# Honest question about relocating to Nor Cal



## filly (Feb 6, 2003)

I'm looking at making a career change very soon, including moving from my current location. I'm eyeing the west coast (WA, OR, CA), as I've lived there for a few years before. Now, I think I'd prefer the Nor Cal region due to climate, but I want to hear stories about how you guys have managed to live there. My question goes out to those who have moved there within the past year or so. How did you manage to buy a house? Or do you rent? Is a six figure income a prerequisite for even considering it? Can you make it work with an income of, say, $80K, or is this a pipe dream? By the way, I'm married and have a kid. So, no bachelor jackass stories of living in a cardboard box on the beach and eating $1.99 burritos for breakfast, lunch, and dinner. 

TIA.


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## Jed Peters (Feb 4, 2004)

Depends on where you are.

But if you only make 80k, you aren't getting a house in the bay area or many parts of sacramento that are worth living in, remember you've got a kid and a wife to support as well.

If you were single and made that, you'd be able to get a condo in the bay area.

Edit: Oh yeah, depends on what you have for a down payment, too.

Also, remember....Norcal is bigger than most all other states. Like anything, location, location, location. Prices run the gamut from the most expensive in the country to pretty inexpensive.


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## johnny99 (Apr 2, 2004)

Northern California is a very large area. On the San Francisco peninsula or in Marin, you should expect to pay at least $600K for a starter house in an OK neighborhood (double that in the nicer areas). That's several thousand a month in mortage payments. A small condo might be $400K. Renting a 2 bedroom apartment will be at least $1000 per month.

Prices go down a lot as you move out of commuting distance of San Francisco/San Jose. The far northern part of California (nearer to Oregon than to San Francisco) is relatively inexpensive.


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## Bill70J (Sep 23, 2004)

*Doable, But Tight*

We moved from Houston and bought a home in Solano County (Northern California) about two years ago. I can furnish some pretty good expense numbers based on our situation (it's just my wife and I), which may help you in running some numbers that fit your lifestyle. Solano county has the lowest average home prices (for "close-in" areas) so it would paint a most optimistic picture from a real estate perspective. (I would definitely recommend purchasing rather than renting if at all possible.) Here goes, FWIW

1) Vehicle expense, Includes insurance and gas, but excludes any loan expense (2 cars, 10k miles/yr): $5,000/Yr
2) Groceries. Nothing extravagant, and lots bought at Costco in bulk: $7,500/Yr
3) Utilities. Includes gas, electric, water, garbage, and phones: 4,000/Yr
4) Cost of home ownership. Assumes a $500K home (not unreasonable, but not real nice either) with $200K equity, a $300K interest-only loan, and real estate tax at 1.4%:
$20,600/Yr ([email protected], [email protected], and [email protected])

Total for all of this is $37,100/Yr, exclusive of state and federal income tax, FICA, 401K deductions, and medical insurance. If you figure the burden for all that stuff at 40%, then you would need $61,800/yr just to survive the basics. 

As home prices go in this area, a nicer home in a "subdivision" setting will cost $650 - 750K. For $500K you would get a fairly large fixer-upper, or a smallish 2BR/1 bath older, but nicer home.

Hope this helps, and hope you decide to make the move. IMO, you could not ask for a better cycling area than Northern California.


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## bc165 (Aug 5, 2003)

*If you move to the Santa Rosa area...*

55 miles north of San Francisco, you can get some of the best road riding in Norcal here in Sonoma County, including excellent rides into nearby Marin, Napa, Mendo and Lake counties... and the housing here is less than the many places in the Bay Area, but if you want a 1200 square foot 3/2.5 townhouse with a one car garage in our complex, it will set you back $380k... doable on an $80k income if you sufficient downpayment... the rest of living expenses here are not outrageous, but it isn't cheap either... lots of people live here on less than $80k. I don't know what you do for work, but finding employment here is not always easy. Lot's of people like the lifestyle - semirural with decent urban ammenities - but there isn't much industry, so it means long commutes for a lot of folks.


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## johnny99 (Apr 2, 2004)

bc165 said:


> 55 miles north of San Francisco, you can get some of the best road riding in Norcal here in Sonoma County, including excellent rides into nearby Marin, Napa, Mendo and Lake counties.


Sonoma seems like the drunk driving capitol of California. Their record on crimes against children isn't so hot, either. If you can avoid all that, the weather and scenery are very nice in Sonoma.


