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....

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.

Re: Leaving the Bay Area ...
 

I enjoyed it too, until about 5 years ago.

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 :-)

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.

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.

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.

Re: Leaving the Bay Area ...
 

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.

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?

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!

:-)

Re: Leaving the Bay Area ...
 

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.

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.

Re: Leaving the Bay Area ...
 

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

Re: Leaving the Bay Area ...
 

So what did you do / where did you go?

Re: Leaving the Bay Area ...
 

'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.

Re: Leaving the Bay Area ...
 

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.

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.

Re: Leaving the Bay Area ...
 

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.

Re: Leaving the Bay Area ...
 

Inflation-adjusted, we're below the 2008 peak in the Bay Area. You can play around with both non-adjusted and inflation-adjusted graphs on this page:

Case-Shiller Home Price Trends in 20 Cities - Real Estate Decoded

Re: Leaving the Bay Area ...
 

All very well if you are a Techie, you are taking a very narrow view of the demographics of the area, there are a lot more people who don't make anywhere near the salaries paid by Tech companies, the so called blue collar jobs, which are fewer and fewer. Meanwhile all that's left are low wage service industry jobs. It's difficult to imagine how someone on minimum wage could survive in the Bay Area, even people with modest incomes are force to the fringes at as far Tracy and beyond.

Re: Leaving the Bay Area ...
 

Part of the issue with house prices are generational changes in attitude among millennials. The previous generation wanted a big detached house on a corner lot and were happy to have it in the suburbs - CBDs were for commerce and warehouses. Today's millennial, in contrast, wants the loft apartment in the CBD and dreams of buying the warehouse below and turning it into a craft brewery. Yes, that apartment is a horribly expensive shoebox, but that's now seen as "part of the experience" and a major part of growing up.

San Francisco and New York have been the two massive hotbeds of this; for whatever reason they were the preferred spots (and SF not exclusively for tech). There was about a 10-year period where it was almost seen as a "rite of passage" that you had to live in both for a few years for "the experience" before "settling down."

American parents have by and large been willing to sacrifice their own retirements to chip in, which has put prices in range for many youngsters when otherwise it wouldn't be.

So, I have no idea if we are at the peak or not, but the market has changed.

Re: Leaving the Bay Area ...
 

Not sure what the graph proves, but I know for sure that homes in the Pleasanton, San Ramon and Danville areas are at an all time high. I know that my home is selling for far more than it would in 2008.

Re: Leaving the Bay Area ...
 

Not exclusively tech, but 'Google' commute buses to Santa Clara County show the extent the tech sector plays in gentrification.
Whether one considers gentrification a good or bad thing is another matter.
"Where you stand depends on where you sit"

https://timedotcom.files.wordpress.c...367&crop=1

Re: Leaving the Bay Area ...
 

I don't doubt it, but in the context of discussing whether or not we're in a fresh bubble, I think inflation-adjusted figures are more indicative.

Re: Leaving the Bay Area ...
 

Either way, housing costs are a huge problem for essential workers who are not making mega salaries. How are we going to attract and retain public school teachers, for example?

As for the corporate shuttle buses... I'm a huge fan. We have very limited public transit. And those buses are keeping a lot of cars (thousands) off the very clogged roads. It's good to see these companies contributing toward some (partial) solutions.

We're not going to get much help from the Valley Transit Authority (VTA) which is something of a joke. Despite horrible road congestion their light rail and bus ridership has been in steady decline.

Re: Leaving the Bay Area ...
 

How do you define a mega salary ? I mean...we were on a healthy joint salary of $150K and by myself $110K. After we had a kid we were technically going to be able to go on the list for "affordable" housing.

Good attitude, unfortunately not all concurred. It got to the point where our company told us to "vary" our route when walking home as activists were following some people. After being photographed 3 times getting off the bus, I gave up and started driving every day with a couple of colleagues. The end result was that our company bus lost ridership and let a few drivers go.

Re: Leaving the Bay Area ...
 

That is very sad. I was aware of a lot of opposition coming from certain activists, and certain cities like San Francisco. It calmed down a lot when the shuttle operators agreed to pay a tax/permit fee (averaging $100,000 per company).

But I'm assured it was never "just about the money" :-)

Re: Leaving the Bay Area ...
 

