Poor fish in rich pond seems like a heavy burden to bear

More than 20 years ago while living south of the San Francisco Bay Area I attempted to reduce my 2-1/2 hour commute by moving closer to my job, located in San Francisco’s financial district.

The best deal my then-wife and I could find was half of a run-down duplex in a run-down neighborhood in an ugly part of an ugly suburb. Yes, we were enamored.

The duplex featured almost no yard, was in desperate need of extensive renovation and was located in a neighborhood loaded with gang graffiti, lots of blacktop and cookie-cutter structures.

I couldn’t haven’t imagined a less appealing environment, especially given that it was still 30 miles from my office. Still, it was the least-expensive housing option we could find within an hour of the city.

The price in 1996 was $267,500. We literally decided within minutes of walking out of that duplex that we would have to move out of the Bay Area in order to buy a home.

Things, apparently, are even more expensive now.

Consider that a burned out home in San Jose is selling for $800,000. The realtor representing the seller said the asking price is reasonable given the housing market and its location.

Realtor Holly Bar tried to downplay the price by stating that it’s the lot she’s selling, not the house.

“They did leave it standing so you can remodel it versus tearing it down so you save a lot of money when you can leave a wall up and do a remodel versus a complete teardown,” she said.

The latest numbers in California’s Santa Clara County show the median price for a single-family home is $1.4 million, according to television station KTVU.

Barr said that less than 24 hours since posting the listing on Facebook 10 potential buyers have contacted her. She anticipates it will sell in a few days.

I’ve often wondered how individuals, even those with high-paying technology jobs, sleep at night having to make mortgage payments of such proportions. If there’s an industry downturn and you lose your job, it’s a lot harder to hold onto your home when your monthly housing payment is $3,000, $4,000 or $5,000.

The region does have nice weather, plenty of amenities and other opportunities that are hard to come by elsewhere. Still, when burned-out homes are selling for $800,000 and the median price of a single-family home is $1.4 million, one wonders if another housing bubble is about to make itself felt.

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12 thoughts on “Poor fish in rich pond seems like a heavy burden to bear

  1. My son-in-law and daughter live out there — I live in an upscale suburb in New Jersey and their garage would probably cost more than my house. The area is so expensive that experienced school-teachers have to rent rooms with affable multi-millionaires in return for nanny service…

  2. However do people get together that sort of money?

    When in London recently I stayed with a friend whose area of London has been ‘gentrified’. Houses – Edwardian three storey terraces – go for between one and one and a half million pounds and most of those who buy immediately start digging out underneath to install gyms, playrooms, etc. There can be no way that these houses are ‘worth’ that, but demand is so great that my friend has letters from estate agents nearly every week asking if she is interested in selling…which she is not. It was her parents’ house, she has lived there all her life and will hand it on to her son, who also has no interest in selling.

    I remember buying my first house in the seventies….you had to have been saving with the building society steadily for a couple of years and have a ten per cent deposit, not to speak of the problems of starting out in a notoriously uncertain profession for the young and being…speak not the name…a woman! Inflation helped out though…my income rose rapidly enough to make paying the mortgage easy and luckily I had paid forward before interest rates shot to 15%, which crippled any number of people.

    What are modern borrowers to do, used to incentives, low interest rates, etc., if interest rates rise? Even a small rise can be a catastrophe on a big mortgage.

    I think the London bubble of building expensive flats is about to burst…they can’t sell the damned things any more.

    • That would be my worry: Finally get up enough money to put down a downpayment, get stuck with a huge mortgage, and then the bubble bursts, which often means the area economy tanks, leaving you either out of work, or worried about being out of work. Not for me. And as much as I enjoy a visit to a big city, I have no desire to put up with big-city life every day.

  3. Well, they could move to Texas but then they would have to live in Texas, so there is that. A whole heap of California moved to the Seattle-Tacoma area a few years ago and they are still coming with the predictable affect on housing prices. The traffic has also turned in a paralyzed nightmare due to the rapid growth.

    • You would probably like it if you’ve got a bit of money. Otherwise, it can be a challenging environment, at least in the popular areas. The price of gas and traffic congestion are reasons enough to make you think twice about living there.

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