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Steerpike Jul 22nd 2017 5:16 pm

Leaving the Bay Area ...
 
Creating this thread as a spin-off from another thread (http://britishexpats.com/forum/usa-5.../#post12300227 ) so we can focus more closely on the issues associated with leaving the Bay Area. Here are the various posts from that thread that inspired me to start this one....


Originally Posted by malch (Post 12298888)
Same here, living in Fremont. Going into San Francisco is more of a drag that it is a pleasure these days. We pretty much only go there when we have to.

I want to leave the Bay Area but that has to wait until the wife quits work, and our youngest kid graduates from high school. The wife also want to see where our oldest kid ends up living.

This past few days I've been researching Eugene, OR which looks surprisingly attractive.


Originally Posted by johnwoo (Post 12298898)
I'm retired so I can go anywhere at any time, the trouble is, in spite of everything I kind of like it here, it's just that even a day or weekend out of town seems not worth the effort.


Originally Posted by malch (Post 12298920)
I'm retired too. But the transportation issues are killing me. And the cost of living is much bigger issue on a fixed retirement income. Mortgage is nearly done but property taxes are a killer. And it's not just housing...

Someone crunched the bumper of my daughter's car. She's currently out in Phoenix where a major body shop based their quote on $40/hr labor. Similar body shop here: $160/hr. That was an eye-opener for me.

Moving away would produce a materially higher standard of living for us. And as a bonus I kiss goodbye to I-680. That's not just a freeway problem anymore. It backs up onto the Fremont city streets frequently, to the point of gridlock.


Originally Posted by johnwoo (Post 12298928)
Yes I have to agree with all that, I feel the same way. I'm financially OK in that my house is paid for and property taxes under prop 13 keep it reasonable. House prices are so high at the moment I could bag a few 100K if I moved to a cheaper area. The big question is where to go?


Originally Posted by malch (Post 12298968)
I'm really not sure how long Prop 13 protection will last. A lot of people (many with clout) are itching to get rid of it.

The quality of life is much lower than it was when I moved here in 1992.
But, yeah, it's not easy picking an alternative. I'm struggling with that. Climate is a big factor as is being reasonably close to a city with some art, culture, amenities. I also want to avoid cities which are growing fast -- that always drives up the cost of living and infrastructure (esp. transport) tends to lag seriously behind population growth (esp. in CA). Don't want to go back to square one in 5 years.


Originally Posted by johnwoo (Post 12299073)
It's also true in Pleasanton and Dublin, these spaces have become fewer and don't get there by 10:05. People are waiting for them long before 10:00am Someone told me the get there between 9:30am and 9:45 and sit in the car until 10:00am Maybe I've just been unlucky, but I don't want to have to fight for a parking place. Just another hassle of living in an overcrowded area.
Having lived in the area since 1970 I find the quality of life has deteriorated to a point of almost intolerable. Perhaps because I'm judging it from what it was to what it has now become.


Originally Posted by Steerpike (Post 12299734)
As much as I defend BART, and love so much about the Bay Area, I'm probably bailing on the Bay Area for good pretty soon due to the unbelievable cost of real estate, coupled with the overcrowding / traffic situation. I've had a place in Scottsdale, AZ, for several years and I think it is time to make that my permanent home. I love it there, and don't mind the heat. For most people, the heat is a killer, though.


Originally Posted by malch (Post 12299738)
Some close friends of mine made the same move from Menlo Park to Scottsdale. They've been very happy although they travel a lot (I mean a LOT) so they get frequent breaks from the summer heat.


Originally Posted by Steerpike (Post 12299758)
I lived/worked in Scottsdale as my primary residence from 2009 to 2013, but I negotiated a deal where I got one week per month back in the Bay Area (they offered a relocation deal, I countered with a commitment to fly me home each month, which they accepted - I still had my house in CA). I loved it in Scottsdale but I did appreciate the trips out, especially during summer.

But now, I'm not working full time, and with the substantial money I will save being in AZ, making trips out of the area during summer will not break the bank. I've been here in Scottsdale for the past 3 weeks now, with temps over 100 every single day, and I'm perfectly ok with it; I went hiking one evening when it was 111F - my highest recorded hike temp ever :) .

I spent last weekend looking at open houses. We found fantastic places for less than half the Bay Area costs.


Steerpike Jul 22nd 2017 5:39 pm

Re: Leaving the Bay Area ...
 
OK, so to the topic of leaving the Bay Area ...

