November 12, 2009

palo alto, median household income

It’s search engine Thursday.

Recently someone found this site by searching for: palo alto, median household income

This is actually a very tricky question.

According to City Data, the median income in Palo Alto in 2007 was $102,565.

According to Zillow, the median income in Palo Alto is $90,377.

According to the Bay Area Census, the median family income in Palo Alto in the last 12 months is $153,197 and the median household income in Palo Alto is $119,046.

Without a doubt, $153,197 is the closest number to the truth.

However, even then this is skewed because it includes all the people who don’t need to work to live in Palo Alto. For example, the neighbor of this house for sale who pays just $1370 a year in property tax. These people, who incidentally may just as likely be 21 years old, as they are 81 years old (because the low tax rate can be passed to kin), need to be discounted since let’s face it, they have no income for all intents and purposes.

Unfortunately, I have yet to find a chart that shows the distribution of income in Palo Alto. Without that, one can only assume.

So, if you exclude the income free Prop-13 enhanced people in Palo Alto, my magical calculation reveals that the median household income is close to $300,000.

Using a health Californian multiple of spending 5x (because it’s risk free) of your income on housing, that means that a median Palo Alto family can afford a $1.5 million dollar house.

And wouldn’t you know it? That’s just about the same as the median listing price according to Redfin.

Question closed.

Updated: Thanks to Burbed reader SanMatean for this chart:

Cha-chingggggggggg!

Comments (80) -- Posted by: burbed @ 5:22 am

80 Responses to “palo alto, median household income”

  1. SanMatean Says:

    You can find an estimate of the 2008 distribution of incomes in Palo Alto from the US Census American Community Survey here:

    http://factfinder.census.gov/servlet/ADPTable?_bm=y&-geo_id=16000US0655282&-qr_name=ACS_2008_3YR_G00_DP3YR3&-context=adp&-ds_name=&-tree_id=3308&-_lang=en&-redoLog=false&-format=

    42% of Palo Alto households made less than 100K in 2008.
    29% of Palo Alto households made more than 200K.
    Median household income was $126741 +/- $6351.

    27% of Palo Alto families made less than 100K in 2008.
    39.6% of Palo Alto families made for than 200K.
    Median family income was $166K +/- $9871.

    Family income only takes households with two or more persons related through blood, marriage or adoption into account. I’d say its a reasonable assumption that most recent buyers fit the definition of family better than the definition of household.

    Other interesting facts from the 2008 ACS:
    29% of households have a person of 65 years of age or older.
    31% of Palo Alto residents were born outside the US.

    50% of Palo Alto residents have moved to their current residence since 2000.

    35% of homes are mortgage free,

    The median monthly housing costs for mortgaged owners was $3,783.

    37% of mortgaged owners pay 30%+ of their income on housing. 28% pay 35%+.

    36% of renters pay more than 30% of their income on rent.

  2. SanMatean Says:

    And here’s your chart:

    http://img514.imageshack.us/img514/1127/picture2u.jpg

  3. DreamT Says:

    This will definitely makes burbed’s day:
    http://www.nbcbayarea.com/news/tech/Katie-Couric-Names-Google-Founders-Medias-Most-Powerful-jw-69910082.html
    if only the very last line of the article.

  4. BuyersAreIdiots Says:

    Hey, here is the latest from the Merc on the housing situation in Santa Clara county:

    http://www.mercurynews.com/bay-area-news/ci_13773049

    Foreclosure sales are up but affordability is down.

    We TOLD you to buy now before its too late! They aren’t making anymore land you know! ;-)

  5. Pralay Says:

    So, if you exclude the income free Prop-13 enhanced people in Palo Alto, my magical calculation reveals that the median household income is close to $300,000.
    ——

    I should mention about those “transient guests” who live at low-income apartments on Alma St. They are not “real residents” of Real Bay Area. Let’s exclude them too. That makes median household income of Palo Alto close to $400,000.

    And don’t forget those “real residents” of Palo Alto who have “real reasons” for working fulltime – earning frequent flyer miles. If you convert those miles into fair marker value, the median income of Palo Alto goes up to $500,000.

  6. burbed Says:

    Sweet! The article has a reference to the Pope, who loves marble columns.

    Sorry Keyboard Cat… Merc News FTW!

