillion

    wrath: “As far as the tax burden – you have 10% CA, 35% federal, 15% self-employment; SF 1%; on top of sales/use, car taxes/insurance, and all kinds of other crappy fees – incidentally, deducting CA may well put you into AMT.”
    What a bunch of bs, just throwing out the top tax rates without any acknowledgement that no one is going to get hit by all of those.
    The 35% federal rate doesn’t kick in until $379,000. Meanwhile the 15% self-employment tax drops off after $100k to less then 3%, and half of the self-employment tax paid reduces AGI. And further just deducting CA tax will not subject someone to the AMT, you need a lot of other deductions before triggering the AMT, plus the AMT tax rate is 28%, so if someone is actually paying the 35% they aren’t going to get hit with AMT on regular earned income (they may still get hit with the AMT if they have some unusual types of income particularly related to things like options).

  68. Posted by tc_sf

    “Don’t know about y’all, but every time I hear (or read) self-reported …”
    That’s why I’m partial to looking at statistical data. But presuming you have a good BS detector the occasional anecdote is useful to see if there is something not being captured by the data.
    @ Repot addict — People vary in how much they talk about their finances and probably also in how truthful they are. But related to what FmrAprtBroker mentioned for Blogs, my experience has been that most anecdotal info is broadly consistant with what you’d expect from real data. I’d conjecture though that there’s a bit of a heard effect. I’d guess that since the economy is overall in poor shape now, people are more willing to talk about losses in jobs, investments or homes then if the economy were doing well. Conversely it is probably less socially acceptable to talk about gains right now.
    Related to the above the WSJ just had a blog post breaking out what consumers are spending money on. As with many of the above anecdotes, on average housing represents a large fraction of spending.

  69. Posted by SFHawkguy

    Yes, you are cruel wrath. You will accept millions of children living in poverty and not having enough to food to eat as punishment because their parents gave birth to them. This is a pathological lack of empathy, imo.
    The U.S. Census is the source of the data that 37% of “young” families live in poverty (I forgot the “young” qualifier in the first comment), via this blog:
    “U.S. census data analyzed by the Center for Labor Market Studies at Northeastern University reveals that 37% of young American families were living in poverty last year.
    According to the New York Times, this is the highest poverty level on record for young families– defined as under age 30, exceeding the 2000 rate of 25% and the previous record of 36%, which occurred in 1993.
    Andrew Sum, director of the Center for Labor Market Studies, told the Times that the soaring poverty rate among young families is a result of a shifting of resources from the young to the elderly, a dangerous development that is threatening the welfare of the next generation of Americans at a time when labor market competition is extremely fierce and growing even tougher.
    “Young families with children are now six times as likely to be poor as elderly families,” he told the Times. ”

  70. Posted by Modernqueen

    @shza: Buying a house is far more than just for financial reasons.
    You can begin to lock in your monthly housing costs. Rents keep going up.
    A pride of ownership may support one’s goals and sense of accomplishment. These are called values.
    You can do what you want with your own house, remodel it, make it reflect your personality.
    Owning creates stability in the community. ALL of the owners on my street in Noe keep the streets clean, plant trees, become involved. Not ONE of the renters I know on my street have been interested in nor offered to help with tree planting. They have no desire, or reason to be a participant.
    My partner and I bought many years ago in Noe for around 100k, saved and scrimped for the down payment. Today: $1.5m
    Not bad for a “leveraged” investment.

  71. Posted by sfrenegade

    “plus the AMT tax rate is 28%, so if someone is actually paying the 35% they aren’t going to get hit with AMT on regular earned income
    Yes, that’s correct. However, if you are paying the 33% rate, you could get hit with the AMT. The AMT has a phase-out for the exemption, such that if you are in the phase-out range, your rate goes up by 25%.
    That means people at the 26% AMT bracket are really paying 32.5% when they are losing the phase-out, and people in the 28% AMT bracket are really paying 35% when they are losing the phase-out. The phase-out is between $150K and about $450K for 2011:
    http://thefinancebuff.com/2010-and-2011-amt-tax-brackets.html
    Perhaps due to insufficient coffee!
    When I google for a better result then my initial 26% I got this (Table 2):
    http://www.cbo.gov/doc.cfm?index=5746&type=0&sequence=1
    26% actually sounds somewhat high as an estimate for federal income tax for someone making $300K. Even if are a DINK and don’t own a home, I would be surprised if you have been paying much more than 20-22% in California, even with the AMT. If you have a house or kids, you’d pay less, and if more of your income is capital gains, you’d pay less.
    For the data tc_sf provided, total federal tax includes federal income tax (including capital gains and AMT), corporate tax, payroll tax, and excise tax, which is how you get about 31% for the top 1% in 2010. If you scroll down, you will see what the effective federal income tax rate is for the top 1% — around 22% in 2010. Corporate tax would fall disproportionately among the investor class, while payroll tax would fall disproportionately among the working class. Because that CBO report is from 2004, it doesn’t include the extension of the Bush tax cuts for 2011, so I would ignore those 2011 and later numbers for now.

  72. Posted by SFHawkguy

    tc_sf,
    Why do you prefer you source to the one I provided above? It seems my source is better because it looks backward looking at real tax returns rather than projecting forward. Again, for the bracket we are discussing, the Forbes article (reviewing the most recent annual IRS data), states:
    “Even those earning between $200,000 and $500,000 paid a higher effective tax rate —19.6%—than the plutocrats.”
    19.6 is a lot less than 26%. Now, if we want to add payroll taxes into the discussion I don’t see how this is evidence that the wealthy (the top 3% or so) pay a greater share of taxes. As you know, the payroll taxes is an extremely regressive tax, effecting the middle and lower classes much more than those making over $100,000. Maybe you aren’t making that exact argument though . . . .
    But the best evidence supports a 19.6% effective federal tax rate for those making $300,000.
    Shza,
    I understand your point and A.T.’s point. But you seem to be in the minority of the top 2% to 3% in that you have a dual wage income and don’t earn as much passive income. But ON AVERAGE, people in your income bracket pay a much lower effective tax.

  73. Posted by A.T.

    modernqueen, yep, buying in SF 30 years ago worked out well. Buying in SF 4-5 years ago, however, worked out terribly. And even SF real estate has not been remarkably strong. Buying any S&P fund 30 years ago yielded about the same (with dividends to boot, and no property taxes to pay).
    While there are certainly non-financial considerations that go into a home purchase, the same is true for renting a home. One generally does not just look for the absolute cheapest place to rent with no consideration of aesthetics, location, size, etc. Making the non-financial call to rent or buy is purely subjective – buying does get you some stability and freedom to customize but a high cost of lack of mobility, for example. Isolating the financial considerations, however, leads to the conclusion that buying has been foolish in SF for about the last 8-9 years (unless you bought then sold shortly thereafter).
    But the point of this thread is that for even those earning “good” tech incomes, most simply cannot buy a place in SF, thus leading to the continuing price declines we’ve seen for the last four years and counting despite a strong rental market in certain areas.

  74. Posted by elbee

    Yes, the baby boomers mortgaged their future, shifted wealth to a concentrated few, off-shored most entry-level positions, and wonder why their children aren’t as well-off as they are.
    I’ve gone from Starter MotU to Senior (not Executive) MotU in my career. As a conservative midwesterner I never spent above my means, saved at least 10% of my after-tax, and put 30% down when I could finally afford a condo. With 11-12 years left on my 15 year refi I can taste the path to a much lower overhead existence.
    On SocketSite the analysis is usually “home as investment” as compared to arenas with different risk sets. But you can’t sleep in 30 shares of BRK.A or any amount of oil futures. Home ownership has an end-game – my nut will shrink to property tax and condo fees – ~$1500/m in a good part of town. At that point I’ll be a Retired MotU laughing in my leisure.

  75. Posted by Rillion

    “But the point of this thread is that for even those earning “good” tech incomes, most simply cannot buy a place in SF, thus leading to the continuing price declines we’ve seen for the last four years and counting despite a strong rental market in certain areas.”
    Ultimately that just boils down to the fact that rent vs own costs still favor renting.

  76. Posted by Modernqueen

    Exactly, elbee: home ownership does have a good end game.
    @AT: not sure how you can say that SF real estate has not been “remarkably strong” for me and many others like me who bought 26-30 years ago. Ive had a wonderful house to enjoy and sleep in as well as a solid investment.
    Like elbee, I too shall be laughing and lounging the pool in my all cash paid for home in Palm Springs.

  77. Posted by elbee

    More to the topic’s point, early on housing prices were rising faster than I could save – this was very perplexing to even a Starter MotU. Patience is not a MotU Merit Badge, which leads to all of my peers with significant cash flow problems and insignificant savings.
    I was 17 years in the workforce before I bought, and put 30% down knowing that a down protects the buyer as well as the seller from market fluctuations. It seems that Economics (and maybe Math and Common Sense) aren’t MotU Merit Badges, either.

  78. Posted by SFHawkguy

    ModernQueen,
    You got lucky. Period.
    If you would have lived 20 years later and all other things being equal you would probably be in a much different situation.
    And why will you be laughing? Can you only be happy about your circumstances if others are suffering?