I've been in the Bay Area for 34 years, and I can say i've thoroughly enjoyed it. Always had high paying tech jobs, and managed to get into the housing market before it went crazy. I bought my first condo in SF in 85, and traded that up over several moves to a big house in the East Bay. I love the weather in the East Bay. There's a fantastic array of food choices thanks to the abundance of foreign folk in the area.

But now, I'm not working full-time any longer and I'm finding that even though I owned the same house for 22 years, the cost of maintenance is very high (scaffolding that cost $6,000 in 2004 cost roughly $20,000 this year, for example). Traffic is a nightmare if you need to get anywhere during 'normal hours'. Property taxes (even with prop 13) are high, and the cost of living is generally high. And the weather - while generally mild - has been very a real pain this past year with massive rainfall causing me no end of trouble with drainage/etc (this coming after years of drought, bringing its own set of issues).

House prices are at an all-time high. I personally can't see this continuing much longer, so I took the plunge and sold my house earlier this year. I'm now living in a temporary apartment, and spending time at my place in Scottsdale.

The great thing about living in CA is that you can move almost anywhere and save money. I personally love Scottsdale, and am scouting out houses there. But for those who prefer a cooler, wetter climate, you have Oregon and Washington to the north.

I spent 5 years living in Scottsdale from 2009-2013, and discovered that there was much to like about the place. While the dining options are not as diverse as the Bay Area, we found a good Indian restaurant, a great Dim Sum place, a great 'Pho' place, and a ton of very healthy casual spots that are better than anything we found in the Bay Area. The traffic is a breeze in general, stores appear 'empty' by comparison to the crowded stores in the Bay Area, and just about everything is cheaper - from gas at $2:10/gallon to property taxes and income taxes. And of course, real-estate ... you can buy something really fancy in a ritzy development in Scottsdale for a lot less than the Bay Area; and if you are willing to go to cities such as Chandler, Tempe, or Mesa you can get REALLY cheap housing.

My strategy is likely going to be - buy something small and decent in Scottsdale, and with the money I save, make a lot more trips out of the area during the summer when the temperature gets really high.

PS ... I'm still considering So Cal also; I"m off to Pasadena / Glendale this weekend for a look at real estate. I suspect it's cheaper but not cheap enough. I also plan to check out San Diego, but again - while it may be a bit cheaper than the Bay Area, it's not 'cheap enough' to make it worth the move.

malch Jul 22nd 2017 6:52 pm

Re: Leaving the Bay Area ...
 

Originally Posted by Steerpike (Post 12300242)
OK, so to the topic of leaving the Bay Area ...

I've been in the Bay Area for 34 years, and I can say i've thoroughly enjoyed it.

I enjoyed it too, until about 5 years ago.


Originally Posted by Steerpike (Post 12300242)
I spent 5 years living in Scottsdale from 2009-2013, and discovered that there was much to like about the place. While the dining options are not as diverse as the Bay Area, we found a good Indian restaurant

You also have: Cornish Pasty Co.

I grew up in Cornwall, and am happy to testify these are the most authentic oggies you'll find outside of Cornwall. And they have a terrific selection of beers too :-)


Originally Posted by Steerpike (Post 12300242)
PS ... I'm still considering So Cal also; I"m off to Pasadena / Glendale this weekend for a look at real estate. I suspect it's cheaper but not cheap enough. I also plan to check out San Diego, but again - while it may be a bit cheaper than the Bay Area, it's not 'cheap enough' to make it worth the move.

I love San Diego but, as you say, house prices in the nice areas (e.g. La Jolla) are as insane as the Bay Area. One of the candidates on my list is Carlsbad and the surrounding area. Great climate, more reasonable housing but easy access to L.A. and San Diego.

deadshoppingmalls Jul 23rd 2017 3:28 am

Re: Leaving the Bay Area ...
 
We left the Bay Area and it was for the simple reason of insecurity

We had an enviable set up- in theory. Between us, we earned over $150K and had a rent controlled apartment (a steal @ $2500 for a 2bd/2br in the Inner Sunset with parking included).

But all that glitters isn't gold. We wanted to start a family, my wife wanted to stop working (she earned ~$50K working in an office in a job that she hated). Likewise, we heard rumblings that our landlord was going to Ellis Act the building and sell it to the condo building that had taken over the rest of the block. Further to that, my company had been restructured to the point that all new IT jobs were going to Europe (so if someone quit, the job was filled in Europe).