  7. steve Says:

    san matean, excellent link! and, a great way to understand the RBA. let’s look at los altos, frankly a fringe RBA community these days, but well-sized to make my point:

    84.9% owner occupied
    84.7% 1-unit detached
    82.8% lived there since 2004 or earlier
    87.2% of units valued at $1M or more
    32.2% of units have no mortgage
    59.0% of adults in labor force
    40.6% of households make $200K or more
    30.0% retired (receiving social security)

  8. Alex Says:

    Damn. No wonder I can’t afford to buy a place. Everyone in this valley makes a sh*tload.

  9. meep Says:

    just wondering.is redwood city part of the rba.the median family income is only ~$82,000 or pacifica median household income ~$102,00 or san francisco median family incoe ~$87,000. if every family in the rba consits of 2 tech workers making $100,000+ each something is not adding up.

  10. Real Estater Says:

    What’s up with the infatuation with Palo Alto? We got a number of people here living in Santa Clara. They might be feeling left out.

  11. VCGuy Says:

    “Damn. No wonder I can’t afford to buy a place. Everyone in this valley makes a sh*tload.”

    As someone who actually does make these kinds of numbers, I’d like to share two things: 1) most of the people that I know make less than I do and 2) most of them spend around 45% (or more) of their income on housing.

    Here in the bay area, people are all together too willing to commit to very high DTI on the basis that “they deserve it,” “their kids need the school system,” or “its a great investment.”

    When you see couples making $400k a year and stretching to afford their own house, that should be a hint. If you buy a house from them and you make a similar amount, they have forced you to commit to the DTI that they (stupidly) thought was a good idea.

  12. zanon Says:

    VCGuy is right. My income is up there too, and I rent for $2K/mo. You only have to stretch if you decide to stretch.

  13. SanMatean Says:

    meep- RBA is an ephemeral beast with wildly expanding and contracting boundaries. It defies definition. It’s up and down and around; a carousel of thought that embraces the good and blocks the bad. It’s your happy place. Go to your happy place Happy. Go to your happy place.

  14. DreamT Says:

    #11 – “they have forced you”
    what a strange turn of phrase. You really hold the seller responsible for the buyer’s DTI? Well after all if you can’t blame the lender nor your agent…

  15. DreamT Says:

    I can’t get over #11 :) how does one make “these kinds of numbers”? How many kinds of income ranges are there these days, VC guy? do you get paid in transcendental currency?

  16. SanMatean Says:

    I know many couples in the 400K+ club in the bay area. Most consist of two working professionals in the fields of sub-specialty medicine, corporate legal services, or corporate finance. Making 200K+ in these kinds of jobs is not a huge feat. DreamT- to get transcendental money you need to go to a first-rate graduate school (medical, law, business) and excel.

    Either that or marry an heiress to an American beer fortune. That comes with its costs…

  17. DreamT Says:

    #16 – my post was a Math pun only.. I do know how one can reach specific income ranges :)

  18. SanMatean Says:

    Ah. Apologies.

  19. DreamT Says:

    SanMatean – No, sorry for wasting your time.
    Something we wondered yesterday – if you’re say an endodentist or some other medical specialty, what % of the profession pursued the career (RealEstater: carrier) for another reason than money, and how does one feel after a couple of years on the job, every morning? (I don’t have close acquaintances I’d feel comfortable asking :) )

  20. SanMatean Says:

    Good question DreamT.

    As one periodontist I know put it- it’s not about the money. It’s about a whole sh*tload of money.

    Most of the older physicians I know are pretty bored with their jobs. Many lament the service-industry mechanic-like feel of their jobs. Despite this, all appear to be satisfied with the prestige and income that their jobs provide.

  21. Real Estater Says:

    Looks like we’re all making pretty good numbers. Alex, you’re screwed.

  22. burbed Says:

    Damn. No wonder I can’t afford to buy a place. Everyone in this valley makes a sh*tload.

    Come on… you can afford this:

    http://www.burbed.com/2009/11/05/live-in-san-jose-for-just-700-a-month/

    Sale pending. Better act fast.

  23. anon Says:

    Yes, yes – we’ve been over this. Everyone can afford something. The question is whether or not they can afford what they are ‘entitled to.’

  24. CB Says:

    I want to see what a two income family of four in the RBA earning 400k/yr gets over a two income family making 150k/year in select non-RBA locations?

