it will take 29 years for college grads to save 20% down on SF home, study shows

[Liberal_in_LA]

According to a new Trulia study, it will take the average Bay Area college grad approximately 29 years to save 20% down for a typically priced home. For those prospective buyers with no degree, forget it. By this study’s calculations, that 20% down savings is impossible for millennials who didn’t earn a college degree. The gallery above gives a picture of what the San Francisco market looks like now. In the future, it’s going to be even worse, from the buyer’s perspective.

Method

Trulia says, “Our study calculates how many years it will take a millennial (young adult aged 25-30) to save a 20% down payment in the 100 largest U.S. metros assuming that home prices and incomes will increase over time – with and without a college degree.” Of course, the whole study projects into the future. By the time these grads begin looking for homes, prices will be higher still than they are today. To estimate how much the required down payment will grow over time, Trulia uses the 20-year Federal Housing Finance Agency (FHFA) home price growth rate for each of the 100 largest U.S. metros based on current median prices.

This information is then correlated with potential household income grow

http://blog.sfgate.com/ontheblock/2015/07/09/college-grads-must-wait-29-years-to-earn-20-sf-metro-homes-for-those-without-education-its-never/

[pa28]

1. Then they'll have a 30 year mortgage to look forward to.

That would make them 84-89 years old by the time they've saved the down payment and paid off their median house.

No bubble there. Nope.

[misterhighwasted]

2. CNBC says: China has over $28 billion in US housing/property invesments.

China owns a lot of the USA properties.
Wonder if they pay US Taxes on the income generated?

[eissa]

5. I'm guessing most of that is in the Bay Area

I have family that lives in Silicon Valley. Both professionals (engineer and HR exec.) Both in their 50s and only recently bought a home there after YEARS of trying. Every time they found a property that fit their needs within their budget, someone from China would sweep in, offer $100,000 over the asking price and pay in cash. Hard for any seller to turn that down.

I will say this, though: taxes, real estate, cost of living....they all might be higher in the Bay Area, but man, what a great place to live. We just drove into SF for a play day last week. Even though I've lived within a couple of hours outside of it since forever, there is always so much to do and see.

[misterhighwasted]

8. Honestly That has been happening here in Dallas too.

I believe it is a Wall Street Investment Group but no one knows just who is in that tight knit secret group.
They pay cash before the home ofgicially goes on the market & out bid anyone else.

They buy up every home in any developed community & everywhere else.
They pay cash & close the deal before the sun sets that day.
I am told they are foreign investors & global Wall Street insiders, privy to property info the average US homebuyer doesn't have.
Yup, twenty eight billion dollars.

I think TPP has been operating for some time. We just weren't part of that Club.

[B2G]

10. What do they do with the properites?

I mean seriously, they can't resell them at a profit at that point...

[shanti]

34. rent them out

there is a serious rental housing shortage here too (sacramento). it used to be more affordable here, but those days are gone.

[jamzrockz]

14. I have to say

This is a very good problem for a state govt to have. All that cash infusion into the city, it might hurt a few people but the jobs, the revenue increase from property tax would make up for it.

Question now is, how can we get this people to come to Omaha?

[misterhighwasted]

55. Funny you should mention Omaha. Nebraska Furniture Mart just opened.

There's an area north of Dallas. Denton to Plano/Frisco/Mckinney that is developing faster than we can keep up with.
Honestly I drive thru that 40 mile stretch every few months & there will be an entire housing development up and running where open field existed on my last trip.
Its kinda weird really.
I don't know why this area is growing as it is.

Maybe helps because this is the area where Toyota headquarters is relocating to, from CA.
They have doubled their original size of building & parking area. I didn't think much of that until I heard they were building a second production plant in Mexico.

That proximity, and Texas's very "friendly" business laws has much to do with all this. I am sure the housing investment groups exist in the same circle as Toyota & Nebraska Furniture Mart & all the hundreds of other new businesses growing that area & they all converged on the same area of Dallas to grab a piece of the profit pie.

I wish Omaha well. I have family there & your world famous Zoo is the best I've ever visited.

[SoCalDem]

18. Caliber Homes is listed on some on Zillow

and you have to pre-qualify with THEIR loan program, to even see the house..

https://www.caliberhomeloans.com/about-us

[Starry Messenger]

3. I doubt this bubble is going to last 30 years though.

[Auggie]

6. Heck, the Big One will make things moot in about 30 seconds ...

that'll be the day you'll regret ever moving to San Francisco.

[Starry Messenger]

7. I'm in San Mateo County, but yeah.

Of course, the center of the state is collapsing from the drought, so maybe the coast will just go when we crack off at the central valley. Our troubles will be over!