There was zero longterm stability. If we lost the apartment due to the Ellis Act, we'd not get a place in the city, at least a 2BR. If I lost my job, my wife's salary would not keep us living in the city. Even though we had savings, stocks etc - it was all...unsettling to the point that when we were celebrating a positive pregnancy test, a colleague had quit and that was one more job going to Europe meaning one more early morning TC.

So I started vaguely looking for work elsewhere. Found it - in Texas. The salary had a 30K bump (with 0% state tax), moved us out there to Dallas which is hot as balls, but a nice enough city and as a job is stable as you could hope for (our team is actually tripling in size nationally).

A month after I quit my old job, everyone was given notice that as of January 2018, all the positions were moving to Europe. 2 weeks after we left our building, Ellis notices were served to the residents who all had to leave by Feb 2018. So in all this, if I had waited it out, we would have been up financially by an OK amount, but no job, no apartment and a new baby.

Instead, we have a lovely rented 3BR in a fun part of Dallas with a substantial rise in our QOL (I work from home and only travel domestically on day trips or at most 1 over night every couple of months) and a substantial dip in our COL (it's not the Bay Area)

It was the right move. I miss SF and the surrounding country like hell, especially as it's 115F here in the day at the moment but in 2 years I have my company's word of moving to NYC which makes all of this VERY worth while.

carcajou Jul 23rd 2017 4:56 am

Re: Leaving the Bay Area ...
 
I lived in Seattle for a few years and we had a lot of California refugees. The only California city I would live in right now is San Diego.

Arizona has become a bit of a refuge for Midwesterners and Californians; two friends of mine from Chicago recently moved there and were able to do things like buy a house that they might not have been able to do in Chicago.

I would encourage you to also investigate Las Vegas, Salt Lake City, and Denver. I worry Seattle is going the way of San Francisco.

I have been to Eugene a few times (for academic reasons) and though it is a bit off the coast, has lower cost of living due to the need to cater to students (and Corvallis is not far off either). I don't know that I would move there but I can see the appeal. The thing with Eugene is it is relatively isolated - Portland isn't all that close (3 hours I believe?) and after that Seattle and San Francisco are quite a hike.

If you work for a tech company, do what you need to do to protect yourself. I trust tech companies like I trust banks.

johnwoo Jul 23rd 2017 10:17 pm

Re: Leaving the Bay Area ...
 

Originally Posted by carcajou (Post 12300547)
I lived in Seattle for a few years and we had a lot of California refugees. The only California city I would live in right now is San Diego.

Arizona has become a bit of a refuge for Midwesterners and Californians; two friends of mine from Chicago recently moved there and were able to do things like buy a house that they might not have been able to do in Chicago.

I would encourage you to also investigate Las Vegas, Salt Lake City, and Denver. I worry Seattle is going the way of San Francisco.

I have been to Eugene a few times (for academic reasons) and though it is a bit off the coast, has lower cost of living due to the need to cater to students (and Corvallis is not far off either). I don't know that I would move there but I can see the appeal. The thing with Eugene is it is relatively isolated - Portland isn't all that close (3 hours I believe?) and after that Seattle and San Francisco are quite a hike.

If you work for a tech company, do what you need to do to protect yourself. I trust tech companies like I trust banks.

Or Aerospace Companies, I started life in the US in Seattle working for Boeing.
There's very little in the way of protection in the job market.

johnwoo Jul 23rd 2017 10:39 pm

Re: Leaving the Bay Area ...
 
I might add the Tech companies or part of the Bay Area problem, high wage employees moving in from who knows where driving up house prices to absurd levels. People in SF are literally being driven out of their homes to make way for "google" employees. A house across the street from me sold for $50K over the asking price. Houses in this area are increasing in value $100k a year, Madness.
This whole craziness must end in tears, should I take my million dollars and run?

malch Jul 24th 2017 3:25 am

Re: Leaving the Bay Area ...
 
I'm inclined to say yes. Mrs malch would say no, because she believes Bay Area property prices will continue to appreciate.

I'm inclined to think we may be in a bubble. But even if that's not the case, I can't see how house prices can continue rising at historic rates. There's a natural cap when rental rates start to approach net salaries. Who's going to spend 100% of their income to live near a well paid tech job?

The big tech employers don't want skyrocketing salaries so that isn't going to happen. That's why they love the H1B program. So, sell your million dollar house and let the buyer tear it down and build 150 apartments in its place. That will make everyone happy.

Buy a mansion in Scottsdale, with a really big air conditioner!