  79. Posted by shza

    “But nobody answered my q above about how posters know so much about friends/acquaintances incomes. My point was I,d be guessing for most I know, and only confident at a combined 200 to 300k range say. A very big range.”
    I can speak only for myself, and it’s an industry-specific circumstance. Many of my friends are co-workers or law school classmates at other law firms, and pay at the associate classes is 100% standardized at major national law firms. Here’s the scale applicable in any major firm’s office in SF, NYC, DC, Chicago, or Boston:
    Year Salary (US$)
    First 160,000
    Second 170,000
    Third 185,000
    Fourth 210,000
    Fifth 230,000
    Sixth 250,000
    Seventh 270,000
    Eighth 280,000
    This scale, and bonus scales, are widely discussed in industry papers and blogs. There is even a wikipedia entry on this.
    So among other dual-lawyer households we know, I can tell you exactly what their HHI is (minus bonuses, which tend to be 15-20% of salary at most, unlike in finance). Other friends that have gone on to in-house jobs still come from this culture of everyone knowing exactly what everyone else makes, and are happy to share.

  80. Posted by tc_sf

    “Why do you prefer you source to the one I provided above? I”
    As I mentioned above, I was mainly trying to ballpark take home pay (as it turns out due to a misunderstanding of what UsuallyNamed meant by “tax”). The CBO link just popped up as an early result on Google and is a credible source.
    But I don’t even think there is that much of a discrepancy. If you look a few sentences up in the Forbes article you’ll see that they are quoting effective *income* tax rates. Your article quotes 19.6% for this while the CBO table has 18.5% for 2010 (top 10%). sfrenegade’s points about this being a prediction are vaild. For a pair of $150k earners, about 2/3 of their earnings will get hit by payroll tax maybe adding ~5% to their total ETR.
    Mainly though if you look at the scale of the discussion a few percent difference isn’t that relevant compared to the range of low end leverage (3x) to high end (7x) that people were discussing. For a 300k couple this difference spans from a 900k to a $2.1M potential home purchase.

  81. Posted by Brian

    Who are these people that are paying nearly 20% of their income to the Feds (alone) that make that kind of money? I will go out on a limb here and state that they’re perhaps not approaching their tax situation from the best angle. Wife and I – aggregate income of $425K last year, paid 19.9% to CA and the Feds combined. That was on wages, and stock grants from work – so no estate or windfall sale of long held stocks.
    To everyone saying that folks “got lucky” because they bought a long time ago, we bought a building in 2007 right before everything imploded, and we still feel that we made an incredibly sound financial decision. There are plenty of deals to be had out there that make incredibly good financial sense… if you know what you’re looking for and have down payment money to work with (and I’m not talking 20%, you can do much less than that easily these days and pay under 4.5% on a 30 year fixed).

  82. Posted by Modernqueen

    SFhawkguy:
    huh?..No, I wouldn’t call it luck, just part of the times then. But, seriously: we did sacrifice for a few years to save for a large down. We lived in a small 1 br apt, cheap rent, when many of our other friends had large view apartments in Twin Peaks or Pac. Heights. We didn’t go on elaborate vacations, we had an older car.
    That’s (partly) what it’s about. Of course, good double incomes helped, yes.
    But no, I’m not laughing at the expense of anyone else’s “suffering” as you imply. I’m laughing at those who still keep saying owning your own home is not a “remarkably strong” investment.

  83. Posted by empnor

    Simple – People just starting out don’t have the cash for a down payment. That will change as they save, but with today’s tight lending standards it makes sense that there is greater demand for rental housing than ownership.

  84. Posted by 94123 Native

    I think we’re all assuming that the 300k couple has no education debt, which considering what I know about my friends from college who have gone onto law school, med school, etc can easily be 100k to 300k each especially if they had debt from undergrad! The national numbers about student debt are a little sick – the average debt for undergraduate nationally is almost 20k. For graduate school, the med school average is $156,456, law school is $93,359, MBA is $34,691, and simple MS (aka what a silicon valley type usually needs) is $34,824. They all now think I was brilliant for working straight out of undergrad and having my employer pay for my graduate degree. I know what my friends make as we all helped each other proof each others’ FAFSA paperwork and talk about strategies for debt payoff, scholarships, etc.
    Now assuming you both get that 150k job in the same city (several couples I know ended up being separated for residencies or grad school, which leads to maintaining two households AND travel expenses) and can share expenses, it can take 5 to 10 years to pay off that debt. Then they are ready to buy and they don’t have that down payment unless they borrow from their 401k or go to the parents. If you think about professionals that who also need to buy into their practice (dentists, doctors, some lawyers…), it helps explain why some folks may lead modest lifestyles yet still not have 20% down with a 300k income.
    What if they have a medical crisis or job loss during those years? Even wonderful insurance doesn’t cover everything and chronic conditions can mean an extra 10k a year out the door pretax to pay copays, deductibles, and coinsurance.
    Average student for those with graduate degrees from finaid.org:
    Submitted FAFSA Graduate Education Debt All Education Debt
    (Grad & Undergrad)
    Graduate & Professional Degree Programs Percent Borrowing Cumulative Debt Percent Borrowing Cumulative Debt
    Total 94.3% $46,865 96.9% $62,285
    Master’s Degree 94.5% $34,741 97.7% $51,223
    Doctoral Degree 82.8% $73,885 85.0% $85,366
    Professional Degree 99.4% $92,575 99.9% $105,705
    Master of Business Administration (MBA) 98.2% $34,691 98.9% $53,779
    Master of Social Work (MSW) 91.9% $36,924 91.9% $54,020
    Master of Science (MS) 95.2% $34,824 98.3% $52,102
    Master of Arts (MA) 94.0% $34,357 97.4% $50,102
    Master of Education or Teaching 92.6% $31,540 96.8% $49,286
    PhD 67.5% $58,353 72.0% $69,754
    EdD 94.5% $51,695 94.5% $61,121
    Law (LLB or JD) 99.9% $82,601 99.9% $95,914
    Medicine or Osteopathic Medicine 100.0% $126,152 100.0% $136,474
    Pharmacy (PharmD) 100.0% $66,319 100.0% $88,648

  85. Posted by REpornaddict

    “But nobody answered my q above about how posters know so much about friends/acquaintances incomes. My point was I,d be guessing for most I know, and only confident at a combined 200 to 300k range say. A very big range.”
    I can speak only for myself, and it’s an industry-specific circumstance. Many of my friends are co-workers or law school classmates at other law firms, and pay at the associate classes is 100% standardized at major national law firms. Here’s the scale applicable in any major firm’s office in SF, NYC, DC, Chicago, or Boston:
    Year Salary (US$)
    First 160,000
    Second 170,000
    Third 185,000
    Fourth 210,000
    Fifth 230,000
    Sixth 250,000
    Seventh 270,000
    Eighth 280,000
    This scale, and bonus scales, are widely discussed in industry papers and blogs. There is even a wikipedia entry on this.
    So among other dual-lawyer households we know, I can tell you exactly what their HHI is (minus bonuses, which tend to be 15-20% of salary at most, unlike in finance). Other friends that have gone on to in-house jobs still come from this culture of everyone knowing exactly what everyone else makes, and are happy to share.
    ah..
    thatswhere we differ then. None of my outside work friends are in my profession, and I think barely any of my co-workers are married tosomeone in the same profession.
    I didn;t realize it was THAT insular tbh!!

  86. Posted by Guest666

    The comments regarding buying vs renting remind me of discussions surrounding bonds vs stocks. There will be times where bonds outperform stocks and vice-versa. If you can time the market (ie: rent rather than buy), then you can do well but the trick is timing it right. For those people who look at a house as a home rather than an investment, they can buy a house and over the long term (perhaps 30+ years) they will likely do better than those who rent. Of course, this does not take into consideration rent control and all that that entails.

  87. Posted by tc_sf

    “@shza: Buying a house is far more than just for financial reasons.”
    You say this, but then immediately talk about the financial effects of homeownership costs vs rent and then close with pointing out the financial effects of your home price increase.
    “On SocketSite the analysis is usually “home as investment” as compared to arenas with different risk sets. ”
    NAR has some data that ~85% of home buyers view a home as an investment. Home buying is frequently pitched with investment like terms and even when people such as yourself and Modernqueen profess unconcern with the financial aspect it seems to ring hollow.
    None of this is to say that homeownership is intrinsically bad, but rather that it is folly to believe that homeownership is always good *regardless of price*. Both in an individual sense and as a matter of public policy. How much “stability” is created if anyone can buy with nothing down at whatever multiple of their “stated” income?
    Look at the WSJ blog above and compare the average amount spent on housing vs health care and transportation. Consider how much social effort is spent looking at gas prices and health care costs.