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## Number9 (Nov 28, 2004)

filly said:


> Is a six figure income a prerequisite for even considering it? Can you make it work with an income of, say, $80K, or is this a pipe dream? By the way, I'm married and have a kid.TIA.


Regarding Silicon Valley, from the 2000 census data, median income for a family was $81,717 in Santa Clara County. Per recent ~05/17/05 SJ Mercury news article, Santa Clara County houses (median) also hit a new peak, at $681,500. So even after normalizing 2000 data to 2005 dollars (inflation, income [in|de]crease(s), etc.), the median family income isn't sufficient to buy the median home in Silicon Valley. Sucks, but one probably does need a six figure income (and well into six figures at that) just to buy a merely OK house.


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## johnny99 (Apr 2, 2004)

Number9 said:


> Regarding Silicon Valley, from the 2000 census data, median income for a family was $81,717 in Santa Clara County. Per recent ~05/17/05 SJ Mercury news article, Santa Clara County houses (median) also hit a new peak, at $681,500. So even after normalizing 2000 data to 2005 dollars (inflation, income [in|de]crease(s), etc.), the median family income isn't sufficient to buy the median home in Silicon Valley. Sucks, but one probably does need a six figure income (and well into six figures at that) just to buy a merely OK house.


I've seen numbers like that quoted before, but I wonder how they can possibly be true. Someone is buying and living in those houses. Houses are selling quickly and few are going empty. Are speculators buying them and renting them out to lower income families? Or do people have large enough savings accounts to limit their mortgage payments to a reasonable amount? Or are there just way to few houses in the county?


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## Francis Cebedo (Aug 1, 2001)

As most have said, the, the bay area is a pretty wide place. Let's say the center is Los Altos/Palo Alto, the farther you live from there, the more affordable a place becomes.

As far as 80k is concerned. I believe you can live on it, maybe 50-100 miles fromt he center. But then you'd have to rent for a long time. Buying a place is out of the question unless you already have a big paperbag of cash with you.

That being said, a lot of people rent in the bay area. And there is a rift developing between the the have rents and the have mortgages.

francois


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## bob338 (Apr 11, 2005)

*vallejo resident*

i live in solano county in vallejo, about 35 miles north of san francisco and just below napa. i bought a house here four years ago for less than $200k and make less than $40k. the deals are still there to be had, you've just got to have a really good agent and be ready to make quick decisions. i was the first person to see my house, made an offer that evening and got accepted the next morning. the contract to buy it was signed less than 24 hours after making the offer. 
i would highly NOT recommend vallejo for anyone with children. the schools are ****, half of the city is a bad neighborhood and we have(had?) the highest number of on-parole ex-cons of any bay area city. 
benicia is nice, and has decent schools, but the market there is going up quick. parts of oakland and alameda are okay, but i think overpriced.
i should add that i worked 16 hour days, 5 days a week for two years to afford buying my house by myself. it didn't seem worth it at the time, but it has paid off nicely, my house was appraissed last year for almost triple what i paid! 
i guess my point is that you can make it here without being wealthy, but there is a lot of sacrifice along the way...

oh yeah, the riding here is incredible.


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## filly (Feb 6, 2003)

yeah, well, you all are just confirming what i knew to be true, but didn't want to hear. WA, here i come, baby. sucks, but not everyone can live in CA, right? that's how it goes. if you can't cut the mustard, pack sand and live somewhere else. thanks for all of the insight...it's helpful to actually here the scoop from real residents as opposed to what you read in the newspaper over 1,000 miles away.


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## moschika (Feb 1, 2004)

johnny99 said:


> Sonoma seems like the drunk driving capitol of California. Their record on crimes against children isn't so hot, either. If you can avoid all that, the weather and scenery are very nice in Sonoma.


LOL!

a good ol' battlezone of bikes and drunkards. but like you said, "if can avoid..."

seriously, the further from SF, it gets generally less expensive. depending on what you do you can find some good homes around 400K in my hood(sw santa rosa). doesn't have the best reputation but it's all relative. the worst place here is still better then most places in any big city (i've lived in SF). or out further into the country is even cheaper(i.e. Russian River area)

and the riding is very good. if it's good for Levi, it's good enough for most.


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## Number9 (Nov 28, 2004)

johhny99 said:


> I've seen numbers like that quoted before, but I wonder how they can possibly be true.