    (Amounts are yearly)

    For the 400k family, two incomes, two kids, 1.6 M home, API 900+, two luxury vehicles

    Mortgage (3.5x income @ 6.25%) 103,400
    Property Tax/Ins 22,000
    Federal Tax (est from irs website) 89,000
    State tax (9.6%) 38,400
    Misc deductions (SS, etc 2%) 8,000
    Retirement (10%) 40,000
    Daycare (only the best for Madison and Taylor) 30,000
    Car lease (500/mo x2) 12,000

    Net $57,200

    For the 150k family, two incomes, two kids, 600K home, API 890+, two vehicles

    Mortgage (3.5x income @ 5.25%) 34,800
    Property Tax/Ins 7,300
    Federal Tax (est from irs website) 12,200
    State tax (6.5% w/deductions) 9,500
    Misc deductions (SS, etc 3%) 4,500
    Retirement (10%) 15,000
    Daycare (home daycare) 18,000
    Car payment (average of buying new every 5 yrs) 4,800

    Net $43,900

    This was a quick workup, things are left out like student loan service, insurance, etc. But you’d think the top echelon would have more to speak for than just $13,000 and a bit of status over family with solid earnings. It’s pretty funny what digging for that RBA status does to people’s financial situation.

  25. anon Says:

    It certainly is.

  26. zanon Says:

    Most of the difference comes from house and taxes.

  27. SanMatean Says:

    There are so many apples and oranges in that comparison it’s like a fruit salad.

    An extra 25K saved per year for retirement seems like a pretty significant difference to me. After 25 years with an annual return of 5% that’s a difference of nearly $1.2M. That’s the differnce between a long comfortable retirement and one where you’re working at Walmart part time to afford your daily Medicare co-pay.

    You’re also omitting a huge additional cost: the cost of college savings. Throw in an extra 20K per year if you want Madison and Taylor to emerge debt-free from a private undergrad.

  28. CB Says:

    Like I said, it’s not a perfect comparison (I’m not even claiming it to be a good one)

    I agree, the quality of retirement has the potential to be far better than the 150k family. But who knows if the 400k family doesn’t end up refinancing that property to the moon in order to keep up with Hu’s and Shah’s. Also, a quality of life needs to be maintained in retirement. Who do you think is better prepared to make a dollar stretch? Who do you think needs a little extra padding.

    College savings is another point that counts against the lower earners, but their net income also allows for hefty college savings. And, that expense might be countered with the benefit of not being strapped themselves with 100K+ in Law or Med school debt, as would the high earners.

    My point is NOT that any family earning 150k is just as well off as a family making 400k. My point is the 400k-earner RBA lifestyle is one where there is an illusion of wealth. And those who earn that much and decide to shackle themselves to that level of obligation are profound morons, financially speaking.

  29. Steve Says:

    I think a lot of RBA families earning $400K in salary are not going to have a $1.4 million mortgage. At that income level, I’m sure a lot of extra money will come from stock and other investments. The mortgage will be a lot smaller or there may not be a mortgage.

  30. DreamT Says:

    CB – I agree with your ultimate conclusion but the demonstration does have many holes (how can you shove food under Net while considering car lease as an uncompromisable cost of living?)
    I would apply the conclusion not just to the $400k dual-earner but also on the $150k dual-earner, which IMO is easily three times what you need to survive in the valley.
    Finally, wealth is best described as assets not as cash flow. The latter is merely wealth potential, if well managed. If assets (minus debt) get accumulated over time, wealth is not an illusion even if it is not immediately tasted.

  31. SanMatean Says:

    Fair points CB. In sheer monetary terms, most RBA residents probably aren’t as rich as one might assume

    But at the end of the day, can you really put a monetary value on proximity to Fry’s or El Camino Real? Priceless!

  32. steve Says:

    (upper-case) Steve, check the census stats above. I suspect that mortages are more closely correlated to date of purchase than income levels. and, while there are some, I would doubt that the majority of 1.4M sales are 50%+ cash in the RBA. during the bubble, somebody was taking out jumbo mortgages, and, even in lax lending times, not just anyone could qualify for $1M++ loans.

  33. Steve Says:

    steve – I agree, mortgages are more correlated to when a home was purchased. I would say that someone earning $400K today, probably has owned a home for some time and probably was around during dotcom and the stock market boom. So they rode the wave quite a bit already.

  34. meep Says:

    hey.there must be oral surgeon, financal type and M.D.s couples living on the east and north bay.the fools! pocketing that extra cash instead of moving to the much more prestigous RBA with it’s higher housing prices.what are they thinking? an extra $100,000 in disposable income? how silly.

