Buying a home post graduation.

[confettiflyer]

@confettiflyer Regardless of anyone's individual circumstances, it does not make sense to have mortgage expenses >50% of 6k/month take home pay...

I generally agree with that, but I don't presume that my opinion is the best one for all sets of circumstances.

I'm already thinking of someone who pays, say, $1700/mo to send one kid to private high school if local publics are inadequate (don't know the average rate, used a local school's numbers).

Or $800/mo for day care because retired parents are not close by and live in a high cost area.

Then you consider the higher payment and property taxes to subsidize the education or child care cost.

Or if you just straight up value city life and all that it offers over all other things don't compare...that's your choice, some people get high on $3000 worth of cocaine, others get high on what a $3000 mortgage gets them.

That's been my message all along...take everyone's advice but make your own decision that makes you happy and keeps your financial condition acceptable to you.

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[BMBiology]

SF housing is cooling off?

http://www.cnbc.com/2016/02/12/cooling-ahead-for-high-end-san-francisco-real-estate.html

 

[BMBiology]

In confettiflyer's defense, I know a few pharmacists in SF who purchased a 1-1.2M house. I am not talking about a husband and wife pharmacist. Just the wife is a pharmacist and the husband makes like 40 k a year. I guess they figure the interest rate is so low that it is worth the risk.

 

[Momus]

Trust me. You don't want to live in suburbs when you are young. If you are young and you have a difficulty finding a decent new restaurant or activity to try out, you probably live in suburbs no mans land BFE. Suburb living is probably right when you have a wife/husband, 2-3 kids, and your adventure days are over just doing mundane sh1t every damn day 凸(｀⌒´メ)凸

 

[confettiflyer]

Trust me. You don't want to live in suburbs when you are young. If you are young and you have a difficulty finding a decent new restaurant or activity to try out, you probably live in suburbs no mans land BFE. Suburb living is probably right when you have a wife/husband, 2-3 kids, and your adventure days are over just doing mundane sh1t every damn day 凸(｀⌒´メ)凸

Personal experience?

njac and I will drink and extra drink for you my brother ::fist bump::

 

[WVUPharm2007]

I love living in the suburbs.

 

[confettiflyer]

I love living in the suburbs.

The running joke here is San Francisco is a suburb of Silicon Valley, hahah

 

[awval999]

These threads make me appreciate living in the Midwest. My wife and I go to NYC once a year for a long weekend. It's wonderful. But I would never want to end up in that rat race competing for housing against bankers and billionaires. My 3/2 house was under $200k and in walking distances to shops, restaurants and Whole Foods. It's a suburban/inner-ring suburb. Definitely the perfect mix of city/suburbs for us. And the low cost of living will enable my wife to stay at home when we have children. It's really going to make for an easy peasy way of life.

 

[Eichhoernchen]

A lot of you sound like you are looking down on people who have chosen to live in a more expensive area. Consider we are all different with our own priorities, lifestyle, interests, career goals etc...

 

[bacillus1]

The running joke here is San Francisco is a suburb of Silicon Valley, hahah

Eh, I have said many times that San Jose is one giant suburb. The only good thing about SJ is San Pedro Square Market.

 

[wagrxm2000]

A lot of you sound like you are looking down on people who have chosen to live in a more expensive area. Consider we are all different with our own priorities, lifestyle, interests, career goals etc...

Its not looking down on people, its hopefully showing some new grad who isn't used to having money who happens to look at this thread that there's life outside the major cities where you can live the same lifestyle but for less.

No one has yet to explain a single perk to living in an expensive area.

Ill add this, if you are able to max out your ira and 401k then go ahead and splurge early in life.

 

[njac]

I love living in the suburbs.

You're married.

 

[EyeTeeFarmer]

This is what happened to my friend. He and his wife are both pharmacist. They are in their 30s and they purchased a 1.2M house with 20% down payment. His wife can no longer work due to an unexpected health issue. So it is just his pharmacist salary. There is no way they can keep up with the mortgage payment unless he works 60-70 hours a week. He can do it for a year or two but certainly not for the next 30 years.

WHAT? I'm about to be married to a pharmacist. And we have no intention of buying a house more than 3 times what we make which would be 600k total. This is the best example of why one should not spend that much on housing. Except it's hard to believe that's a real case.

 

[bacillus1]

WHAT? I'm about to be married to a pharmacist. And we have no intention of buying a house more than 3 times what we make which would be 600k total. This is the best example of why one should not spend that much on housing. Except it's hard to believe that's a real case.