  88. Posted by wrath

    @rillion:
    “What a bunch of bs, just throwing out the top tax rates without any acknowledgement that no one is going to get hit by all of those.”
    of course, you will be hit – you just mean not on all the income.
    plugging in, e.g., 500k (small business owner business income?) and 100k in wage income with a 60k state (CA at 10% roughly, yes it’s less for under 48k but on these numbers that’s not really relevant) gets you:
    – 176k in federal taxes (which, oh BTW, includes over $8k in AMT – they said it couldn’t be done!)
    – 60k or so in CA;
    so, basically, 236k out of 600k or 39.33% effective rate; this does not include sales/use taxes/fees, etc. or the 1% SF taxes.
    would you like to elaborate where I am wrong? Or is Turbo Tax part of the Bush-Cheney conspiracy?
    http://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1
    re: sfhawkguy – in his world the rich get richer through (a) luck or (b) theft – that’s a predicate for redistributive theories – you must first delegitimize the source of people’s wealth before you can convince others that it must be redistributed. I mean, they stole it and they don’t even want to pay taxes on it!

  89. Posted by Guest666

    @tc_sf,
    “None of this is to say that homeownership is intrinsically bad, but rather that it is folly to believe that homeownership is always good *regardless of price*. Both in an individual sense and as a matter of public policy.”
    I think it can be argued that encouraging homeownership is actually poor public policy and has helped to decrease the mobility of the US workforce. Historically, the US was a very mobile society and that was one of the strengths of our economy. However, demographics (aging) and the rise of homeownership has decreased this mobility.

  90. Posted by Brahma (incensed renter)

    Modernqueen wrote:

    Some of the renters I see around my neighborhood, Noe Valley, all drive new cars. I’m talking I see a lot of new 2011 bmw’s, audi’s and lexuses parked on the street in front of their nice little rental flat.
    Hmmm. no wonder they can’t afford a house. What about priorities, and saving?

    They’re probably leasing those cars.
    And being able to lease a 40-50k vehicle is a whole different ballgame than being able to save up 100k cash for a down payment with no help from family members, particularly when your bank five-year CD yield is 1.2 percent and falling.
    It really depends on your household income; if you’re priced out of the market due to your household income level, you can have all the priorities you want, you’ll still be priced out, so you might as well go ahead and enjoy the little luxuries that you CAN afford.
    I personally don’t think this way (and have embraced the monk-like existence that A.T. at 10/03/2011 4:01 PM describes), but I have a lot of friends and associates from college who do.

  91. Posted by A.T.

    This thread has morphed quite a bit. To add one more anecdote, my wife and I were able to save up the down payment to buy our pretty nice (but not grand) 2/2 flat in 1999 just six months out of graduate school – two incomes, no student loan debt (well, my wife had about $10,000), and no trust fund, but a $70,000 bonus helped a lot. So, yeah, with incomes that put us into the top 10% of SF we could do that. And it drained all our savings leading to a pretty ascetic lifestyle for a couple years. But the only reason we did that is because we saved money over renting a comparable place from the get-go. I certainly can understand and respect those who scrimp and save in order to buy a place that will ultimately end up costing less than renting. But to scrimp and save and live like a monk to make a purchase that is more expensive than renting? That is nuts – makes no sense. Rent a place, stash away your savings in sound investments, and enjoy life. If you can find a place that is less to own than rent? Go for it.

  92. Posted by Modernqueen

    @tc_sf:
    Read my post again. Clearly, I said owning was far more than JUST financial.
    And I listed many reasons. Period.
    Wondering: are you an owner or renter?

  93. Posted by [anon.ed]

    People can find good deals in every market. People can make lousy buys in every market. Talking down at people based purely upon the year in which they purchased is idiocy.

  94. Posted by tipster

    Regarding how much people make, it’s simple: I ask. I’m an employer and I am constantly trying to obtain market data on salaries.
    For example, I was speaking with someone yesterday, new college grad, doing exactly what I used to pay $48K for, but then lowered it to $40K two years ago. Then I automated almost all of the job and so now I have a high school student doing it for $14 per hour, 6 hours a week = $4300/yr.
    The gal I was talking to was a UC grad near the top of her class. First year out of school. Exactly like those I used to hire at $48K, then $40K. She’s making $33K. Off by 32% since 2006.
    I’ll ask friends what they are making, and no one has ever not told me. It usually comes up in the context of a complaint about bills piling up, which of course means they aren’t making as much as they should (as opposed to them spending too much, which is *always* the real problem), and that’s when I ask.
    I’ve learned not to ask about spending. That’s where people get more defensive. But clues usually come out. Bozette above mentions she has a stay at home husband and two kids in pre school. Um, no. The stay at home husband can take care of them.
    There are probably 100 other similar patterns in their spending habits that could save money, but my friends will never do it. One of my friends eats breakfast at whole foods every morning for $6, coffees at starbucks, etc, yet complains she wants to move to a nicer place but “can’t afford it”. I have oatmeal with fruit that costs me about 35 cents, and never go out for coffee – I make it myself using TJ’s coffee.
    While we are on the subject of salaries, the people who work for startups do not do it for financial reasons. The typical startup will pay about $15K less per year than you could get on the open market. Over three years, you lose $45K. If the startup gets bought (as opposed to gets sold because it’s running out of money) or goes public, the rank and file employee can expect to get about $300K. But only one in ten (if that) ever gets there.
    So you lose $45K to get an expected payout of $30K. People generally work for startups for the opportunity to work on cutting edge technology. A payout is nice, but is generally not going to do much for you financially.
    You may have worked for three companies before one hits, and by then you are down $150K from your peers, so the $300K payout (which would be lucky) really is just enough to hit parity for the 3 companies before and the three companies you may work for after. That’s not to say there aren’t black swans, or people who don’t hit pay dirt on the first try, or hit it three times in a row, but the typical experience is, from what I can tell, not financially positive from working for startups – you just get to do stuff cutting edge and something in which you may be interested. The payout is a nice bonus if it happens, but it usually doesn’t happen.
    The same thing goes for the investors. You can see that someone investing in LinkedIn made so many millions of dollars from that investment, but what you can’t know is how many duds it took to get there, how much money and time was wasted in that process, and how many other investors who didn’t get to invest in Linked in but invested in the duds lost without ever hitting any successes at all. The newspapers make everything look so rosy.

  95. Posted by wrath

    I’ve invested in LinkedIn and that was a dud……

  96. Posted by meep

    i agree with the inital quote
    it is very expensive to afford a nice detached single family home in sf ,pay for private school afford a nice car and decent vacations.
    presidio heigths 94% of kids in private school
    st francis woods 69%
    forrest hills 63%
    easily $20,000-30,000 per kid
    there is a reason sf has the lowest percentage of children of any california city
    being able to afford a condo in the mission or protero does not equate to being able to afford to have a family in sf
    unless you want your kid going to school with kids from the protero projects or have norteno /sureno family ties.
    mamy people with kids move if they aren’t making $400,000+ a year

  97. Posted by UsuallyNamed

    @Brian
    Wife and I – aggregate income of $425K last year, paid 19.9% to CA and the Feds combined. That was on wages, and stock grants from work – so no estate or windfall sale of long held stocks
    I would really like to know how you did this. Even with maximum possible mortgage – $1M @ 5%, you would only be able to deduct $40k in interest. Add in a maximum 401k contribution and you still have $355k of taxable income. Turbo tax says you pay $92K on this, for an effective rate of 92/425 = 22%. Then add in another 9% for State tax and you get 31%.
    Are you sure the stock was not taxed at the lower capital gains rate? Are you including payroll tax in your calculation?

  98. Posted by wrath

    @usuallynamed
    I once knew a guy who always railed against rich people not paying their fair share and how the rates were very low, etc.
    Now, he ran a business (legal) and the interesting thing was he never wanted to be paid by check…….

  99. Posted by nanon

    It’s interesting that this thread has now reached 100 posts; i.e. it’s interesting to see which stories garner more than 50 posts. Lately, the stories have been macro stories that get people into a political argument, or Fed or bank bashing– but notably, almost never about SF real estate or a property that sold.
    The argument continues here on socketsite about what is happening in the “real SF” because other areas are not faring too well, but this makes me realize that not too many properties actually trade hands in the “real SF”

  100. Posted by katdip

    Just to chime in that you can buy and live a very comfortable life in SF on $125K, but it does take some work. My wife and I both work part time in steady, non-tech fields. Our best years were in the early 00’s – earning $125K combined when we were both out of graduate school and working fulltime. With the help of a small inheritance (40K) and our savings, we were able to buy a SFR in ’02 in a decent (but not primo) neighborhood for ~$500K. The monthly was not much more than renting an equivalent sized apartment. In the past 9 years we have had a kid, took significant maternity and paternity leave, went back to work part time (80% time for me, 50% for her), paid for part-time day care/preschool, and are back to earning $125K per year. Our kid is in a decent public school, but we could afford to put him in Catholic school if it didn’t work out (the $20K+ privates don’t seem possible!). We max out our 401K contributions, are saving some for college, and live pretty well (shop at Rainbow and TJs, eat out often, vacation 3-4 weeks per year). The downsides: we don’t save a lot of spare cash, we drive a 15 yr. old Honda, and the house is now worth what we paid. We don’t regret any of it, and could certainly tighten our belts in a number of ways if our luck turned. Be we also realize how lucky we have been to have decent, flexible, well-paying jobs, supportive friends and families, great educations, and many of the other privileges that come from starting life in the educated middle class.