:-)

johnwoo Jul 24th 2017 4:16 am

Re: Leaving the Bay Area ...
 

Originally Posted by malch (Post 12301432)
I'm inclined to say yes. Mrs malch would say no, because she believes Bay Area property prices will continue to appreciate.

I'm inclined to think we may be in a bubble. But even if that's not the case, I can't see how house prices can continue rising at historic rates. There's a natural cap when rental rates start to approach net salaries. Who's going to spend 100% of their income to live near a well paid tech job?

The big tech employers don't want skyrocketing salaries so that isn't going to happen. That's why they love the H1B program. So, sell your million dollar house and let the buyer tear it down and build 150 apartments in its place. That will make everyone happy.

Buy a mansion in Scottsdale, with a really big air conditioner!

:-)

Arizona is definitely not in my future. One visit was enough, my son went to school there and he agrees. He lives in San Luis Obispo, but that's expensive also, but it is a definite maybe. My daughter lives in Pleasanton, a house that cost her $260K is now $1 Mil+ insane.
I've spent most of my life in the East Bay and I'm weighing up the pluses and minuses. It's like breaking up with someone you love but you know it was the right decision and in retrospect you wonder if it really was.

Cape Blue Jul 24th 2017 9:22 am

Re: Leaving the Bay Area ...
 
I loved living in SF (marina), it's a fantastic place, but whilst I could afford it, I felt like a hamster on the wheel and I could not choose to downsize my job and sensibly continue living there.

malch Jul 24th 2017 4:25 pm

Re: Leaving the Bay Area ...
 

Originally Posted by johnwoo (Post 12301446)
Arizona is definitely not in my future. One visit was enough, my son went to school there and he agrees. He lives in San Luis Obispo, but that's expensive also, but it is a definite maybe. My daughter lives in Pleasanton, a house that cost her $260K is now $1 Mil+ insane.
I've spent most of my life in the East Bay and I'm weighing up the pluses and minuses. It's like breaking up with someone you love but you know it was the right decision and in retrospect you wonder if it really was.

Heh, San Luis Obispo is on my list too. Very pretty place with great climate but, as you say, housing is very expensive.

Steerpike Jul 24th 2017 5:17 pm

Re: Leaving the Bay Area ...
 

Originally Posted by Cape Blue (Post 12301619)
I loved living in SF (marina), it's a fantastic place, but whilst I could afford it, I felt like a hamster on the wheel and I could not choose to downsize my job and sensibly continue living there.

So what did you do / where did you go?

Steerpike Jul 24th 2017 5:32 pm

Re: Leaving the Bay Area ...
 

Originally Posted by johnwoo (Post 12301340)
I might add the Tech companies or part of the Bay Area problem, high wage employees moving in from who knows where driving up house prices to absurd levels. People in SF are literally being driven out of their homes to make way for "google" employees. A house across the street from me sold for $50K over the asking price. Houses in this area are increasing in value $100k a year, Madness.
This whole craziness must end in tears, should I take my million dollars and run?


Originally Posted by malch (Post 12301432)
I'm inclined to say yes. Mrs malch would say no, because she believes Bay Area property prices will continue to appreciate.

I'm inclined to think we may be in a bubble. But even if that's not the case, I can't see how house prices can continue rising at historic rates. There's a natural cap when rental rates start to approach net salaries. Who's going to spend 100% of their income to live near a well paid tech job?

The big tech employers don't want skyrocketing salaries so that isn't going to happen. That's why they love the H1B program. ...

'Tech' is what brought me here back in '83, and what has fueled the Bay Area since Fairchild Semiconductor and others started building tech stuff in the 50s, so I don't think it makes sense to blame tech.

The last real-estate bubble certainly ended in tears in 2008/9, and there were prior bubbles too. I was surprised to see the prices rise above their 2007/8 levels recently. As much as the recent rise has been crazy, the values have only just exceeded their 2007/8 levels. See this chart, from https://www.paragon-re.com/trend/cas...ng-home-prices . All indications are, the current cycle is coming to a close (based purely on cycle dynamics).

https://my.paragon-re.com/Docs/Gener...88-Present.jpg

As for prices reaching a natural limit, my nephew is in his early 30s and recently did a career change into the tech industry. He is making a surprising $130k at his programming job in Sunnyvale. His partner is probably making more than that, so between them, they are making close to $300k. With $300k income, an $850k mortgage is not beyond reason. He's out looking at townhouses in San Jose these days.

Giantaxe Jul 24th 2017 5:41 pm

Re: Leaving the Bay Area ...
 