Not hard to believe, that's the going rate for a 3BR house in many locations in the Bay Area.

 

[EyeTeeFarmer]

Not hard to believe, that's the going rate for a 3BR house in many locations in the Bay Area.

I'm not contesting anything with you, I just find it amazing and hard to wrap my head around it. How can anyone afford that on a dual-pharmacist's salary, much less a single pharmacist? Assuming no debt on either husband or wife, how much would a bank even lend? Then goes the business of having to write a 200-250k check for down payment.

I thought people on the west coast get paid around the same as on the east coast, give or take a couple thousand. These people must do pharmacy as a hobby and primarily rob banks as their main gig.

 

[njac]

I thought people on the west coast get paid around the same as on the east coast, give or take a couple thousand. These people must do pharmacy as a hobby and primarily rob banks as their main gig.

My experience In the last 2 years interviewing for clinical specialist jobs found that CA pays 20-30% more for very similar jobs.

 

[MatCauthon]

Expensive house is doable with no kids and no student loans. But is it really worth it?

 

[awval999]

I'm not contesting anything with you, I just find it amazing and hard to wrap my head around it. How can anyone afford that on a dual-pharmacist's salary, much less a single pharmacist? Assuming no debt on either husband or wife, how much would a bank even lend? Then goes the business of having to write a 200-250k check for down payment.

I thought people on the west coast get paid around the same as on the east coast, give or take a couple thousand. These people must do pharmacy as a hobby and primarily rob banks as their main gig.

Because people are financially stupid.

 

[SouthernRetailRPH]

Y'all come to The South. You could buy a house on the ocean for around $1mil if you really wanna drop that kind of money. Luckily I live in a really low COL medium sized town where my 2000sf house only cost around 140K, but I do understand the need for more expensive places in cities/more desirable areas. I would just keep in mind future expenses that come years after graduation like child care (mine is 1000/month for infant son) and others. I enjoy the flexibility to still be able to save for retirement, other investments, etc

 

[confettiflyer]

I seriously don't understand all this faux-outrage/incredulous questioning. It's just normal to pay that much for a house and mortgage around here...people are still maxing our retirement accounts doing that. People who could do better outside the state, as a whole, have already moved.

It's just a cost...I pay about $500/yr from the utility for electricity because of solar panels, some people pay that much per month in Philly. I've seen utility bills exceed mortgages.

I mean...do you non-Californians know how prop 13 works here? Because that explains a lot of the largesse in pricing vs. say New Jersey. My jaw once dropped when I asked what the property taxes were on a $250k house in NJ.

Discussion housing prices without concurrent discussion of property tax law in CA is one-dimensional.


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[confettiflyer]

I thought people on the west coast get paid around the same as on the east coast, give or take a couple thousand. These people must do pharmacy as a hobby and primarily rob banks as their main gig.

The starting offer I had in Philadelphia (inpatient acute) in 2012 is $40,600/yr less than I'm making today in the SF Bay Area in 2016. So about a 36% difference. If you account for the 4yrs, njac's answer of about 30% makes sense.


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[BMBiology]

People who are not from California don't get it. I don't ever see myself moving out of California. My family and friends are here. Great weather year round. Diversity. Go to the beach on Sat, then go to the mountain on Sun. Where else can you do this?

When I was shopping for a mortgage. Chase told me I can buy a 1.1M house. That was tempting!

 

[confettiflyer]

.

No one has yet to explain a single perk to living in an expensive area.

Mexican food. Mexicans!
Multicultural activities.
Street food is life.
Public transit robustness.
Easy access to international travel routes directly without connection.
I spent the day outside sailing on a 75 degree day in the middle of February.
I can take a boat to work if I really want.
Asians. Asians everywhere.
Women in yoga pants...all the time.
Like-minded hippie and hipster people and all their gentrification (yah I kind of like that stuff)
For all the parents...high end prep schools with direct pipelines to Stanford and Cal.

But again if the above aren't important to you, then it doesn't matter. Am I maxing out my 401k? Yes. Am I contributing to a backdoor Roth? A little bit, some years more than others.

Am I living the life I want? Hell freaking yeah.

I figure once a house is paid off, my costs will be ultra-low...obviates the need for an obscenely large retirement account. A large one will do just fine.