  101. Posted by FormerAptBroker

    tc_sf at wrote:
    > related to what FmrAprtBroker mentioned for
    > Blogs, my experience has been that most
    > anecdotal info is broadly consistent with what
    > you’d expect from real data.
    The best info from blogs comes when people just happen to mention something and are not trying spin data to prove a point, like “I’ve always liked that area, but wish it was easier to find on street parking”…
    P.S. I’ve decided that SFHawkguy is just flaming for fun and trying to make people mad (vs. someone like fluj who may seem like he is flaming, but I feel truly believes, or at least wants to believe what he posts)…

  102. Posted by sfrenegade

    “particularly when your bank five-year CD yield is 1.2 percent and falling. ”
    If that’s all you’re getting on a 5-year CD, you’re not looking hard enough. You could easily get twice that without any effort, although 2.4 is still low.
    “I think we’re all assuming that the 300k couple has no education debt, which considering what I know about my friends from college who have gone onto law school, med school, etc can easily be 100k to 300k each especially if they had debt from undergrad! The national numbers about student debt are a little sick – the average debt for undergraduate nationally is almost 20k.”
    Yes, I’m surprised more people haven’t mentioned student loan debt in the calculation. By the way, I believe the standard undergraduate loan amount for 4 years is $20K if you are on financial aid, when you include Stafford plus some Perkins loans as calculated by the federal formula. That’s where that number comes from — if you apply for financial aid, at many schools you have to get those subsidized loans first, and then you could get grant aid.

  103. Posted by around1905

    Returning to the original comment that started this thread — that tech jobs don’t pay all that much — the range for ‘real’ tech types (those with graduate degrees in EE or CS) is around 90-170K, with the low-end being maybe a fresh masters degree and the high end being a PhD with about 8 years in the industry. The numbers are considerably lower for the ‘softer’ folks (designers, etc…) These numbers are for mid-paying startups.
    There are no bonuses, except maybe a small (10-15K) signing bonus.
    The source of my numbers: friends who work as mangers in these startups, who are making the salary offers.
    Tipster’s numbers are about right regarding the payout from getting bought, and also about right with regard to the likelihood of it happening.
    As for what folks can afford — it used to be that the max mortgage should be around 3.5X income (assuming no other debt), although with today’s lower interest rates this could be around 4.5X today. Assuming a 20% downpayment, this means a mid-level person making, say 140K, could buy an 800K place. This is, coincidentally, a typical number of a middle-of-the-road place in Sunnyvale or further south.
    But thats not how most of them do it. Most of them are extremely conservative (they are engineers, after all, and largely from India/China/Middle East) and come in with a much larger down payment, with the mortgage being much lower than 80%. They and their spouce works for several years, save like crazy, and and then buy with a mortgate that is small enough to pay on one salary when the babies start to come.
    As for San Francisco — the only tech folks I know who really bought here within the past 10 years or so either had a big windfall (ie they were senior/early in a company with a liquidity event), or else they have been saving slowly for years and finally see an opportunity as prices fall. The younger tech couples — they rent the box-condos in Mission Bay, save like crazy, drop a baby or two, then move south/east when its time for the kid to go to school. Its a cliche but its what happens.
    Interestingly, the folks I know who have school-age kids in SF are either those post-liquidity-even folks who buy themselves out, or solidly lower-middle-class folks who take what they get with the public school system and don’t really make huge demands for their kid’s education.

  104. Posted by 47yo hipster

    Some pretty interesting anecdotal personal financial info here (or confessionals perhaps.) I think the takeaway is that people have vastly different spending habits, which more than offset the range of incomes we’ve discussed: namely a low of $100k to a dual income high of about $400k. We’ve seen people making $120k buy $500k condos and couples making $400k renting, as buying does not meet their personal expectations. And most of the discussions have centered on w-2 income and not investments/windfalls/or losses. Add those in and the variance will be even greater!
    As for RE buys, there are good and bad buys in almost every market. Like a few others here, SF RE has been good to us. I leveraged my first tic/condo brought in the mid 90’s into a few SF properties and now live on the rental income alone. (And anecdotally I can confirm many of the salaries mentioned here; as a landlord I’ve rented to docs, lawyers and scores of tech workers and get to see their w-2’s when they apply.)

  105. Posted by middleclassjoe

    “Interestingly, the folks I know who have school-age kids in SF are either those post-liquidity-even folks who buy themselves out, or solidly lower-middle-class folks who take what they get with the public school system and don’t really make huge demands for their kid’s education.”
    around 1905 – funny, my experience is different, because I don’t run in tech circles. Most of the SF owners I know are not tech at all, but are solidly middle class at least by SF standards. They work in gov’t, education, non-profits, some medical, some finance, some small business. No idea what they earn, but most likely in the $80-$200K range. Almost all are dual income families, though a couple have one spouse who has been laid off. Most send their kids to public schools that they are happy with, but a few have made some big sacrifices to go private (interestingly, my friends with the least money have gone that route – maybe financial aid?). Now NONE of them live in the “real SF” – they’ve chosen to live in houses or flats in the mission, sunnyside, portola, sunset. Maybe one out of the 10 I’m thinking about spent >$800K, and most probably considerably less than that. But they have all chosen to live the City and make it work for their situation.

  106. Posted by 47yo hipster

    Regarding tech start up windfalls- so tipster is saying that the average windfall is about $300k for a non founder or core exec? And that it happens 1 of 3? Can’t comment on the $300k estimate, but I thought that way more than 2 of 3 fail; more like 8 of 9 fail. Or perhaps some fail worse than others? Meaning some losers are sold for some value, whereas the ‘winners’ Are purchased for a premium (I.E. The windfall events)?? Deets please!

  107. Posted by around1905

    middleclassjoe — the SF owners you know are the folks I am referring to as lower-middle-class. And by the tiger-mom standards of the asian tech families I know, they aren’t demanding much from their kid’s schools. So I think we are talking about the same people.
    As for the tech folks….until pretty recently, there wasn’t actually that much ‘tech’ in SF. Everybody worked down south, and lived in SF because they had a non-tech partner with a job up here, or else the really loved SF and couldn’t face living on the Peninsula. This was back in the days when many tech folks were north american or european born, and came through undergrad in US schools where you were taught to be a bit romantic. I was one of those folks.
    Nowadays, there are hardly any non-immigrants in ‘high’ tech (ie graduate degree engineer types). They are largely asian/middle eastern folks who are only here because they made it through all the hoops — getting near the top of their class, getting an offer from a tech company, the H1B process, etc…. They are practical people who have to work long hours; even if they live in Soma because their partner has a job up here (ie in healthcare research), once there are kids the commute makes SF as far away as the moon They simply will never buy in SF.
    It will be interesting to see what happens with the new software boom. This has a lot more North Americans and Europeans in it, and a lot of the jobs are here in SF. Unlike the last startup bubble software companies in SF, the new crop is likely to stick around. On the other hand, this is not really ‘high’ tech — the programmers are a bit easier to come by, haven’t spent so many years in school, and the pay is less. Plus they are younger — a few years out from buying (more wind in the rent sailboat, less in the buy…)

  108. Posted by shza

    @47yo hipster, you misread tipster’s post, which said “1 in 10 (if that),” not 1 in 3:
    “If the startup gets bought (as opposed to gets sold because it’s running out of money) or goes public, the rank and file employee can expect to get about $300K. But only one in ten (if that) ever gets there.”

  109. Posted by Wai Yip Tung

    I work in tech startup and I can backup Tipster’s number. Although expecting $300k payout for a rank and file might be on the optimistic side. While I think I have a respectable income, it is kind of sucks to see it comes in the low end in this group and it trails lawyers by a big margin. But that is only if you tie your self worth to your earning. Trading a big company job for startup put me in financial strand. But I love what I’m doing. I love the culture, the coworkers and I even love my commute! I am feeling lucky.
    Now to put on my accountant hat. We bought a house before dotcom bomb with a household income around $150k. Mortgage back then seems to be as easy to get as before the credit crunch. Now we make less but have 2 more people to feed. We eat out several times a week (in $ or $$ places). Grocery spending is around $600-1k. Wife shops in whole food despite my discouragement. We make 1 or more overseas trip per year. But with 4 people this starts to hurt. I usually aim to max out on 401k. But it probably not going to look good after I updated this year’s financial projection. The reasonable mortgage help keep us afloat. Although we have really outgrown our cottage and feel stuck there.

  110. Posted by tc_sf

    “Lately, the stories have been macro stories that get”
    I guess the question is if the macro focus is unwarranted or not?
    A great deal of the anecdotes above could apply equally well to other parts of the country if appropriately scaled down. (wide variances in HH’s fraction of income devoted to saving, two incomes going to one after kids come, unexpected expenses, needing to save for retirement,…) And I haven’t seen that much evidence that credit issues such as low/no down, reduced standards were much different here then for the nation as a whole.
    With some exceptions such as the high cost loan limit, credit and lending factors tend to be macro and national.
    I do think that the outlook for tech is in general brighter then for the country overall and I do give some credence to the “superstar city” theory. But in my mind, the credit issue looms large even in SF.