Originally Posted by malch (Post 12301432)
I'm inclined to say yes. Mrs malch would say no, because she believes Bay Area property prices will continue to appreciate.

I'm inclined to think we may be in a bubble. But even if that's not the case, I can't see how house prices can continue rising at historic rates. There's a natural cap when rental rates start to approach net salaries. Who's going to spend 100% of their income to live near a well paid tech job?

I'm inclined to think neither. I did think we were in a bubble in 2005, because of the fact that mortgage financing was so out of whack. This was brought home to me by selling a property that year and seeing the financing associated with the six offers that were received the day it went up for sale. Absolute madness. We are not seeing that kind of lax financing now, and in fact requirements are a lot more stringent than used to be the case. so my best guess is that prices will stagnate for quite a while.


Originally Posted by malch (Post 12301432)
Buy a mansion in Scottsdale, with a really big air conditioner!

Fine of you want to stay indoors; I don't. I just did a cycling weekend by the Sacramento River - temps in the upper '90's. I survived, but that kind of heat is wearing when you want to do relatively strenuous outdoor exercise. Got back to SF last night and the temperature was... 56F.

Steerpike Jul 24th 2017 5:42 pm

Re: Leaving the Bay Area ...
 

Originally Posted by deadshoppingmalls (Post 12300503)
We left the Bay Area and it was for the simple reason of insecurity

We had an enviable set up- in theory. Between us, we earned over $150K and had a rent controlled apartment (a steal @ $2500 for a 2bd/2br in the Inner Sunset with parking included).

But all that glitters isn't gold. We wanted to start a family, my wife wanted to stop working (she earned ~$50K working in an office in a job that she hated). Likewise, we heard rumblings that our landlord was going to Ellis Act the building and sell it to the condo building that had taken over the rest of the block. Further to that, my company had been restructured to the point that all new IT jobs were going to Europe (so if someone quit, the job was filled in Europe).

There was zero longterm stability. If we lost the apartment due to the Ellis Act, we'd not get a place in the city, at least a 2BR. If I lost my job, my wife's salary would not keep us living in the city. Even though we had savings, stocks etc - it was all...unsettling to the point that when we were celebrating a positive pregnancy test, a colleague had quit and that was one more job going to Europe meaning one more early morning TC.

So I started vaguely looking for work elsewhere. Found it - in Texas. The salary had a 30K bump (with 0% state tax), moved us out there to Dallas which is hot as balls, but a nice enough city and as a job is stable as you could hope for (our team is actually tripling in size nationally).

A month after I quit my old job, everyone was given notice that as of January 2018, all the positions were moving to Europe. 2 weeks after we left our building, Ellis notices were served to the residents who all had to leave by Feb 2018. So in all this, if I had waited it out, we would have been up financially by an OK amount, but no job, no apartment and a new baby.

Instead, we have a lovely rented 3BR in a fun part of Dallas with a substantial rise in our QOL (I work from home and only travel domestically on day trips or at most 1 over night every couple of months) and a substantial dip in our COL (it's not the Bay Area)

It was the right move. I miss SF and the surrounding country like hell, especially as it's 115F here in the day at the moment but in 2 years I have my company's word of moving to NYC which makes all of this VERY worth while.


Originally Posted by carcajou (Post 12300547)
...

If you work for a tech company, do what you need to do to protect yourself. I trust tech companies like I trust banks.

I don't understand this 'distrust' of tech companies. Tech companies are not charities; they exist to make money. They hire like crazy when things are going well, and they fire like crazy when things are not going well. Do you see people complaining when they are hiring people in droves, and at crazy rates? It's this flexibility to hire and fire that keeps the Bay Area tech companies agile. Some go bust, but others come in to take their place. Everyone I know that was laid off back in the various 'crash' cycles pretty quickly got a new job, and in general for more money than before. It seems very narrow to be worrying about one company downsizing/moving elsewhere, when 5 other companies are hiring / expanding next door. If you look at the Bay Area over the past 30 years, I think you'll see a net increase in employment and in salaries.

That said, I've heard great things about the Dallas economy, and if you can stand the weather there, then it sounds like a great place to be. I recently got taken out around the 'up and coming' downtown area, and it was indeed a lot of fun - great dining, drinking opportunities. I personally can't take high humidity and lots of rain, so Dallas doesn't cut it for me, but to each his own. Scottsdale is hotter than hell but "It's a Dry Heat" as they say, and that does make a big difference for me.


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