They are true. The so-called affordability index in Santa Clara County is pretty awful and even worse in SF. For roughly 4/5 of the households in Silicon Valley, the choice is either to rent or to buy a less-than-median-priced home (which tends not to be particularly attractive).





bob338 said:


> i live in solano county in vallejo, about 35 miles north of san francisco and just below napa. i bought a house here four years ago for less than $200k and make less than $40k. [...] it didn't seem worth it at the time, but it has paid off nicely, my house was appraissed last year for almost triple what i paid!
> i guess my point is that you can make it here without being wealthy, but there is a lot of sacrifice along the way...
> 
> oh yeah, the riding here is incredible.


Bob338, while your advice is generally sound, your discussion actually illustrates why your advice probably won't work in the SF Bay Area today - namely, someone in the market today with a modest income couldn't possibly buy a house like yours for $200k. Indeed, had you not purchased your home in the past, you probably couldn't afford your current house TODAY, unless you had a dramatic increase in income in the intervening years. 

Currently the delta between rental payments and mortgage payments is quite large, which is one of the indicia of a housing bubble. Nonetheless, the restricted supply and high demand are often cited as reasons that the high home pricing will continue. Your guess is as good as mine, but I bet my money on the latter, rather than the former.


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## Woofer (Nov 18, 2004)

bob338 said:


> i live in solano county in vallejo, about 35 miles north of san francisco and just below napa.oh yeah, the riding here is incredible.


Even in Vallejo? Just wondering.


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## Francis Cebedo (Aug 1, 2001)

Number9 said:


> Indeed, had you not purchased your home in the past, you probably couldn't afford your current house TODAY, unless you had a dramatic increase in income in the intervening years.


Most homeowners in the bay area cannot afford the house they live in now (if they did not own it today).

I'd like to know the actual stat for this. I'm guessing it's more than 50%. Because of the out of control rise in home prices, house prices have just left incomes in the dust.

Perfect example is Bob. Paying $600k for that house today is probably out of reach. I'm in the same boat. The only real way to be a homeowner here is to be a homeowner already (condo or townhouse) and ride the wave and trade up.

Crazy place. I'd be loaded if I can ever bear to move out of town.

francois


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## fast14riot (Jul 22, 2005)

*You should consider Stockton/Lodi*

Seems like everybody keeps giving the greater Bay Area as an example, but when you get over the hill (Altamont Pass) into Tracy (<75K pop.), small cow town inhabited by commuters, and a little farther into Stockton (265k pop.) the prices do go down significantly from Bay Area prices. 

My dad is a UPS driver who makes 85k a year and has a 1300+ house payment, 2 car payments (value less than 20K each-3years old) and a boat payment, my mom doesn't work and I still live at home (although I don't actually cost him anything as I make 55k). I was born in Stockton and have lived in San Francisco (Bernal Heights) and Oakland (Lake Meritt)and much prefer Stockton over the bay. You can get houses in Stockton for ~250K(3/2) in a so-so neighborhood with OK schools. Stockon also is about 30min to 1hour from any type of riding you could think of, but here in town it is very flat. Google Stockton Bike Club to check out some of the riding in the area. Stockton has been growing pretty steady for a long time so there are houses from all era's, early 20th century victorians to brand new and prices that will go from 100k for something that would be suitable for farm labor to over 5000k estates on large acrage.(no, thats not mis-typed). 80k income and I assume you work in high seniority service industry to middle managment in a medium size business, and this is what most of Stockton consists of, so I think it is doable for your situation, just takes some looking around.


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## Rushfan (Apr 20, 2003)

This has been a pretty interesting thread for me as I'm a real estate appraiser covering Contra Costa, Napa, Solano, Yolo, and Sacramento counties. Homes have gone up 20% per year in the past couple of years, so if you got in at the right time, you've made a bundle. And yes, there are signs that the market is nearing the top, but the experts have been saying that for the past 3 years, and the market still keeps going up.

That said, I would suggest taking a look at the central valley. Sacramento might have some affordable areas, such as the town I live in, Woodland. I'm 3 blocks from country roads, there's a big club in Davis, and decent hills are 20 miles away. It's excellent for riding.

To get a decent 3/2 house, you'll need to pay somewhere around 400k in this town. There's areas of Sac where you can do a little better. Go up the road, away from the Bay Area, and housing becomes affordable, but there are few jobs. From what I've seen of Puget Sound, my best friend lives up there, Seattle is probably not much different than NorCal. SoCal is probably just as bad or more expensive. Oregon, once you move away from Ashland and Portland, might work for you, but once again, you need gainful employment.