  111. Posted by Wai Yip Tung

    @around1905, tiger mom is an illusion. She is like the $400k annual income mom speaking and not aware of the world is actually not similar to her.

  112. Posted by Wai Yip Tung

    Sorry this is not an allusion to the $400k mom poster, whom I fully respect. I mean tiger mom is like a very high income person who is out of touch with the rest of the world.

  113. Posted by 47yo hipster

    Shza- but then he went on with:
    “You may have worked for three companies before one hits, and by then you are down $150K from your peers, so the $300K payout (which would be lucky) really is just enough to hit parity for the 3 companies before and the three companies you may work for after.”
    I guess my question is : Say you join an 8 people start up that has $1-2 mil to spend. You should get a decent % of the company in options for coming in so early right? By decent I’m guessing 1/4 to 1/2%? so if they just do so-so and get brought out for a few mil, you’re not getting much. And if they become Facebook or twitter you’ll get a few mil. So is $300k kinda an average? I’m just guesstimating on my #’s above. Those with more experience, please weigh in.
    Reason I’m asking: I was under the impression that more than a lucky few (non exec) tech workers made ‘some’ decent money ($100k+/-) from options, which some used as down payments. These are the guys that are driving the value of my tic’s, hence my interest.

  114. Posted by 47yo hipster

    1905- i must take exception to your characterization of most SF tech workers being foreigners. Judging by the applicants I get, there’s a broad variety, Inc. Plenty of Anglos. But i will say that many are from out of town, coming in for new jobs. But still, probably at least 50% Anglo.

  115. Posted by 47yo hipster

    Well educated, ambitious and SF-as-destination are really the common denominators more than ethnicity.

  116. Posted by Wai Yip Tung

    $100k is not much. Option vests in 4 years. So it is like 25k a year. Now take a 40% off for tax. This is the true story of startup option for most people.

  117. Posted by meep

    interesting.
    some families make $400,000 and feel they are barely getting
    other families feel they are doing well on $125,000
    it all depends on what your expectations are

  118. Posted by SFHawkguy

    middleclassjoe wrote:
    “They work in gov’t, education, non-profits, some medical, some finance, some small business. No idea what they earn, but most likely in the $80-$200K range.”
    Then around1905 responds:
    “middleclassjoe — the SF owners you know are the folks I am referring to as lower-middle-class.”
    Uh, how do you figure? As I linked to above, the median family income in SF in 2009 was $72,000. That’s The middle class would therefor be a range around that median. Something like $50,000 – $100,000. Those that make above $100,000 are in the top 15% nationally, and probably the top 20% of San Francisco. I personally would cuttoff the “upper class” at about the 20% mark, so around $100,000 for SF.
    I guess it just goes to show how many here view these issues from the perspective of the upper class.

  119. Posted by SFHawkguy

    FormerAptBroker:
    “P.S. I’ve decided that SFHawkguy is just flaming for fun and trying to make people mad (vs. someone like fluj who may seem like he is flaming, but I feel truly believes, or at least wants to believe what he posts)…”
    I am indeed intentionally provocative, in part because I enjoy debating issues like this and it makes it more fun. But I am sincere and believe strongly that capitalism is killing this country and this planet. I am attempting to counteract the decades of Teabuggery and neoliberal propaganda that has been perpetrated on this country, so I am often forced to take strong positions to counteract the fallacious neoliberal assumptions that are rampant in our society, and this site.
    I’m fighting the good fight one comment at a time.
    p.s. I suspect that people like FormerAptBroker feign confusion about their philosophical opponents’ motivation to dismiss people they disagree with. One sees this with the criticism of the Occupy Everywhere protests–uber capitalists pretend to not understand the complaints.

  120. Posted by SFHawkguy

    p.s. if anyone want to see the Sesame Street episode where they introduce the Hungry Muppet and talk about the 1 in 4 children in this country who don’t know where their next meal is coming from, it’s here: http://www.youtube.com/watch?v=vhJ6hfbn4x8
    This is the exact opposite population segment from the one this post is geared for. The bottom 20% is worried about being homeless and not being able to feed their children. The upper 20% is having to readjust their assumptions–but out of all the segments they are about the only ones still getting wage gains and of course the ones with the wealth in this country.

  121. Posted by Rillion

    “would you like to elaborate where I am wrong?”
    I already did. As your detailed answer indicates (I’m not going to bother checking your math cause its not relevant to the point) the combined tax rate is 39.9%. Yet it seems low when the rates you mentioned at first were 35% federal, 15% payroll, 10% state, etc. Just adding up those you mention appears to indicate a whopping 60% tax. It isn’t until I pointed out that just throwing those numbers out there is misleading that you acknowledge that yeah, not all the income is going to get hit by those percentages.

  122. Posted by tc_sf

    “I think it can be argued that encouraging homeownership is actually poor public policy and has helped to decrease the mobility of the US workforce. ”
    I agree. Mobility probably isn’t much of an issue for people in the tech ecosystem near a major hub like the Bay Area. But I think it’s a real problem for the country as a whole. Particularly for one company towns, or even one industry towns where the industry is in decline.
    For a segment of the population that isn’t prone to saving, the forced saving aspect of home ownership was beneficial in my view. But allowing cheep and easy cash-out refinancing has basically negated that benefit.

  123. Posted by wrath

    @ rillion:
    I threw out the rates – I didn’t suggest that you add them up. I think most people here do realize that you can deduct state from federal. I’m happy to dumb down next time but was saving time.
    In any event, the point was that commenters prior to you were suggesting that the rich (anyone who makes more than $100k according to some here) had effective rates of around 20%. This simple example shows that it’s twice that – not counting various additional taxes.
    And all of this is disregarding necessary expenses that are not deductible or of limited deductibility. Thus demonstrating that DISPOSABLE income is far lower that even those numbers show.

  124. Posted by wrath

    this youtube video shows how the Democrats have politicized even children’s shows. That is precisely why we should have defunded public radio and tv years ago.
    Nonetheless, it shows that most of his knowledge comes from some sort of twisted muppet/guevara collage.
    Say no to Sesame Street – say yes to Wall Street!

  125. Posted by SFHawkguy

    tc_sf:
    For a segment of the population that isn’t prone to saving, the forced saving aspect of home ownership was beneficial in my view. But allowing cheep and easy cash-out refinancing has basically negated that benefit.”
    Yes! People didn’t have to worry so much about what year they bought or being unlucky or lucky, it used to be a much more conservative and stable way to finance a home.
    The Masters of the Universe figured out a way to prey upon peoples greed and base needs (shelter) to create a bubble. They lured people into their trap with a little down payment, or cash out mortgages, or stretching beyond 3 X income, and liar loans. Society would be a lot better off if we shut down the casino–sure, some people won’t win as big as they are in the casino system–but the majority will be much better off.

  126. Posted by SFHawkguy

    wrath,
    Like I implied above, you really need to look into the definition of sociopath. Ignoring hungry children or mocking a show that simply wants to bring the fact to light is the very definition of someone that lacks empathy. Usually, people like this were abused themselves as children.
    And I’m not a Democrat. The Democrats are on your side, you’ve just been bamboozled by right-wing propaganda into thinking the neoliberal corporatist Democrats are “socialists.”
    To you all those mostly brown and black hungry children are sub humans that you would never have your children associate with (in a public school), let alone even acknowledge their existence. They all live in the Ghetto (not really, but you wouldn’t know reality if it hit you over the head) and deserve to go hungry because of their parents’ perceived sin of not getting one of the low paying jobs that 4 other people are also trying to get.

  127. Posted by wrath

    @ sfhawkguy:
    thanks for telling me once again how I feel – your prejudices are once-again striking.
    their parents’ sin is not being able to afford so many children
    and, I never, said they should go hungry – as you point out – I don’t care – what I do care about is that their parents’ unfamiliarity with or disregard of the benefits of prophylactics affect my pocket – a pocket that I was not born with (and indeed was born with far less than your so-called “brown and black hungry” sob stories were born with)
    but, since you are “going racial” lemme ask you – why do you hate white people so much?

  128. Posted by Modernqueen

    Completely off topic. Take it private, please.

  129. Posted by wrath

    and, for the record, I didn;t say anything about getting “low paying jobs” – in fact, as you pointed out above, I said “MBAs”.
    I will attribute the slip to the degenerative brain disease that is so obviously affecting your already limited faculties.
    I will also advise you in case of any further confusion to scroll up and review my prior postings first.
    I will add that if you are having difficulties scrolling up b/c the mouse you bought with your food stamps (btw that’s a fraudulent use of government handouts but I choose not to report you) does not have a scroll wheel, you can achieve the same result by using the up arrow on the keyboard.
    And, of course, you’re a Democrat – there are only two kinds of people in the world – Americans and Democrats.

  130. Posted by wrath

    @ modernqueen – I apologize – once the again the troll hijacks the topic and I let him snare me into a sysyphean debate.