Perhaps not a bubble as in 2008, I'm wondering quite what is going on in this area with houses selling $40 to $50k above asking price, and the coming demand from a specific demographic, high tech Asians.

Re: Leaving the Bay Area ...
 

Of course shuttle buses are a good idea in principle, but they are symptomatic of long term residents being evicted to make room high tech high salaried workers who find it cool to live in the city.

SF's Tech Bus Problem Isn't About Buses. It's About Housing.

"The real problem—the reason the protests won't stop for good anytime soon—is that to many, these private shuttles are the rolling symbol of a class war pitting young, cash-rich tech workers against long-time San Franciscans who are being pushed out of their homes by evictions and out of the city altogether by astronomical rent prices. (Indeed, a 2015 Forbes ranking of worst cities to rent in closed with San Jose, Oakland and San Francisco in the top three spots.)"

http://https://www.wired.com/2016/02...about-housing/

Re: Leaving the Bay Area ...
 

But at least those shuttles are getting thousands of people to work (and keeping cars off the road).

Better to get mad at Facebook, which doesn't contribute anything useful :-)

Re: Leaving the Bay Area ...
 

You see, the bolded is part of my beef with SF.

A rental home is just that...a rental. Our first place in SF, we got Ellis Acted. The owner wanted to move his elderly parents in (it was a 4 story walk up with 4 apartments). He was awesome. Not only did he abide by the rules of Ellis to the letter, he slashed our rent to $1 for 3 months to ensure we had enough reserves for deposits and moving costs (on top of the $10K he paid us both as part of Ellis). We found a place across the street and could stay in the neighborhood. But in all honesty, if it wasn't for Ellis, we would have left happily with just two or 3 months notice. It was his apartment, we paid him rent in order to have a roof over our heads.

We moved into a building where one of the residents was paying $900 for a 3BR. That didn't even cover their share of the property tax on the unit for a year. Think about that - the landlord was losing money by having them there.

We're landlords to two apartments in Barcelona (another city with a property crisis akin to SF), both rented out long term to families below what we could get for them now as rentals. But damnit, if we needed or wanted to move back - they would have 3 months notice before we moved back and nothing more. While it's their apartment, it's our home.

Re: Leaving the Bay Area ...
 

As I have said, I love the Bay Area, and I love so much about San Francisco (I lived in the City for 12 years before moving to the 'burbs). But this whole 'shuttle bus' and 'class war' thing just pisses me off and is symptomatic about what is so messed up with the Bay Area.

San Francisco is one of the most beautiful cities in the country, and there are literally millions of people who would like to live there. So what gives 'existing residents' any special right to stay there? If you look at the city historically, there were strong Irish and Russian communities, but they were displaced by Asians. There are plenty of cheaper places outside of SF that people can move to.

I personally lived in SF from 83 to 95, but in 95 concluded it was just too expensive for me, and moved out to Walnut Creek - a move I thoroughly enjoyed. My nephew was renting a crappy studio in the City until recently; he vowed never to leave the City but ended up moving to Redwood City recently and absolutely loves it - he wonders now why he ever put up with all the hassles of the City. These 'activist' people seem to think they are a special class of people who deserve special protections from normal market forces. If I want to spend my life being an artist, then I can't also expect to live in the most expensive city in the US ... Oakland is now becoming a haven for these displaced SF folk, due to its affordability. And of course, there are people in Oakland complaining that they are being displaced by these refugees from SF ... it's just the normal cycle of life.

I'm now considering leaving the Bay Area because it's too expensive; I will enjoy 'the next place' just as much, I'm sure, for different reasons.

Re: Leaving the Bay Area ...
 

Remember, it's only 'very hot' in Scottsdale for about 4 months of the year (June-Sept); the rest of the time is really beautiful. And I've found some trails that are in the shade in the late afternoon, so while it is hot, it's not unbearable. Most serious hikers hike very early in the morning (sunrise) in summer, when the temps are surprisingly low - tomorrow morning at sunrise, it will be 84F, which due to low humidity will feel very nice. Also, as you know, Flagstaff is one of several nearby destinations outside of the Phoenix Metro that is very cool in summer (due to high elevation at 7,000 feet). It's a 2.5 hour drive, but its cheap to stay overnight. Sedona also offers wonderful hiking trails and remains cool most of the year, at 4,300 feet.