Good luck, and send me a PM if I can help.


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## shawndoggy (Feb 3, 2004)

francois said:


> I'd be loaded if I can ever bear to move out of town.


Over the hill in Reno, which those in the Bay Area surely equate to a rural and less cultured Fresno or Bakersfield, the crush of retirement age Californians cashing out the homestead and buying somewhere cheaper has driven our home prices through the roof too. You can still get a phat house here for $800K in a really nice neighborhood, but six years ago that house cost $375K.

I can't imagine how anyone can break into the market to buy a house and raise kids in the Bay Area. You've got to pull in a crapload of dollars just to afford a mortgage... what about child care, college savings, retirement savings, etc? Does everyone just bet their whole net worth on real estate inflation? And then working that hard (and likely having at least a 30 minute commute) when do you get to actually raise the kids/make a school play/pick up a sick kid from school?


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## Francis Cebedo (Aug 1, 2001)

fast14riot said:


> ...and I still live at home (although I don't actually cost him anything as I make 55k).


You mentioned something that's very, very important. Live at your parents home for as long as you can. I give that advice to my nephews that are getting out of school.

Get a good job after college(hopefully) then live at home and don't get a credit card. This is one of the keys to home ownership in the bay area.

You gotta save like squirrel as soon as you get a real job, before you figure out how to spend money.

When I graduated from school, I earned $24k/year and I lived at my folks home for 3 years and used my college car. I saved $10k each year. That was key in getting me a house. No matter how much more I earned since then, I've never been able to save that much money. From there, buy a crappy little condo and ride the wave.


fc


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## bob338 (Apr 11, 2005)

Woofer said:


> Even in Vallejo? Just wondering.


actually, vallejo is about the only place there isn't much good riding! marin, sf, napa, sonoma, lake county, even the east bay are easily drivable. but there just isn't much to look at in vallejo proper. i've ridden to benicia a few times which isn't bad...


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## bob338 (Apr 11, 2005)

actually, i looked at a 1 bedroom condo in san francisco for $250k this morning. it's in a not-so-nice neighborhood, but one that isn't THAT bad. and it goes back to what i said about sacrifice...are you willing to live in a 1br with a wife and a child? probably not, but it shows that you could. 

there are still houses in vallejo for reasonable prices. and there are ways to buy houses without much money. you could get an good agent, find a cheap house in v-town and finance it with an interest only loan. in a couple of years when the rate adjusts, sell it and have your down payment for a nicer place. it'll be almost impossible for vallejo values to drop drastically, so you're almost certain to make money. 

simplistic i know, but i came from nothing and now own something. it can be done.


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## Number9 (Nov 28, 2004)

francois said:


> The only real way to be a homeowner here is to be a homeowner already (condo or townhouse) and ride the wave and trade up.


 Tough advice to follow for someone who is only just considering moving to the area!  In that scenario, it would only make sense to move out here if one had a reasonable chance of capturing the upside from the job market here (e.g., tech, bio, pharma, venture capital, investment banking, startup, etc.), though even this is becoming much harder now because the accounting rules regarding expensing stock options have made most companies much more stingy with option grants, except with respect to the most senior positions.

Not that it's all doom and gloom though. Like Bob, I started with nothing (immigrant - grew up in Stockton, yuck!), got multiple graduate degrees, worked hard, saved, and finally bought my first overpriced Silicon Valley house last year (2-acres on Mt. Hamilton in a gated community overlooking the city and the bay). If you acquire the right credentials and work experience, there are a lot of extremely highly compensated positions in the Valley.

So there's more than one way to skin a cat out here, but most of them aren't easy...


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## Rushfan (Apr 20, 2003)

bob338 said:


> actually, i looked at a 1 bedroom condo in san francisco for $250k this morning. it's in a not-so-nice neighborhood, but one that isn't THAT bad. and it goes back to what i said about sacrifice...are you willing to live in a 1br with a wife and a child? probably not, but it shows that you could.


This is a pretty scary purchase to consider right now. When real estate markets go south, the hardest thing to sell is a one bedroom condo. Think very carefully before stepping into this one...


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## BATMAN (Aug 15, 2005)

I live in 94024.............. it's really affordable.














If u IPO'd 5 years ago and cashed out early........


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