  131. Posted by elbee

    Encouraging home ownership for stable owners in a stable market is good for a nation – people build equity instead of flushing money down a rent toilet forever. My neighbors from 1967 still live in that house, free and clear for many years.
    Encouraging home ownership beyond or at stretched means on the theory that it’s an investment, encouraging constant refinances either to lower payments or take cash out, is closer to gambling, especially for young families at the start of their careers where relocation is a significant risk.
    If there’s no path to paying it off then it’s the same as keeping a life-long high credit card balance at a somewhat lower interest rate. Good for the banks, bad for the consumer. As we’ve seen, people that got in early did well as long as they got out before the music stopped. For everyone else it’s “Hello, Ponzi.”
    This has little to do with political parties, starving children on market street, dynamic parking meter rates, or the progressive/moderate balance of the SF BoS.

  132. Posted by middleclassjoe

    Wow around1905, you must live in a strange world where people making $80-200K, own their homes, and live well in SF are “lower middle class”; and who are all university or higher-educated somehow “aren’t demanding much from their kids school.” How do you calculate that – based on the price tag for the school, or the pedigree of the cars at drop-off and pick up?

  133. Posted by Modernqueen

    @wrath: no problem. SFhawkguy loves to stray from the topic a lot and tell us his view of the universe.
    @elbee: Yes, you are completely right on and essentially saying much of what I have been saying as well. All good points.

  134. Posted by Jimmy (No Longer Bitter)

    Here’s the equation to calculate someone’s class:
    Family Income / (Median Income * 5) 1: Upper Middle
    You get bonus points for having a car that cost over $75,000 when new (and you bought it new) or a handbag that was over $2500 at Neiman Marcus.

  135. Posted by SFHawkguy

    The topic for discussion is a hypothetical 28 year old person and the cost of living in the City (some may want to limit it to just “tech workers”).
    I pointed out that 37% of the families with children in this segment (under 30), live in poverty. I also pointed out that the median income for San Francisco households is $72,000, and that I thought people were focusing too much on the very top segments (as well as “professional” occupations I might add). Also, I pointed out that buying only makes sense over renting in the very lowest segments of housing.
    The thing with the poverty and hunger is just to remind people that those in the bottom 50% have had to “adjust” the most, and in the harshest way, to our new austerity. There is massive suffering happening because of the housing bubble and we need to not only restore justice to the system, we need to take affirmative steps to remedy all the damage that the bubble has caused.

  136. Posted by shza

    @ elbee: “Encouraging home ownership for stable owners in a stable market is good for a nation – people build equity instead of flushing money down a rent toilet forever.”
    The “building equity instead of flushing money down a rent toilet” point only makes sense if the rent-versus-buy equation pencils out in any given instance. Which, more often than not over the past half-decade, it has not.
    If I were to purchase the same home I’m renting, my property taxes alone would be more than my rent. (That’s Prop 13 at work, subsidizing my rent to an owner that is, for whatever reason, not sharply profit-driven.) That’s before we even get into mortgage interest, which would be significantly higher. No equity-building in either of those payment streams, so you’d need quite a bit of growth for it to make any sense. And in the last 5 years, we’ve had the opposite.
    Granted, I’m an extreme example because my rent is *way* below market. But there are plenty of less extreme examples that fall on the same side of the ledger in SF, where people have been bilked into thinking they should break with history and actually pay a “premium” to buy (borrow) versus rent.

  137. Posted by FormerAptBroker

    SFHawkguy wrote:
    > I suspect that people like FormerAptBroker
    > feign confusion about their philosophical
    > opponents’ motivation to dismiss people
    > they disagree with.
    My close friends have very different views on life/politics/religion but we all get along because we respect each other. I enjoy “talking with/debating” people I disagree with, but I try and avoid “fighting/yelling/flaming” people I disagree with (but have to admit that I can’t help myself at times do make a snarky comment/post every now and then)…

  138. Posted by shza

    ^^^^^^^^^^
    Correction: our property taxes on the same house would be roughly half of what we pay in rent. I don’t want to detract from the point with an overstatement. Property taxes plus mortgage interest would be significantly higher than our rent, even after deductions.

  139. Posted by SFHawkguy

    “Encouraging home ownership beyond or at stretched means on the theory that it’s an investment, encouraging constant refinances either to lower payments or take cash out, is closer to gambling, especially for young families at the start of their careers where relocation is a significant risk.
    If there’s no path to paying it off then it’s the same as keeping a life-long high credit card balance at a somewhat lower interest rate. Good for the banks, bad for the consumer. As we’ve seen, people that got in early did well as long as they got out before the music stopped. For everyone else it’s “Hello, Ponzi.””
    Right on elbee!
    Along those lines I noticed that the spread between the 15 year mortgages and 30 year mortgages has decreased pretty dramatically recently; it’s less of a deal to go with the 15 year now than it was even a month ago. One benefit of slowly deflating the bubble, from the FIRE sectors’ point of view, is that people will be pushed into 30 year loans because they will most likely still be stretching to buy a home. You also see the banks encouraging people to “modify” their loans by stretching it out and putting people into 40 year loans.
    That’s why I think the secret for the savvy future MotUs (or other young people), is to live radically below their means. For someone making the median or even the upper middle class, to buy a house in Bayview for 2X or 2.5X their income, and to put 20% or more down and get a 15 year loan. Of course I think we need a societal wide response as well–regulation that basically forces this “conservative” scheme on almost everyone. A return the pre-bubble system would be a good first step.

  140. Posted by SFHawkguy

    And by “Bayview” I mean one of the few areas in San Francisco where it may be cheaper to buy rather than rent. I haven’t really looked into Bayview specifically, but generally it seems that buying is cheaper in the lowest segment.
    The East Bay has a number of areas that are definitely getting cheaper to buy than rent but I don’t know of many in San Francisco.
    And szha, I believe you. In the popular SF neighborhoods it seems like a no brainer to me that it is much cheaper to rent.

  141. Posted by tc_sf

    ^
    To elaborate on this, it seems that any encouragement is really a matter of scale. I do think that there is some public benefit to homeownership worth encouraging and individually many people would rationally pay some premium to own rather then rent.
    But the amount of any preference towards ownership can’t be limitless. Specifically modernqueen’s ascribing “far more” value to intangibles then the financial aspect given the recent past seems far out of scale to me.
    Looking at your story above of working and saving for 17 years to get a 30% DP and noting that the case shiller index for the MSA is down more then 30% from the peak paints a grim picture for the average outcome of a MSA denizen who followed that path at the wrong time. No rational person would would ascribe far more value to “pride of ownership” then to their lifetime savings being wiped out (and as shza notes actually having higher monthly costs)
    What really matters here is not just one individual’s view, but rather the view of the majority of people in the market. I don’t think you can have a stable price efficient market if the majority of participants are unconcerned with price and valuation.

  142. Posted by dt

    I consider myself a strongly dispassionate person when it comes to home ownership. We were in a rent controlled house that was slowly falling apart, that barely kept out the weather, that was growing too small for our family of 5. Yes, plenty of people make do with 1700 square feet for their family of five. But both of us had hobbies that required more space, hobbies that were very strong interests that neither of us could pursue. We looked for housing in our community (EB) starting in 2007 and averaged one offer per year. We went from the lowest of 25 bids the first year to the only bidder the year we bought (last year). It cost about 20% more than renting something minimally adequate, not including the down payment opportunity cost. But for that extra 20% we got something far far exceeding the minimally adequate. We bought at a level assuming the MID went away, federal and state taxes went up, and the economy stagnating for years. We don’t consider it an investment, but we bought it like an investment: architecturally interesting, most desirable location, perfect layout for raising a family and entertaining, extremely well built, and a dream for our hobbies. Not an investment. A 20% monthly premium over renting. No pride of ownership and not living the American Dream. Just a better situation all around than the alternatives. Choose the best among alternatives.
    Ref buying in SF: I stick to my earlier comment. Someone making 100k can buy 1/3 the SFH’s in SF today, and someone making 200k can buy 80% of the SFH’s. These aren’t high salary levels for a couple.

  143. Posted by meep

    it costs around $450,000 and up to LIVE WELL in sf
    you can survive on $150,000 but you are not living well
    a 911 ,quatroporte or m6 maybe an aston if you want to be different than everyone else
    house single family detatched in good area $1,250,000+
    private school $20-30,000 a year
    (sf has 1 out of 28 middle schools ranked 10 by great schools
    EVERY middle school in palo alto is ranked a 10)
    2 or 3 trips to europe or asia a year
    ski weeks colorado or whistler

  144. Posted by wrath

    most people don’t need a quatro or even a duo porte or whistler. But you can’t buy a decent house in a decent area for 1.25m.
    on the other hand, you can in lamorinda where your schools are better than PA. of course if you have to commute to PA, it could be a bit of a pain – on the plus side you’re increasing your carbon footprint.

  145. Posted by meep

    wrath- you are correct about a decent home costing
    more than 1.25m.
    i just did not want to be the one to point out that a nice home is 15+ the nmedian family income.
    harsh.