  35. SanMatean Says:

    Yes, you could live more inexpensively elsewhere, but you’d have to work with boring, uncultured, mouth-breathing patients. In the RBA you get to treat the rock-stars of technology and innovation! You don’t think that you’d get to treat Steve Jobs if you lived in Tennessee do you?

    On that note, they don’t have Apple stores in the fly-over do they? Or good sushi. Or taiko festivals. Sure, they might have some mean grits, but really, how does that compare to some fine polenta?

  36. steve Says:

    SanMatean, I assume the choice of Steve Jobs was intentional given the high level of humor in the post overall, but just in case:

    http://www.bloomberg.com/apps/news?pid=20601103&sid=aOMqeOkIIEe4

  37. SanMatean Says:

    mon dieu ! Steve Jobs a été traité au Tennessee ! À ce qu’est ce monde venant ! pourquoi risquerait-il sa vie avec de tels heathens ? (langue fermement dans la joue)

  38. DreamT Says:

    qui, Stéphane Travaux?! On l’a maltraité?

  39. Alex Says:

    Real Estater, you’re making good numbers huh? Doing what? Real estate whore?

  40. bob Says:

    I just spent a week and a half in TN. Its good to get away from the silliness of the Bay Area and see how the rest of the world lives.

    It still amazes me that even in Nashville,where more famous people live than in SV, if you want a NICE house in a historic neighborhood, even on a bit of land that you can get one for $250,000 or less.

    The CMA awards were happening when I was there so much of the downtown was shut down and there were lots of record and industry execs milling about. I had a few beers at a local bar and started talking to this one guy. He was a lawyer for a number of artists ( he didn’t say who) But anyway, this guy made something like $300,000 a year. We were comparing notes as I told him my situation back in the BA. Let’s just say that compared to how I live and what I could afford here, he lives like outright royalty in Nashville.

    Kind of goes back to some of my previous thoughts, which is that a lot of people in the BA might make a lot of money on paper, but pretty much live like lower middle income residents anywhere else and have somehow convinced themselves that living in Wally Beave’s house gives them special status.

  41. SiO2 Says:

    So, Bob, could I ask, if Nashville is so much better, why not move there? It seems like a pretty attainable dream.
    Personally, if I lived in a place that was expensive and I didn’t like it, I’d move. Particularly if I knew exactly which place I liked better!

  42. Top Dog Says:

    Bob: The person you talked to was a successful lawyer making $300,000 a year. His income would likely be higher in the Bay Area. I don’t think he would have any of your problems if he were living in the Bay Area.

  43. steve Says:

    I again ask, which will happen first:

    1) bob actually leaves
    2) RE buys his investment property
    3) snowballs thrive in hell

    pralay, have a physics link for me? because, as strange as it seems give all the talk surrounding 1 and 2, the smart money is on 3.

  44. Herve Estater Says:

    Country Music Association Awards, Country Music Marathon, Country Music Hall of Fame, Country Music Television… Attainable dream indeed…

    Want a taste of Nashville? Listen to 95.7 The Wolf.

  45. bob Says:

    Bob: The person you talked to was a successful lawyer making $300,000 a year. His income would likely be higher in the Bay Area. I don’t think he would have any of your problems if he were living in the Bay Area.

    But even though his income might be higher in the BA, he would still not live as well as he does in Nashville because the ratio compared from here to there in regards to how far your money goes is 4:1 or more.

    So, Bob, could I ask, if Nashville is so much better, why not move there? It seems like a pretty attainable dream.
    Personally, if I lived in a place that was expensive and I didn’t like it, I’d move. Particularly if I knew exactly which place I liked better!

    As mentioned, I’m looking to do exactly that. I’m talking to a number of companies out of state. The problem is that less people are hiring now due to the recession- especially if you don’t live in that area. Its actually a real challenge working at a job full time and applying to jobs out of state. Additionally, the logistics are also a challenge. All of the cars, stuff, and so on will also have to be moved. So yes- I’m working on it. But I’m also cautious and I have time to choose the appropriate company. In the meantime I’ll just save more money so I’ll have more for the house and retirement.

  46. Pralay Says:

    pralay, have a physics link for me? because, as strange as it seems give all the talk surrounding 1 and 2, the smart money is on 3.
    —–

    Of course smart money is on #3. Just read this: Is Hell Exothermic or Endothermic?