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[Ackj]

I mean...do you non-Californians know how prop 13 works here? Because that explains a lot of the largesse in pricing vs. say New Jersey. My jaw once dropped when I asked what the property taxes were on a $250k house in NJ.

Taxes are pretty brutal in NY. Starting to look at houses now, and I'm finding some where the tax is more than the mortgage payment. We have fairly low home prices overall, but the taxes certainly tilt the scales against you. Depending on the zip code and county, taxes are 3.5-4.5% of the property value. So even if you hurry up to pay off your $200k mortgage, you can still be on the hook for $10k/year in property tax.

 

[TheBlaah]

I figure once a house is paid off, my costs will be ultra-low...obviates the need for an obscenely large retirement account. A large one will do just fine.

Sounds like a contradiction when you're mentioning street food, public transit/parking, international travel, sailing, and high end prep schools. Seems like a high cost of living.

But I get the point, different strokes for different folks.

I am curious about what the property prices would be in Cali for as similar house/area as my own. I live in an area where a 3.5k sq ft house will net around 300k on the outskirts of a major city. But this obviously comes at a reduced salary by around 25k compared to Cali and the decreased income tax/increased property taxes pretty much nullify each other.

 

[confettiflyer]

Sounds like a contradiction when you're mentioning street food, public transit/parking, international travel, sailing, and high end prep schools. Seems like a high cost of living.

But I get the point, different strokes for different folks.

I am curious about what the property prices would be in Cali for as similar house/area as my own. I live in an area where a 3.5k sq ft house will net around 300k on the outskirts of a major city. But this obviously comes at a reduced salary by around 25k compared to Cali and the decreased income tax/increased property taxes pretty much nullify each other.

Contradiction? It was two different thought streams, I was discussing things I value...I don't value money the way I used to, not anymore. A long time ago in a galaxy far far away I wasn't a pharmacist and I made decent money, some stuff happened in life and I realized minimizing cost just to bank the $$ wasn't what life was about. But anyway....

I once did a direct comparison of Pittsburg vs. San Jose, CA and found that, at almost double the salary, both places end up a wash (when factoring in taxes, buying a median priced home, etc...)

Anyway, how far outside of a major city? If you're talking 1hr roughtly due east of San Francisco with zero traffic - the house prices for a 3500 sq. ft house are roughly $500,000-$700,000. Roughly. Obviously zero lot line houses will be cheaper than the giant 10,000 sq ft lots some developments have. Houses within driving range of BART (transit) will command a higher premium than those without. The exceptions would be some places in Oakland, Vallejo, or other economically challenged cities....but in those areas, 3500+ sq ft only exist as new construction, if they exist at all. But you're asking for suburbs, so yeah $500-$700k.

 

[confettiflyer]

Taxes are pretty brutal in NY. Starting to look at houses now, and I'm finding some where the tax is more than the mortgage payment. We have fairly low home prices overall, but the taxes certainly tilt the scales against you. Depending on the zip code and county, taxes are 3.5-4.5% of the property value. So even if you hurry up to pay off your $200k mortgage, you can still be on the hook for $10k/year in property tax.

That's f*cking insane. 4.5%??? That's like more than quadruple the property taxes in CA. Do they reassess you every year to increased property value too?

Jesus.

 

[confettiflyer]

Here, my friend posted this, might help you guys visualize things I'm talking about (hahahah)

 

[TheBlaah]

Anyway, how far outside of a major city? If you're talking 1hr roughtly due east of San Francisco with zero traffic - the house prices for a 3500 sq. ft house are roughly $500,000-$700,000. Roughly. Obviously zero lot line houses will be cheaper than the giant 10,000 sq ft lots some developments have. Houses within driving range of BART (transit) will command a higher premium than those without. The exceptions would be some places in Oakland, Vallejo, or other economically challenged cities....but in those areas, 3500+ sq ft only exist as new construction, if they exist at all. But you're asking for suburbs, so yeah $500-$700k.

I'm talking about the suburbs around Atlanta btw. I'd say around 15-30 minutes away from downtown, if it really is zero traffic, which it never is really.

 

[awval999]

Mexican food. Mexicans!
Multicultural activities.
Street food is life.
Public transit robustness.
Easy access to international travel routes directly without connection.
I spent the day outside sailing on a 75 degree day in the middle of February.
I can take a boat to work if I really want.
Asians. Asians everywhere.
Women in yoga pants...all the time.
Like-minded hippie and hipster people and all their gentrification (yah I kind of like that stuff)
For all the parents...high end prep schools with direct pipelines to Stanford and Cal.