  146. Posted by wrath

    correct. a decent (2500 sq. ft.) house in a decent area (to me inner richmond, Rhill, pac/presidio heights, telegraph hill) with a nice (for a city) back yard will run you approximately 2m and up – maybe you can do inner richmond at 1.8 or something like that. and in pac presidio there really aren’t houses of that size anyway (or few) except maybe former carriage houses. unless maybe you are ok living on California.
    you can get a cheap car – I don’t get people who showcase their wheels. I mean if you’re Larry Page, maybe it makes sense to buy an F-50 for the experience, why not – but for most other people, why bother?
    I am not sure most people have time to take 2-3 vacations to europe/asia a year – i go locally for a weekend

  147. Posted by shza

    Also, actually having the lifestyle meep describes @ 1:27 PM would leave little, if anything, left for someone making only $450k/year. That sounds like a $750k/year lifestyle to me, and that’s about where I’d draw the “upper class” line if you’re going to do it based on income, which is a poor proxy for wealth.
    “i just did not want to be the one to point out that a nice home is 15+ the nmedian family income.”
    Don’t be bashful — that’s the whole point of this thread.

  148. Posted by sparky-b

    wow, those last few comments are ridiculous and so personal on what makes “living well”. They are opinion on what a good hood is for starters and therefore what you can get for the money, let alone what makes a good vacation.
    I have no interest in any of those cars. I have a truck. Wife has an SUV, but wants a minivan.
    We love our house, and it didn’t cost $1.2M and it’s not in the list of hoods.
    We like our daughters school, we are sending the other one there next year. Not nearly that much money.
    2 to 3 trips to Europe or Asia a year. Not when your kids are in school, or even something that would be fun for them. But we go away 5 weeks or so a year.
    I love not having a big commute and can’t imagine driving in everyday.

  149. Posted by tc_sf

    “Ref buying in SF: I stick to my earlier comment. Someone making 100k can buy 1/3 the SFH’s in SF today, ”
    The focus on “can buy” is the issue here. As a thought experiment it’s easy to see how with sufficiently low lending standards someone making even 50k/year could buy a great deal of the homes in SF. The key is to what extent is purchasing power being driven by changes in income vs changes in leverage.

  150. Posted by dt

    I’m using very conservative traditional lending standards, with 20% down and monthly payment not exceeding 34% of net income.
    Look at SFH’s sold on Redfin over the last 3 months. Someone making 100k, under conservative lending standards, could have chosen from 1/3 of SFH’s in SF, while someone making 200k could have chosen from 80% of SFH’s in SF.

  151. Posted by shza

    Someone making $100k has what, $70k left after taxes? (70k*.34)/12 = less than $2k/month for mortgage payments & property taxes. 200k gives you only twice that. There are some tweaks for tax benefits and presumably someone making that little money isn’t being hit with the AMT, but I still don’t get how these people are affording much of anything in SF without leveraging *much* more heavily than you describe. It’s unclear to me how these $100k people are even finding affordable rents on anything bigger than a 1BR.

  152. Posted by dt

    Run some tax simulations in Turbo Tax. Someone making 100k per year who has a 500k house has a taxable income of 80k per year due to the MID and state property tax deduction. Adding the monthly payment (4% interest!), property tax of 1.5%, tax benefits, and insurance, it’s about 2200 per month. 70k after tax is 5800 per month. What’s the big deal? Our monthly net cost on a 900K loan is $4700 per month. Someone making 200k is bringing home at least 11k per month net.

  153. Posted by meep

    sparkyb -“We like our daughters school, we are sending the other one there next year. Not nearly that much money.”
    some of my comments were subjective but san francisco poor school system is not and if you can’t afford to spend $40-60,000 to send your kids to the best schools maybe putting less priority on commute may be in order

  154. Posted by sparky-b

    Your right I should focus on getting a 911.
    I am pretty sure I didn’t go to “the best” school when I was young, but I still got a good education there. Just because something is the most expensive doesn’t make it the best, by the way.

  155. Posted by meep

    san francisco has the lowest percentage of children of any city in the state
    over a 3rd of the middle schools have a great school rating of less than 3
    the constant refrain for people moving out of san francisco when they have kids is i can’t afford private school and i don’t want to send my kid to sub par schools
    as per the article below:
    S.F. losing kids as parents seek schools, homes
    S.F. DEMOGRAPHICS
    Family flight a growing problem despite city’s efforts
    June 19, 2011|Heather Knight, Chronicle Staff
    http://articles.sfgate.com/2011-06-19/news/29676021_1_universal-health-care-jennifer-siebel-newsom-fewer-kids
    many parents are concerned about sub par schools

  156. Posted by tc_sf

    “Look at SFH’s sold on Redfin over the last 3 months”
    My main point was that the focus on what people can buy for some income is misplaced compared to what or if they should buy and for the market in general what people are buying (relative to income).
    You might be able to infer something about what people are doing by looking at what people could buy given some assumptions. But the correlation might not be that strong. Taking your specific example, when I do that Redfin search for SFH’s <$500k the results are dominated in south of the freeway places like bayview, hunter’s point, excelsior… Not places I expect many tech workers to be buying. If you compare the sales locations to Google shuttle stops for example you won’t see much overlap.

  157. Posted by *

    i get the feeling meep is insecure and overcompensating for his(her?) lack of wealth

  158. Posted by meep

    san francisco has many crappy schools
    san francisco has the lowest percentage of kids of any city in the state
    according to the article refrenced below many families leave because the combination of high housing costs and private school are not sustainable
    i get the feeling some of your are deluding yourselves or feel guilty about sending your kids to sub par schools
    http://articles.sfgate.com/2011-06-19/news/29676021_1_universal-health-care-jennifer-siebel-newsom-fewer-kids

  159. Posted by UsuallyNamed

    The San Francisco school system is “bad” the same way that $200k/yr is lower middle class.

  160. Posted by meep

    ACCORDING TO GREAT SCHOOLS
    sf has one middle school ranked a 10 and nine middle schools ranked 3 or less
    in palo alto EVERY middle school is ranked a ten
    in my opinion you seriously rethink your priorities if you make $200,000 a year and have to send your kid to a school ranked 3
    wait a minute. thats exactly what that article i refrenced said families are doing when leaving sf

  161. Posted by sparky-b

    ^^
    All 4 palo alto middle school that had a rank were ranked a 10, is what you should say.
    Of course 3 of the 5 East Palo Alto school were at 3 or less.
    And of course there are a bunch of 8’s and 9’s. And it’s only for the public schools and not charter or private.

  162. Posted by UsuallyNamed

    San Francisco Unified School District is an above average school district. There are a great many good schools and everyone I know that has made a serious effort has gotten into one of them. In some people’s mind “above average” equals “bad,” oddly enough.
    In my opinion if you work 70 hours a week and farm out your child raising to someone for hire you need to seriously rethink your priorities.
    Your statement about middle schools is not correct, btw. I just checked, here are the scores for SF middle schools, according to Great Schools:
    AP Giannani – 9
    Presidio Middle School – 9
    Roosevelt Middle School – 8
    Aptos Middle School – 7
    Herbert Hoover Middle School – 7
    Marina Middle School – 6
    Francisco Middle School – 4
    James Lick Middle School – 4
    James Denman Middle School – 3
    Martin Luther King Junior Academic Middle School – 3
    Horace Mann Middle School – 3
    Visitacion Valley Middle School – 3
    If you add in the K-8 schools, you will see a number of 8, 9 and 10 ranked schools as choices for middle school.
    You were saying?

  163. Posted by A.T.

    Good luck getting into one of the two not-terrible middle schools in SF. And even those two have test scores that are put to shame by the good school districts and by the private schools. Test score data are public.
    Within the SF public school system, there are about 4 okay elementary schools, 2 not-terrible middle schools, and Lowell. If you are one of the few whose kids get into one of those – fine. You’re in a lucky extreme minority.
    For all the others, from an educational standpoint, one is doing one’s children a disservice by sending them to SF public schools. If you can’t afford private school and you don’t get into one of these 5% of okay schools, I can’t imagine how one could justify not moving nearby to where the public schools are far better. Sure, SF is fun (it’s why I live here) but putting one’s children first is a pretty obvious thing to do.
    Meep is right. SF has the lowest population of children for a reason. The schools are truly terrible. One can pretend that is not so, or one can go where the schools are far better.

  164. Posted by meep

    these public schools also serve middle school age students
    Everett Middle School – 1
    Brown Junior (Willie L.) Elementary School-1
    grades 4-8
    Visitacion Valley Middle School-2
    Cleveland Elementary School-1
    grades k-8
    Civic Center Secondary School-2
    gradesk-12
    Paul Revere Elementary School-2
    grades k-8
    craptastic
    many parents want 9 or 10 for their kids
    this ain’t reassuring when half the schools you listed are under 5:
    AP Giannani – 9
    Presidio Middle School – 9
    Roosevelt Middle School – 8
    Aptos Middle School – 7
    Herbert Hoover Middle School – 7
    Marina Middle School – 6
    Francisco Middle School – 4
    James Lick Middle School – 4
    James Denman Middle School – 3
    Martin Luther King Junior Academic Middle School – 3
    Horace Mann Middle School – 3
    Visitacion Valley Middle School – 3
    did you read the article ?
    sf is losing school age children .it’s a statistical fact.
    when asked why it’s schools not as good as suburban ones and high housing costs.
    are you trying to deny this ?
    are you arguing the schools are as good as palo alto and lamorinda and the housing is cheaper in sf?
    give it up.

