I wasn't talking about people making $200k, though. I was talking about people making $100k, because that's the number cherry picked by the person I was replying to.
And, yes, of course I'm aware that a Model S is the same price no matter where you buy it, to a first approximation. The point is that housing is so expensive in the Bay Area that you can actually end up having less disposable income left over for your car than someone making $20k less than you on paper in a much cheaper city and in a state with lower (or no) income taxes (Washington, Texas, maybe a few others?). If you don't believe me, you need to just sit down with a calculator that will do taxes and everything, look up comparable rents, and do the math. You sound like you might be surprised.
In this case, the SF bay area fellow I know works five days a week for a landscape/gardening company and pays taxes on that income. ($25/hour cash is additional off-the-books income.) And, contrary to your research, California has a $10,000 incentive.
Though you're right about the down payment, so let's assume it will be a used Tesla and therefore cheaper. And you're right about the relative comparison point. But these were rough numbers, remember, and not intended to be a detailed argument as much as a refutation of the impossible "to afford" claim above.
That they bought themselves? What's the cheapest home available within an Hour of SF, 500k or more? Do you really think a car salesman barely pushing 100k a year can swing that? Or are you implying that car salesman in the Bay are making top 1% salaries?
A low-end Mercedes is not much more than a new Honda Accord. It probably wasn't the greatest decision, but it also probably wasn't as irresponsible as you are trying to make it sound.
If you think someone spending $30k on a car with a $120k income is bad, you probably don't want to hear about the folks buying those cars while making half that amount (or worse, leasing them).
Besides, they were pretty conservative with their home purchase. A $250k house on a $120k income is way more conservative than what a lot of people do these days. Just by virtue of the home price, I'd argue they were doing better than the typical Bay Area programmer, who might make $120k but face home prices 5-15 times their income.
I'm not in the bay area, but I think I could blow my entire income. Some top floor luxury apartments are north of $5000 a month (even for 1 bedroom, I've seen 3 bedroom ones north of $7,000). Add in a top end Tesla with insurance and parking is another $2500 a month. That's $90,000 a year right there. Throw in expensive groceries, eating out every day, first class travel, 5 star hotels and it'd be pretty easy.
I don't live in SF, I had a cursory google and came up with [0] for 2100/month. My point was that even spending that amount on rent, and paying tax on a 100k salary, that you still have more left over at that point than someone on 50k a year will _gross_ and have to pay rent and taxes out of. The commenter I replied to said:
> many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
Not that he couldn't afford to buy a substantial house in SF.
So let me get this straight. In the "flyover country" where you DON'T get big city salaries, you're going to buy a $100k-$150k house because you don't make six figures. And then with all the leftover money that you don't have because you're not earning SF engineer salary, you're going to buy a car that costs anywhere from 25%-50% of your house?
I think the point is: his salary while not high by SF was high in nearly any other location in the US. In any other location, he and his family could live how they wanted. In any other location, have a $40,000 car instead of a $10,000 or less car is a perfectly reasonable. In any other location, eating out more than once a month would be perfectly reasonable. Having a expensive hobby racing cars is reasonable, just not in SF.
The point of the article wasn't that I am poor you should feel sad for me. The point was: look the Bay Area is so expensive that it is impossible to afford unless you are making an extremely high salary. A good salary isn't enough, a high salary isn't enough, it has to be extreme otherwise you will need to make life style sacrifices to live in the Bay Area.
$200k/yr may seem massive, but here in the bay area, it's not. $150k is about the base if you don't want to live at the very edge (so far out that it's a 1.5 hour commute to get to San Mateo, SF, San Jose, etc.).
I live in a 1800 sq ft townhouse on the peninsula worth $900,000, I'm on one income, and my head is just above water -- I can save money every paycheck, but not as much as you think. I make just shy of $200k.
I know you realize that the bay area is expensive -- I'm just not sure you realize how expensive it is.