    This gives two possibilities.

    1. If Hell is expanding at a slower rate than the rate at which souls enter Hell, then the temperature and pressure in Hell will increase until all Hell breaks loose.
    2. Of course, if Hell is expanding at a rate faster than the increase of souls in Hell, then the temperature and pressure will drop until Hell freezes over.

    We know souls are entering Hell in slower rate. First of all, life expectancy increased dramatically in last century. Secondly, more souls are going to Heaven and less in Hell – thanks to effective guidance from Pat Robertson and Jerry Falwell (except Jerry himself couldn’t go to Heaven). So #1 is ruled out. Heaven is expanding in faster rate than souls entering. Given the global warming, pretty soon Hell is the only place you could make snowballs (and frozen yogurt). Smart money is right there. Just get the Pulse of The Hell.

  47. steve Says:

    ah, pralay at his best!

  48. Alex Says:

    I can’t afford to buy a house, unlike the rich RealEstater.

    Still looking for a nice 1-BR apartment in Mountain View within a few blocks of Castro. Recently renovated and hardwood floors would be nice.

    Anyone? Bueller?

  49. zanon Says:

    Steve 43: You crack me up!

    Bob: I don’t know why anyone who isn’t in tech lives in RBA. You can do much better as doctor/lawyer in some flyover place

  50. nomadic Says:

    zanon – there are some who are tied to the RBA because of family, either because a spouse brought them or because they were born here (and family ties keep them here). Otherwise, you’re right – why stay when you can do better elsewhere?

  51. sv_newbie Says:

    actually BA is not that expensive. let me explain.
    let’s not take a $1M house in old Palo Alto – that place is unique so don’t expect luxury for that kind of money there. OK.

    Try Fremont – mission san jose area. $1M will buy you a royal house. Great school. 20mns away from RRRBA – it’s a great place to compare.

    Mortgage on 800k = $4400/month

    Take the $300k house in TN.
    Mortgage = $1318

    yearly premium = $37k

    you got to pay some premium for weather and stuff, great schools (yes, TN cannot be compared with a top notch school here in BA), and ability to find job in one of 1000 companies around here.

    how much premium? certainly $10k doesnt sound that bad.

    So, your real premium = $27k
    considering taxes etc it’s more like $30k pre-tax money.

    i bet for *most* people working in RBA, income is 20-30k higher here compared to being somewhere in midwest.

    so while BA is expensive but it’s not that much.
    people make mistake in calculation when they start imagining someone with $75k salary buying a $5M house in Ahterton.

  52. Alex Says:

    How can you guys afford a $4400 monthly mortgage payment huh? You eat ramen noodles day in day out?

  53. steve Says:

    zanon, thanks, but I was merely the setup man. pralay closed in style, as he did last time I posed the same question.

    and, on reasons to stay, I’ve been trying to find an artful way to ask this for a while, but don’t y’all have friends? almost everyone I went to college with ended up settling out here (if not immediately then after grad school), and, for that reason alone, I wouldn’t consider moving.

  54. nomadic Says:

    no, steve. no friends. not one.

    :-P

    Actually, only the ones I made after moving here.

  55. bob Says:

    SV Newbie,
    I’m guessing you’ve never even been to TN so you don’t really know what you’re talking about.

    For starters, a $300,000 home in Nashville is a super upper-end mansion in the best neighborhood with all the trimmings. Try more like $150,000, which gets you a typical 3 bedroom house like this one:

    http://nashville.craigslist.org/reb/1468250905.html

    So the payments on a 30 year fixed would be more like $850 a month, approximately 4.5 times cheaper than the 800k gem you mentioned in Fremont.

    My Mother teaches in a school district in TN. The state was ranked 16th overall in the nation in regards to its schools. California: 47th.Most schools in TN are just as good, if not better than those in Palo Alto. Its just that Palo Alto schools look “good” compared to the rest of the dismal schools in the Bay Area that barely function.

    My old middle school got two new additions, doubling in size. Every classroom now has a full compliment if laptops and students at the high schools can now take college level classes- some that actually count towards college credits. No, these aren’t private schools or public schools with rich parents paying the tab. Its just a typical public school getting state funding.

    Lastly, I was there just last week. It was sunny and pushing 75 degrees, and that’s in mid-November.

    I’m not sure where you get that a million dollar house anywhere is a great deal, but I wouldn’t mind getting ahold of whatever you’re smoking.