  165. Posted by El Bombero

    Public school + liberal social engineering agenda = crap education. That’s why the sensible parents just say no to SFUSD.

  166. Posted by UsuallyNamed

    Housing is cheaper in Palo Alto than San Francisco? “Suburban” schools are all superior to San Francisco schools? What about EPA, like Sparky-b mentioned? Daly City? Richmond? A few extremely expensive cities have uniformly good schools. Most are about average, surprisingly enough. Most schools everywhere are about average. It doesn’t take a rocket scientist to figure out why.
    Willie Brown school is closed, which you would know if you were as much of expert at public schools as you make yourself out to be.
    Other schools that serve K-8 kids:
    Alice Fong Yu Elementary School – 10
    Lawton Alternative Elementary School – 9
    Claire Lilienthal Elementary School – 9
    Rooftop Elementary School – 8
    San Francisco Community Alternative School – 8
    Bessie Carmichael/Fec School – 4
    Why didn’t you list those? Did you forget? Are you engaged in a deliberate distortion of the facts to support your already decided upon mind?
    Half of the public schools serving middle students are above average according to Great Schools. Do you agree with that statement meep?

  167. Posted by UsuallyNamed

    @A.T.
    AP Giannani API scores 2010 – 874
    Presidio API scores – 871
    San Mateo school district middle school test scores:
    Abbot Middle – 821
    Borel Middle – 812
    The Bayside S.T.E.M. Academy – 714
    Is that kind of good school district that puts San Francisco “test scores to shame”?
    Median list price in San Mateo $639k.
    Median list price in San Francisco $650k.
    Private schools don’t have test scores, they are not tested. You have no idea what you are talking about.
    Giannani has 50% low income students. Test scores are highly correlated with family income. What percentage of students in lamorinda or Palo Alto are low income? I am willing to bet that middle class students have similar test scores in San Francisco as they do even in this tiny cherry picked representative of “suburban schools”. Wait until you have kids, then I will consider your opinion, otherwise you are just talking out your ass.

  168. Posted by meep

    you people are distorting the facts
    did you read the article ?
    sf is losing school age children .it’s a statistical fact.
    as infants reach school age many parents leave
    when asked why -it’s schools not as good as suburban ones and high housing costs
    http://articles.sfgate.com/2011-06-19/news/29676021_1_universal-health-care-jennifer-siebel-newsom-fewer-kids
    is newsom lying?
    is the sf chronicle ehgaged in a “distortion of the facts”?

  169. Posted by A.T.

    No, I’m thinking of the better school districts. Look at Palo Alto’s three middle schools (API of 957, 934, 927) or Piedmont (API of 943).
    Of course the private school students take standardized tests (but they are not public). You just need to ask them and they give you the results. I’m going through this process now. I have two kids, and the oldest is approaching school age. Private school all the way, baby (except, perhaps, Lowell for high school if they get in).
    Other than Lowell, which is a fine school (and my alma mater), even the tip-top SF schools, which one is highly unlikely to get into, score lower than the average school in the good school districts. The schools in those districts are free too — why the heck would one send their kid to mediocre SF schools rather than moving nearby to far better offerings?

  170. Posted by wrath

    SF public schools should be closed and the money returned to the taxpayer – with interest and an apology.
    and the “teachers” should be sent to Corcoran (where their former “students” already reside)

  171. Posted by UsuallyNamed

    Oh, API Scores for Asian students at my child’s school are 907. How does that compare to suburban API school API scores?

  172. Posted by [anon.ed]

    “and the “teachers” should be sent to Corcoran (where their former “students” already reside)
    Whatever. Like you know what you’re talking about.

  173. Posted by UsuallyNamed

    is the sf chronicle ehgaged in a “distortion of the facts”?
    Serious questions only, please.
    From the article you keep posting as if it were some kind of Gospel:
    “Shelley Smith, a mother of three and a homeowner in Glen Park, was assigned her neighborhood school, Glen Park Elementary, for her daughter, Josephine, two years ago. She was apprehensive because of the school’s lackluster reputation, but now loves it.
    She and her husband, a lawyer, had considered moving to Orinda while expecting their third child, but dreaded his long commute back to the city and expanded their house instead. Smith said they’d never be able to afford private school for three kids, and she thinks too many families dismiss the school district outright.”
    Most people move because they want a bigger place than they can afford in San Francisco.
    @A.T.
    Palo Alto median home price $1,595K.
    This is not an option for most people and anyone who can afford to buy a home in Palo Alto can afford to send their kids to private school. Or just do what we did and stick it out and get a decent public school here. None of my daughters friends moved to the suburbs during the school selection process, though a few threatened to. Most ended up in an immersion school or Rooftop or Fong Yu or Alvarado or Sheridan. In many cases, they did not get what they wanted until the second round.
    One started at an immersion school, did not find her daughter sufficiently challenged and put her into a Russian immersion private school instead. This kindergartner speaks three languages fluently and can read well in two, so she is not your usual kid.
    One went straight to private, no questions asked.
    This is your typical “lower middle-class” crowd: doctors, lawyers, techies. People that can afford private school if they wanted to.
    No doubt the public schools in the most expensive public school districts are better than the average public school in San Francisco. And maybe a bit better than the best public schools here, but not by much. The main risk in sending a bright kid to an SF public school is that they are not going to get challenged enough.
    But most suburban public schools are no better than San Francisco public schools, it is a fallacy to claim otherwise.

  174. Posted by sparky-b

    A.T.,
    House are more in Palo Alto and Piedmont than in SF, aren’t they?
    meep,
    you keeping going back to 1 article that, yes states that there are less school age kids in SF than there were. But it also says that kindergarten apps are up for the last 4 years. So, it seems like maybe the school were bad now they are getting better so more people are staying.
    Oh and the woman who left went to Marin, he friends went to Michigan and Texas. Was it the better schools for them or moving back near family? The last couple pages are about people staying here or about Manhattanizaion. Not such a great article to reference 3 times.

  175. Posted by A.T.

    Sure, you get into Rooftop, that’s great. But you know that is not typical. If you win the lottery and get into one of the very small number of decent SF schools, of course you could stick with that. However, if one is among the unlucky 95%, I’m just saying that if I could not afford private schools I’d move in a heartbeat to get my kids the education they deserve – they only get one shot.
    I went to a sh**ty catholic school here, and sure I turned out fine (others may differ). But I’d like my kids to have a much higher-level educational experience. I’d move where they can get that if finances demanded it (you can rent very nice places in Palo Alto by the way, and there is no homeownership requirement to enroll in public school).

  176. Posted by sparky-b

    Well this site is actually about buying real estate, and so was this thread a while back.
    You go rent in Palo Alto.

  177. Posted by UsuallyNamed

    If you are going to move to a place and rent, you can always move to a CTIP-1 area, get the school you want, then move to another neighborhood. I have a friend who is doing that. Perfectly legal, as long as you stay in the neighborhood long enough (I am not sure how long that is, I think 3 months after school starts).
    You are pretty much guaranteed to “win the lottery” if you are in a CTIP-1 district. In fact, I expect more and more people to try and game the system this way. You might want to consider it.

  178. Posted by wrath

    “Whatever. Like you know what you’re talking about.”
    A SF public school system alum bedazzles fellow bloggers with his argumentative powers and verbal adroitness.
    Those are those hard core API scores baby!

  179. Posted by meep

    sparky-b the headline and subtitle of the article are below
    “S.F. losing kids as parents seek schools, homes”
    “Family flight a growing problem despite city’s efforts”
    you are trying to say that it is not a good article to argue…well…that san francisco is losing school age kids as parents seek better schools and cheaper homes?
    really?

  180. Posted by Sparky-b

    So you only want to talk about the headlines and not the actual article. I paraphrased the article, applications have gone up for 4 years. 2 women are quoted 1 moved to San Raphael, 1stayed here.

  181. Posted by meep

    so your theory is the editor and reporter
    gave the article the headline:
    “S.F. losing kids as parents seek schools, homes”
    “Family flight a growing problem despite city’s efforts”
    when in fact the article is about how sf is gaining children and families are not leaving to find better schools and cheaper housing?
    that is completely illogical and irrational.

  182. Posted by UsuallyNamed

    There were 3869 who applied for kindergarten in 1996 and 4931 in 2011. This is an increase of 27% in five years. The facts simply do not support your thesis.
    Remember who the term Yellow Journalism was invented for.

  183. Posted by middleclassjoe

    Putting aside the uninformed diatribes on SF schools….I agree with SFHawkguy and others that promoting home ownership can be good policy, and letting the banksters turn it into roulette not so much. But let’s be clear why people turned their houses into ATM machines and bit on all the exotic loans: REAL WAGES HAVE BEEN FLAT FOR 30 YEARS! http://bit.ly/oJcF0e Cheap money has been the way the powerful have papered over the fact that people are working harder but not getting ahead.

Add a Comment

Your email address will not be published. Required fields are marked *

Recent Articles