But again if the above aren't important to you, then it doesn't matter. Am I maxing out my 401k? Yes. Am I contributing to a backdoor Roth? A little bit, some years more than others.

Am I living the life I want? Hell freaking yeah.

I figure once a house is paid off, my costs will be ultra-low...obviates the need for an obscenely large retirement account. A large one will do just fine.


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Confetti once again makes elegant points.

It's up to what you value. I value travelling and spend (to some people) a sickening amount on it. I also drive a Honda Civic. And live in a 3/2 bungalow.

Obviously to some people living in California with the higher expenses make sense to some. To others it's probably like living in hell. I personally couldn't deal with the perpetual/overwhelming debt of a California lifestyle. It's the same reason why I would never use/consider PSLF. It's just the way some people feel.

 

[wagrxm2000]

Mexican food. Mexicans!
Multicultural activities.
Street food is life.
Public transit robustness.
Easy access to international travel routes directly without connection.
I spent the day outside sailing on a 75 degree day in the middle of February.
I can take a boat to work if I really want.
Asians. Asians everywhere.
Women in yoga pants...all the time.
Like-minded hippie and hipster people and all their gentrification (yah I kind of like that stuff)
For all the parents...high end prep schools with direct pipelines to Stanford and Cal.

But again if the above aren't important to you, then it doesn't matter. Am I maxing out my 401k? Yes. Am I contributing to a backdoor Roth? A little bit, some years more than others.

Am I living the life I want? Hell freaking yeah.

I figure once a house is paid off, my costs will be ultra-low...obviates the need for an obscenely large retirement account. A large one will do just fine.


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I don't really see anything here you can't get elsewhere. You aren't maxing your roth every year? Ouch, have fun working in your 50s.

 

[confettiflyer]

I don't really see anything here you can't get elsewhere. You aren't maxing your roth every year? Ouch, have fun working in your 50s.

No max Roth but I'm keeping a lot of retained earnings in my corp for acquisition/investment use in the next 5-10yrs.

But...I love my pharmacy job, I'll probably be like this old guy in his 70's I have at work that works a few days a month inspecting our crash carts. The idea of straight retiring in my 50's is distasteful.

I once lived in Las Vegas, which has most the above things:

1) I guess I can go sailing...on Lake Las Vegas.
2) Hipsters are congregating in the north strip area, friend opened a Thai restaurant there...yum.
3) There's Mexicans and Asians, for sure.
4) Public transit - I guess there's that monorail that takes you to casinos.
5) Multiculturalism - Does the Wynn buffet count? I guess you can count that. Oh there's a Chinatown.
6) If you don't mind limited destinations abroad, LAS can get you there.
7) Schools suck, better send your kid to private school.

So yeah, I guess you can substitute most things on the list with an alternative in a low cost area like Las Vegas....

....but that place is just f*cking depressing and soul crushing. Some things just aren't worth the money.

Though as an aside, I do admire folks who are content/happy with much cheaper alternatives. It's the fastest way to get to the top of wealth mountain, if that's your ultimate goal. It's like dieting...calories in vs. calories out (pick one, or both).

I mean, some people are perfectly content with a shoe sandal of a steak purchased at their local wal-mart and cooked at home, other people really want a cut of A5 wagyu that's $185 / 3 oz cut. There's $2 Trader Joe's wine and $200 Bordeaux.

It's all values...like I said. You clearly value retiring in your 50's, I don't, but I do toy with the idea of part-time work at that point.


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[confettiflyer]

Confetti once again makes elegant points.

It's up to what you value. I value travelling and spend (to some people) a sickening amount on it. I also drive a Honda Civic. And live in a 3/2 bungalow.

Obviously to some people living in California with the higher expenses make sense to some. To others it's probably like living in hell. I personally couldn't deal with the perpetual/overwhelming debt of a California lifestyle. It's the same reason why I would never use/consider PSLF. It's just the way some people feel.

Right after school, I traveled a lot. I also had a mattress on the floor of my bedroom (the only thing in there) and $9 plastic folding chairs from Ikea. I also had a Civic (I did get the sunroof, though).

awval - I think with the right amount of Zofran, you'd really like California.