[CountAllVotes]

27. +1,000

No kidding. Huge earthquakes are part of the history of S.F. You cannot run nor hide from them and the thought of living in one of those new sky scraper apts. they're putting up downtown scares the living daylights out of me.

... A Loma Prieta Survivor from Oct. 17, 1989 and no I'll never forget.

[Auggie]

30. People have no idea how strong an 8.0 can be ...

because they've never experienced one -- especially if they're relatively close to the epicenter. I live 5 miles from the Napa August 2015 quake that registered 6.0. Blew me away how powerful it was.

[CrawlingChaos]

31. Me too Countallvotes

I was really traumatized by Loma Prieta. I was in a soft story apartment building that shook so violently I was sure it would collapse. The stairs cleaved right in two and I had to jump across the chasm to get out. Just a few blocks away from me people were killed in buildings that did collapse (downtown Los Gatos). You never forget that kind of thing.

[CountAllVotes]

33. Was living on solid bedrock in the Richmond Dist. of S.F. at that time

and I got to watch the Marina Dist. burn all night long as I had a lovely view of the Golden Gate Bridge from where I was living at that time -- an overpriced dump of an apt. and a slumlord to go w/it.

[B2G]

35. I was in Cupertino for it

Moved back to the Midwest the following year.

[CountAllVotes]

45. I left not long after that too

It was too worrisome for me and yes, I packed it in and left. My family has been in S.F. since 1860 or so and yes, it was a very big deal at that time as my parents were still around and they wanted me to stick around but ... I left anyway and have zero regrets believe me.

[exboyfil]

52. Of course you have the New Madrid Fault

to worry about.

[B2G]

53. Nope, now I'm in NC.

[CrawlingChaos]

29. Actually...

The best place to be in an earthquake is on one of San Francisco's hills - they are solid rock, if I'm not mistaken. I think the structures on the hills did very well during the 1906 quake. I always dreamed of living on a hill in SF.

The terrifying prospect would be living in places like the Marina (where the soil liquefied during Loma Prieta) or Foster City down the peninsula, which is built on landfill - or how about all the people who live right on top of the ominously overdue Hayward Fault in the East Bay. I don't understand why they would let anyone build houses (and hospitals and schools) right on top of a fault - seems insane.

I lived most of my life right in the center of all these faultlines and it was a constant source of anxiety.

[Auggie]

50. Shaking is just the beginning. Fire will be major, just as in 1906. Hills will not be immune.

I doubt we'll see as much destruction as 1906 and authorities certainly will not dynamite, but I expect some sections to go up in flames. Density is so much greater now. Rescue efforts will go on for days. Expect a shortage of water, food, hospital beds, medicine, etc. Thousands will become homeless. What freeways that are open will be jammed with people trying to get out and supplies trying to get in. It will be a tough several weeks.

[CrawlingChaos]

58. Well, it depends (I've given this way too much thought)

Definitely, expect to be cut off from services for days and days. They are, I will say, pretty obsessed with fire containment in SF. In a moderately large event similar to Loma Prieta, I think they can contain fires pretty well (although I wouldn't want to find out the hard way). SF is a very well prepared city (modeled after Japan) and I think that makes a big difference. In a very large quake like 1906, however, I imagine all bets are off.

Now I tend to think in terms of likely scenarios. Supposedly the 1906 quake was a 200-year event (meaning according to models it would take 200 years or more for enough energy to build up for it to happen again) so it's unlikely that size of earthquake will hit the Bay Area in our lifetime. Definitely possible, but unlikely.

There are, of course, several other earthquake scenarios in the Bay Area that are worrisome enough to keep you up at night. By far the most frightening is the Hayward Fault, because it's overdue, so many structures are built right on top of it (unlike the San Andreas) and the northern section is thought to be capable of a 7.5. That would devastate the whole Bay Area, and I don't even like to think about what it would do to the East Bay. I don't think many of the smaller cities are as well-prepared.

So that is why I say if I had to be anywhere in the Bay Area during an earthquake, it would be on a hill in the city of SF, because of the bedrock foundation and the high level of preparedness by the city. Of course I hope I never have to go through another major quake because it is a truly horrible experience, no matter how prepared you think you are.

[Gormy Cuss]

28. What's scary is that their calculation for the Oakland MSA isn't much better

It's 27+ years.

[Starry Messenger]

32. It's gotten crazy over there too.

[madville]

4. Don't live in the Bay Area?

I live in North Florida, I have a 1300 sq ft house on one acre that cost $90,000 and the property taxes are $600 a year. It's cheap living, my 15 year mortgage I refinanced is $540 a month with taxes and insurance included.

