Reply to What $800k in Silicon Valley looks like

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[quote=Anonymous]I've lived in both places. The DMV is nowhere even close to anywhere in the Bay Area -SV/SF/East Bay. Townhouses are just as expensive as SFH on small lots. A small TH in Mountain View is easily 1.9 M. A 1.5M house in Bethesda would easily be 6M in Menlo. Mountain View, Palo Alto, Cupertino, Los Gatos, Saratoga are all more expensive than SF.

The problem with Silicon Valley is there isn't the far out growth and vertical high density housing that you see around DC. The traffic goes all over and you can't live in South Bay but work in East Bay or live in East Bay and commute to Menlo without a 2-3 hour commute each way -it is that crazy. The mountains cut off outer growth so the constant low inventory drives up the cost each year.

There is Morgan Hill and Gilroy but Morgan Hill's market is more like McLean not exactly cheap. You get more house for your money but you are still in the 900-1.2M range. East San Jose is cheaper but this area is downright dangerous with real gang activity.

In CA, your property tax is based on when you bought the house so very few retirees move out. The weather is so nice that there is no reason to go to a warmer climate. Our neighborhood has retiree firemen and teachers in small 1500 sq ft houses not remodeled since the 50s next to 2M slightly bigger but upgraded houses with tech folks. This keeps the inventory low.

Rents have gone crazy too so renting is almost as much as 1M mortgage. People see the double digit appreciation every year and see home ownership getting further and further away if they don't jump in. So basically, they stretch as far as they possibly can go and compromise on everything they can. Its not uncommon for extended family to give adult children large loans so they make a cash offer and then turn around and do a mortgage. In six months, you can easily see 6-10% equity appreciation. People take a lot of risks but since the appreciation is so high and the houses sell in a 1-2 days from hitting the market, they can easily get out if they need to do it. People tend to see their houses and the stock options from their company as retirement. Everyone in CA wants to go to the state schools so there is less worrying about saving for private colleges.

I don't think DC will ever get to this level of crazy. There just isn't the cash and wealth to sustain 2M as the norm across the region. Rents are not crazy and the commute patterns are predictable. There is still lots of space to develop. Feel good about living in the DMV! Its not as cheap as Kansas but it is nowhere near as crazy as Silicon Valley. [/quote]

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