  56. SiO2 Says:

    Bob, btw, I am not trying to be snarky or anything like that. Just curious.
    It seems to me that if you’ve been saving, you could just move to TN and rent while looking for a job. It’s obviously better to have the company pay for the move, but it might still be worth it.

    I don’t think the cost of living in TN is 25% of here. House prices, sure, but other stuff is similar. Food, gas, insurance, maybe slightly higher here. Fresh vegetables, probably less here. Utilities, probably more in TN due to the climate. Plus the cost of heating/cooling your 5k sq ft home! It may be 50% or 40% cheaper, not 75% less.

  57. SiO2 Says:

    A few other things – college level courses are not unusual in HS nowadays. Most HS in Santa Clara Co have at least 8 AP classes.

    And regarding “why live in BA”. It depends on what you want too. I’m not that interested in a 5000 ft house. But I do value the year round good weather. TN is hardly awful, but summers are humid, and winters are colder than here. (perhaps not today, but let’s check in Feb). I also enjoy that I can meet and work with people from around the world here. Some people like that, some don’t, some don’t care.

    I am biased as I work in tech, and it’s extremely unlikely I could get a job anywhere close to my current job in TN. So if I were a doc or a lawyer, and income would be similar here or elsewhere, the tradeoffs could definitely be different.

    That house in the listing looks nice. I clicked on the google map link, and the lister had misspelled the name of the town, so Google could not find it. Hmm..

  58. steve Says:

    SiO2, try the yahoo maps link. the town is 20 miles outside of nashville.

  59. nomadic Says:

    bob, while you are 100% correct that you can get a LOT more house for the money in TN, a “super upper-end mansion in the best neighborhood with all the trimmings” is more like $4.5M:

    http://nashville.craigslist.org/reb/1472488868.html

    Or maybe this is closer to what you had in mind ($585,000):

    http://nashville.craigslist.org/reo/1472995511.html

    Just saying that you can preach all you want, but you won’t find many converts here. When I moved here I found there was about a 3x difference in price between comparable houses. I’ve adjusted, based on the big picture.

  60. Herve Estater Says:

    > So the payments on a 30 year fixed would be more like $850 a month.

    While I applaud your math, do people really take on a 30-year mortgage for $150K in Tennessee?

  61. bob Says:

    Just saying that you can preach all you want, but you won’t find many converts here. When I moved here I found there was about a 3x difference in price between comparable houses. I’ve adjusted, based on the big picture.

    Frankly, there’s already zillions of Californians flooding my home state along with the rest of the Southeast. So if I’m dissuading you from moving there, then I’m quite glad.They certainly don’t need anymore Californians. That’s for sure.

    $300,000 is in the upper price level for the area. I know this because I lived there and my parents do still. Sure- there are multi-million dollar houses as well. Its the 2nd largest music producing city behind LA, which given that its a fraction of the size of LA is quite an accomplishment. So of course there will be some expensive homes for those that work in the biz. But the median income in the greater Nashville area is around $198,000, which is significantly cheaper than anything close to the Bay Area.

    And regarding “why live in BA”. It depends on what you want too. I’m not that interested in a 5000 ft house. But I do value the year round good weather. TN is hardly awful, but summers are humid, and winters are colder than here. (perhaps not today, but let’s check in Feb). I also enjoy that I can meet and work with people from around the world here. Some people like that, some don’t, some don’t care.

    Who said anything about a 5,000 sq foot house? I’d never buy anything that large. It also isn’t just about a house either. Its about not having to deal with millions of people all the time. As far as “people of the world”, well that’s sort of a generic statement. Nashville is actually pretty ethnically diverse. Last check its composition was as follows:

    66.99% White,
    25.92% African American,
    0.29% Native American,
    2.33% Asian,
    0.07% Pacific Islander,
    2.42% from other races
    1.97% from two or more races

    Oh- it also has the largest Kurdish population in the country.

    In fact, Nashville’s foreign-born population has more than tripled in size since just 2000, making it one of the fastest growing ethnic populations in the country. So much for thinking that you’d not meet anyone from other countries…

    But… you do have something right, which is that I can’t deny that SF probably has better weather. But when you have to pay 4 and 5 times the amount just to live there, I sort of fail to see how that sunshine becomes worth the price tag. Then again- there are many like you who think so. The weather in TN isn’t all that awful. If anything you can have fairly diverse weather. I can remember being in shorts for Christmas one year. Typically you get around 1-2 months of actual cold weather ( 20’s at night, 40’s during the day) Of the hot weather, that typically happens in July and August, when temps can hit the 90’s on average. Figure about 8 months out of the year are pretty decent. Not bad.