This year, in the Bay Area, it rained incessantly in winter, and this really impacted my hiking activities - all my favorite trails were inaccessible due to being muddy; I had to find paved trails right up through April. In Scottsdale, my favorite trails remain accessible all through winter, and the temps are 'perfect'.

Re: Leaving the Bay Area ...
 

You mean places like this in Oakland.
http://i2.cdn.cnn.com/cnnnext/dam/as...xlarge-169.jpg

Screw the poor who cares I'm alright? Maybe we could recreated the workhouse. What the hell are they doing in San Francisco anyway.

What are we to about the poor? they're such a nuisance.

Re: Leaving the Bay Area ...
 

I have no idea what the relevance of your reply is. There was a tragedy in Oakland and sadly many people died. Is this somehow related to the cost of housing? https://en.wikipedia.org/wiki/2016_O...warehouse_fire

Re: Leaving the Bay Area ...
 

I tend to agree (as a condo owner in SF :-)). Rent control is a piss poor intervention because it doesn't discriminate based on income of the renter and because it artificially lowers the availability of rental housing and thus increases rents for those that are new renters. You get people going to crazy lengths to hold onto a rent-controlled place, doing illegal sublets etc. And you get quite wealthy people who are paying well below the market rate merely because they've rented the place for ever.

Otoh, I don't agree with prop 13 either in that it ends up with like property being taxed at vastly different amounts depending on the purchase price. Although I do think property tax increases should be constrained, that aspect seems grossly unfair - Massachusetts' prop 2 1/2 is a fairer approach imo.

Of course, you could argue that my stances on rent control and prop 13 are somewhat inconsistent...

Re: Leaving the Bay Area ...
 

In your post you thought the poor should get out of SF, how I'm supposed to interpret that? To move into accommodation similar to that which ended in tragedy in Oakland.
Isn't that your solution for people that can no longer afford to live in the city, but who will be there be to do the dirty jobs?

Re: Leaving the Bay Area ...
 

Interesting - here's the chart for several major cities, inflation-adjusted, including LA, Las Vegas, Phoenix, Portland, SF. I'm surprised to see LA at the top of the appreciation list in 2007; I always thought it was Las Vegas and Phoenix that were highest in the last bubble. And LA is also recovering well.

Portland seems to be doing well; it didn't experience too much of a bubble, and is already back to the same levels as 2008.

I'm surprised 'inflation adjusted' prices are so different from non-adjusted prices, since inflation has been very moderate over the past several years.

Re: Leaving the Bay Area ...
 

The people who lived at the Ghostship weren't doing "dirty jobs", they were largely choosing the "lifestyle" that that place offered. I do agree that there is some relationship between high rents and the existence of places like that, but let's be realistic here: your average blue collar worker who is "priced out" of San Francisco, isn't moving to places like that.

Re: Leaving the Bay Area ...
 

I think Las Vegas is the bubble "poster child" because its ascent to peak was the steepest and its post-crash trough the lowest.

Re: Leaving the Bay Area ...
 

Maybe a little OTT, but I just get angry at people that seem to have complete lack of empathy for the poor and low paid workers. Something is happening to society were the less fortunate are cast aside like they don't matter. Where incarceration is one solution.

Re: Leaving the Bay Area ...
 

My point is, San Francisco is one of the most desirable places in the world, and it makes sense that there will be high demand and thus, high prices, for real estate. If you can't afford to live there, you can't expect the tooth fairy to swoop in and somehow magically 'fix' that for you; you need to look at alternatives. Many people I know who have moved out are ultimately happy with their decision, but there is a collection of people who seem to feel 'entitled' to special treatment and I just don't think they are being realistic. Protesting those shuttle buses is another manifestation of their delusions.

Finding a solution to keep school teachers, firefighters, and similar 'blue collar' workers in the city is of course a noble cause. As Giantaxe just mentioned in another post, rent-control is a failed policy. If the city government can somehow find a solution, good luck to them, but I've been around this for 34 years and I don't see one. I also don't think the people protesting the shuttle busses are teachers or firefighters.

One of the great ironies I remember from my move was that it used to take me 45 minutes to get from my SF condo (inner Richmond district) to downtown SF, but it only took me 35 minutes to get from Walnut Creek to downtown SF by bart. So this notion that you need to be living in the city to work there is just not logical.

Re: Leaving the Bay Area ...
 

Nor is it logical to expect to find cheap housing in Walnut Creek.