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[EyeTeeFarmer]

Y'all come to The South. You could buy a house on the ocean for around $1mil if you really wanna drop that kind of money. Luckily I live in a really low COL medium sized town where my 2000sf house only cost around 140K, but I do understand the need for more expensive places in cities/more desirable areas. I would just keep in mind future expenses that come years after graduation like child care (mine is 1000/month for infant son) and others. I enjoy the flexibility to still be able to save for retirement, other investments, etc

I'm from the south too. If we had real public transit system here to help with traffic, it might be semi-ideal. Yoga pants in every Whole Foods, and lakes a-plenty, SEC/ACC football. I must admist, I am digging @confettiflyer's lifestyle though.

 

[wagrxm2000]

No max Roth but I'm keeping a lot of retained earnings in my corp for acquisition/investment use in the next 5-10yrs.

But...I love my pharmacy job, I'll probably be like this old guy in his 70's I have at work that works a few days a month inspecting our crash carts. The idea of straight retiring in my 50's is distasteful.

I once lived in Las Vegas, which has most the above things:

1) I guess I can go sailing...on Lake Las Vegas.
2) Hipsters are congregating in the north strip area, friend opened a Thai restaurant there...yum.
3) There's Mexicans and Asians, for sure.
4) Public transit - I guess there's that monorail that takes you to casinos.
5) Multiculturalism - Does the Wynn buffet count? I guess you can count that. Oh there's a Chinatown.
6) If you don't mind limited destinations abroad, LAS can get you there.
7) Schools suck, better send your kid to private school.

So yeah, I guess you can substitute most things on the list with an alternative in a low cost area like Las Vegas....

....but that place is just f*cking depressing and soul crushing. Some things just aren't worth the money.

Though as an aside, I do admire folks who are content/happy with much cheaper alternatives. It's the fastest way to get to the top of wealth mountain, if that's your ultimate goal. It's like dieting...calories in vs. calories out (pick one, or both).

I mean, some people are perfectly content with a shoe sandal of a steak purchased at their local wal-mart and cooked at home, other people really want a cut of A5 wagyu that's $185 / 3 oz cut. There's $2 Trader Joe's wine and $200 Bordeaux.

It's all values...like I said. You clearly value retiring in your 50's, I don't, but I do toy with the idea of part-time work at that point.


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Ill take your lifestyle and part time in my 50s. Enjoy your time in cal though, I've been there a couple of times during winter.

 

[confettiflyer]

I'm from the south too. If we had real public transit system here to help with traffic, it might be semi-ideal. Yoga pants in every Whole Foods, and lakes a-plenty, SEC/ACC football. I must admist, I am digging @confettiflyer's lifestyle though.

It's not all roses though - City's got a huge homeless issue (but this is nothing new, I think it was worse in the 90's, but still bad). And even though we make more than enough to cover it, having state taxes of 9.3% on income over $50k (single rate) stings -- at last it's deductible.

Ill take your lifestyle and part time in my 50s. Enjoy your time in cal though, I've been there a couple of times during winter.

Oh but the best time to be here is in the fall - after tourist season, before the rains (er, at least when it's not a drought).

 

[confettiflyer]

What's so great about yoga pants? You mean these, right?:

I didn't even have to open this thread, the new SDN app puts the photo within the thread title > <


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[y0ssarian87]

Here, my friend posted this, might help you guys visualize things I'm talking about (hahahah)

This is truly amazing and impressively accurate.

"DO NOT VISIT DURING LAZY BEAR WEEKEND"



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[y0ssarian87]

I didn't even have to open this thread, the new SDN app puts the photo within the thread title > <


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You know, that was the selling point for me. How does this thread devolve to this photo? Did not disappoint.


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[owlegrad]

I didn't even have to open this thread, the new SDN app puts the photo within the thread title > <


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Same thing just happened to me, I think I should delete it

My eyes!

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[Winged Scapula]

Same thing just happened to me, I think I should delete it

My eyes!

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I did it for you (due to multiple complaints)

 

[BenJammin]

I could never live in California because all of my guns are considered illegal.

 

[confettiflyer]

I could never live in California because all of my guns are considered illegal.

It's funny...I read this post twice, I don't know why...then I realized, it's because I don't even know what guns are legal or illegal in California. Then I googled it and realized there's all these laws in place.

Then I found it fascinating that there was something about California I didn't even think to learn about, because it never crossed my mind (yet I've read books on the implications of an 1848 treaty with Mexico on water rights). Go figure, eh?

 

[owlegrad]

I did it for you (due to multiple complaints)

Many thanks. Sadly the app has preserved the image for the thread, lol

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