That fact doesn't change what investors do -- maybe they don't want to invest in salaries. But forcing entrepreneurs into huge debt doesn't sound like a smart investment plan. No one's looking for a mansion; I just don't want to live in the ghetto because I had an idea.
You have to make a lot to 'EASILY' afford Bay Area housing... I currently live in Arizona and to live in an equivalent house like I live in here (nothing too special, just a 3 bed 1 story newer home) would be at least 2.5 to 3 times the cost (if living right in the hotspot areas of Silicon Valley. I'm honestly not even sure as it may be more, I pretty much gave up looking and resigned myself to living a bit further out because my salary wouldn't triple if I move there, as I'm sure it won't for most people.
300K buys you a Home or two in every low COL area. A 20$ uber ride in SF is 2$ here. Sure Electronics are about same, but all else is between 2 and 10 times cheaper
That makes it even more to the point; there are probably a dozen cities in the Bay Area where one could afford a house on a 200k household income without "scraping by".
San Jose, Santa Clara, Sunnyvale, Martinez, Antioch, Pittsburg, Hayward, Union City, Livermore, Milpitas, Morgan Hill, Gilroy, Richmond are all places you can get a house with a 200k salary in the Bay Area. There's probably a lot more, too. It's an indefensible statement.
$200k isn’t enough to buy anything in SF though. Also - I know a lot of people making $200k/yr and they spend relatively little.
Honestly - you sound really out of touch and like you know no one who makes $200k/yr in SF. Where would you put your boat if you even could afford one? Where would you put a camper? Do you think people at 200k in sf are renting houses often? Houses with space for boats and campers?!
Sounds a lot like someone who likes to bitch about avocado toast. I wish people like this didn’t even post on HN - because it’s clear they don’t live in SF and don’t have a clue.
Even in the Bay Area you can get a decent apartment or home mortgage for $40-70k a year. Taxes on $200k are gonna be less than $25k. Parking and gas are a few hundred at most, food might be as high as $1000 if you've got a big family or eat out a lot. Let's guess high and say another few thousand for utilities, phones, etc. Let's also say you've got some family health crises your insurance won't cover that run to $10k out of pocket.
That leaves you at least $90,000 free and clear. If you can't live comfortably and save for retirement with ninety grand a year, you either have some outstanding expenses (severe medical disability, etc.), or you're making some very bad decisions.
200k == about 11600 take home a month after taxes and insurance
Monthly
Rent : 3300 ( east bay 45 minute train ride into SF)
Utlities : 350
BART riding : 260
BART parking : 60-100
or Drive to SF and Car parking $500 ( instead of the 360 BART )
Groceries : 1400 ( 2 teenage boys eat )
Car payments + insurance : 800 ( 2 cars )
renters insurance : 120
Clothing : 300 ( teenagers outgrow stuff fast )
Cell phones : 300
6930 so far... no savings, vacations, entertainment or misc taken out
4670/4 = 1167 per person a month / 4 is 291 a week per person left for savings vacation misc and entertainment
1 family outing in the bay will run $300 to $ 500 easily
BTW to buy a house you typically had to come in with an offer 10-25% over ask and typically a full cash offer would get the house. Good luck buying a house with a mortgage ( the house across the street, in the east bay, went for 699k and it was only 900 sq ft )
200k is downright ordinary in the Bay Area, unfortunately. But, yeah, some places have lower typical down payments, but rents tend to also decline commensurately with home prices. Roughly speaking.
And, yes, of course I'm aware that a Model S is the same price no matter where you buy it, to a first approximation. The point is that housing is so expensive in the Bay Area that you can actually end up having less disposable income left over for your car than someone making $20k less than you on paper in a much cheaper city and in a state with lower (or no) income taxes (Washington, Texas, maybe a few others?). If you don't believe me, you need to just sit down with a calculator that will do taxes and everything, look up comparable rents, and do the math. You sound like you might be surprised.
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