I only make $60k a year, I couldn't imagine trying to survive on just that in some of those expensive cities.

[pnwmom]

40. There are a lot of good jobs in the Bay area.

Unfortunately, even good jobs for recent graduates barely pay enough for living costs.'

This is true in NYC and other major areas as well.

[madville]

41. I'd rather make 60k in a cheap rural area

Than 120k in an expensive urban area, housing, taxes, insurance and utilities all seem to usually be way cheaper.

[pnwmom]

43. The other issue is family. People who have grown up in an area like that and have family there

have to choose between money and family. Is it worth it to move to a place with a cheaper cost of living if they lose connections with family, too?

Believe it or not, most Americans live within 100 miles of their family.

[LeftyMom]

48. I've been to Florida. I'd rather live in Stockton.

[snooper2]

9. This is pretty stupid...who spends a cool million on their first home

And if you would, WHY IN THE FUCK would you buy in San Fran LOL

The 20% down is the closing price on our 3400 square foot home we got last year

[REP]

36. Well, we didn't but we bought below market at a good time

We're in Silicon Valley. We put 1/3 down and have a 20 year mortgage. Our house appraises at over twice what we paid for it.

We came here in '98 with what seemed like an enormous debt load. Now we have no debt except the mortgage. It doesn't need to take 29 years - just some planning, being willing to wait and a lot of living in crap apartments until The House appears

[Igel]

11. I assume it's a comment on the SF housing market.

Not housing in general.

20% down? That's hefty. But I guess if you don't qualify for some types of loans that's what you're stuck with. There are two ways to not qualify: The first is you're credit rating sucks. The other is that the loan's too big.

Got 3%, you qualify for FHA loans. Unless your house costs much more than $400k. Ah. SF in a nutshell: Housing prices are too high.

Response: Don't live in SF, but buy elsewhere.

Problem: The SF area is crowded, congested, and expensive both because it's desirable, because there are a lot of high-paid people, and because land's scarce or land-use policies restrict building to protect quality of life for those already there. No good solution to that, however.

Response: Don't live in SF, buy elsewhere.

[KamaAina]

12. What's the corresponding figure for L.A.?

[KamaAina]

13. Xposted to California group

http://www.democraticunderground.com/?com=forum&id=1040

[edhopper]

15. Forget buying

they can't afford to rent.

[RKP5637]

19. Quite true, and that's happening too in many metro areas. One brings on the other. n/t

[edhopper]

23. yes

a housing crisis the PTB continue to ignore.

[img][/img]

[RKP5637]

26. Thanks for posting this! This chart was the one on my mind! n/t

[n2doc]

16. The ones buying are more likely to have cashed in on selling their company

Or making an app that sells a few million copies. That is the new reality in the Bay Area. Everyone else rents and commutes.

[Tatiana La Belle]

17. California real estate is just insane

You can't get into a decent condo for under $300K. That's a 2 BD condo. I don't know if you ever watch Househunters on HGTV, but $300K can buy you a huge house in places like central Texas. Even in the DC suburbs, which are very expensive, you can get a small townhouse for 300K.

[realFedUp]

20. Too expensive for anyone outside tech to live there

I don't have a word about the imbalance of living in the Bay Area and peninsula etc. you almost have to move to Gilroy and commute. Where is low cost housing? Certainly there is plenty of imagination to creat modular low cost housing. For a smart community, it isn't connected well.

[senseandsensibility]

22. Gilroy is only 30 miles from San Jose

and not cheap at all. In fact, I recently saw that the average listing price there is well over a million dollars.

[CrawlingChaos]

24. Gilroy's expensive now too

I know... Gilroy. It's nuts. That's gonna be a long-ass commute too and you still have to mortgage your soul to do it.

And what I also like to point out, there are parts of the Bay Area that are truly awful. Like Milpitas - it's a butt-ugly, depressing, concrete strip-mall hell, and it's still insanely expensive to live there.

[Liberal_in_LA]

46. Gilroy?! haven't been there in decades. garlic capital..right?

[CrawlingChaos]

47. Yep, that's the place

Hellishly hot, boring, inconveniently located and now completely unaffordable.

No one likes garlic that much.

[B2G]

54. Used to go to the Garlic Festival there

Can't imagine any other reason to go there. That was 25 years ago, and it was in the middle of freaking nowhere.

[Nuclear Unicorn]

25. If one industry drives up the prices the other vocations in the area will either

move away or raise pay because the currency inflation allows them to charge higher prices. If the former, the economy will not support the inflating industry, i.e. no food, janitorial services, maintenance, etc.

[seveneyes]

21. Money follows the people

Those following the money get followed. Two equals one plus one. Move to the country and blow up your TV.

Or not.

[Munificence]

37. That's what

I did just south of Nashville, 13 acres a beautiful Western Red Cedar 3000 sq home and a guest house that is Western Red cedar. Have a stream coming out of a cavern that is breath taking.

Oh I have plenty of Peaches if you'd like some....however I'm more of a "Back to the Country" type of person... (You threw in the Prine so I had to throw in some Ozark Mt Daredevils).

[seveneyes]

38. Hell yeah and thank you!

Reminds me of my cousin Johnny ...

[Munificence]

39. Ah man

that's pretty sweet. Nice Americana sound with some banjer mixed. I've been flat picking "Hippie grass" and Old Byrds, Dead, Townes, etc for around 30 years now...still play at least 40-50 hours a week. Love to find new stuff so thanks for the tube vid.

Oh, here is my place:

Back of Guest house:

[IMG][/IMG]

Main house:

[IMG][/IMG]

last leg of my 1/4 mile drive coming to house:

[IMG][/IMG]

my family beside that beautiful cavern stream:

[IMG][/IMG]

Edit to add:

Since this thread is about home prices, I picked all this up for $310K

[seveneyes]

42. I hope to meet you and your kind off trail

And I see my Irish roots in your pictures. The Crimson missed my genes but captured my heart.

Peace and Americana upon you ...

[Prism]

44. 1 bedroom house, $435k

In East Bay down the street from me. I actually looked at it, because I have good credit and thought, "mayyyybe . . . "

Newp. Smaller than my apartment.

These people are crazy.

[Rex]

51. You can get a small mansion for that price here in Texas.

$435k for a one bedroom house is insane!

[NashuaDW]

56. So? Why is this a big deal?

No one has an absolute right to live where they want to.

The law of supply and demand is in full force here and that is a good thing.

I want to live in a much , but can't afford it. So I live somewhere I can afford.
Simple solution to the problem.

[laundry_queen]

63. Simple solutions for simple minds

Sometimes people can't move. Sometimes they have family they can't leave. Sometimes their jobs are very location specific. In my case, there are several issues - a separation agreement with my ex that says I cannot move more than 30 miles away from where I am now. Plus, my parents are nearby, they were SUPPOSED to help me through school, but didn't. I had moved here with my ex's blessing at the time (Before separation agreement) because they promised to help me out. Now I can't leave. Where I am is not as expensive as many places, but put it this way - I have a degree and a 'good' full time job and cannot afford anything but the most basic necessities, and had to get my parents to co sign my mortgage - they have said they won't cosign another mortgage because they will be retired. So I cannot sell and buy something else. Plus, I stopped renting because...well...it's far more expensive than owning right now. I'd have to pay more to rent if I sold my house and couldn't buy again.

Anyway, not everyone can move. That is a short sighted POV.

[Lonusca]

57. Here is how bad it is getting

This development is under construction. It is right next to 680, houses within probably 150 yards of freeway, on one side. It is adjacent to a supermarket mall on the other side. Another townhouse development on one side, and what looks to be another one of these developments (to be built in the near future) on the other side.

They appear to be closer together in real life than in the pictures.

Approx. 2,830 – 3,662 sqft.
3 – 4 bed / 2.5 – 3.5 bath
2 car garage
Exceptional living... extraordinarily lived. Prices from the low $1,000,000s

http://www.denovahomes.com/neighborhoods/township-square/

[CrawlingChaos]

59. For Pleasanton?!!

That's way out in the hinterlands, by Livermore! Good heavens.

It's madness.

[Lonusca]

60. We used to be

Downtown Livermore is now hopping. Packed. On a Tuesday.

[CrawlingChaos]

61. Apologies if I'm behind the times

I come and go through the Altamont Pass a lot, so I see a lot of big stores built up along the freeway as I go through Livermore. I remember Pleasanton as a nice (dare I say pleasant) small town with a fairgrounds, but I'm sure things have changed.

It would be a brutal commute though, wouldn't it, if you worked in San Jose? Other than that, and the home prices, it must be a pretty nice place to live.

[Lonusca]

62. You're not behind

The whole Tri Valley area is expanding very rapidly. It seems to be happening at an accelerated rate over the last couple years.

I remember visiting the area about 10 years ago. Night and day difference.

The infrastructure needs to catch up. There is a lot of traffic coming from the east.