    Anyhow, like I said- there have already been scads and scads of Californians who have moved out to TN, TX, NC, and other states because they can have a better life there. Its not like they need anymore of them.

  62. nomadic Says:

    #60 – of course. The size of the mortgage is in relation to typical income. :-)

    My first mortgage was $110,400. Of course with interest rates at almost 10% the payment was just shy of $1,000/month. It was a lot for someone who had just graduated college.

  63. bob Says:

    Uh-Oh!
    A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.

    Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.

    At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record-high for the ninth straight quarter.

    The Mortgage Bankers Association’s report Thursday suggests the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages…
    http://www.cbsnews.com/stories/2009/11/19/business/main5710382.shtml?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CBSNewsTheEarlyShowCelebSpot+(CBS+News%3A+The+Early+Show%3A+Celeb+Spot)

  64. nomadic Says:

    You left out the staggering statistic, bob! 14.4% of mortgages are late or in foreclosure… nationwide!

  65. sv_newbie Says:

    Bob,

    TN sounds like great place to be. However, there is just one mistake in your calculation. You are assuming that in order to buy a 4x expensive house, you need 4x income as well. That’s not true. You only need to earn extra enough to pay your extra mortgage.

    Millions living in BA are doing this calculation implicitly or explicitly. Most of them are not migrating to TN precisely because their extra income justifies their extra mortgage.

    In fact, your instincts know better – that’s why they have prevented you from migrating from BA so far.

    Again I am not saying BA is more expensive than it should be. But, it’s certainly not as expensive as you purport it to be.

  66. bob Says:

    Nomadic,
    The states with the highest number of foreclosures related to the above mentioned story are again- Nevada, California, Arizona, and Florida.

    SV-Newbie,
    Your math is still puzzling to me. You previously mentioned a $4,400 a month mortgage for a typical 800k house in Fremont. So you’d better damned will be making something along the lines of $300,000 a year. That compared to making 70k to buy the same sized home in TN. I’m going to assume that you must have come from some large metro on the east coast ( Shall I guess its NYC or Washington DC?) Thus your math is all adjusted for bubble housing prices. Sorry, but incomes here do not in any way come remotely close to justifying paying the kinds of prices on houses here. No freakin’ way.

    Again- I think paying 600,000, 800,000, a million bucks for a suburban home is outright crazy and loonie. Nobody is ever going to convince me that its a swell idea to pay that kind of money.

    Oh- and one more thing- Millions of people from California are in fact moving away. High prices makes up the bulk of those decisions. As mentioned, the second I get a job offer outside the state, I’m leaving it.

  67. steve Says:

    bob, I suspect there are few folks who track their money more closely that you, so do you really mean this:

    So you’d better damned will be making something along the lines of $300,000 a year.

    is that really what you think you would have to make to cover a 4400/mo mortgage payment (and with taxes, etc assume at 5600/mo total housing cost). what do you think you would need to do with the other $8500? assume, worst case, after pulling out your 15.5K in 401K money, you are paying 40% of what is left in fed and state taxes. (note, the $50K in interest payments really do help here despite the phase-out.) that’s still over $14K headed home each month.

  68. nomadic Says:

    Nomadic,
    The states with the highest number of foreclosures related to the above mentioned story are again- Nevada, California, Arizona, and Florida.

    Of course. Your point? Maybe that it means the rate is even worse in CA? You’d be correct, particularly if you look at SoCal in particular.

  69. nomadic Says:

    steve – wasn’t the rule of thumb that someone could afford 1/3 of their gross income for shelter? That would imply that an income of only $4400x3x12 = $158,400 is needed. The payment is way more than I would ever be comfortable with on that salary, but I thought that’s what has been used.

  70. steve Says:

    nomadic, yes. and, without reserves, I agree. there was also a rule about sales prices and income; however, that has been shattered by low interest rates.

  71. bob Says:

    is that really what you think you would have to make to cover a 4400/mo mortgage payment (and with taxes, etc assume at 5600/mo total housing cost). what do you think you would need to do with the other $8500?

    I say $300,000 because my wife and I make a fairly decent income. Its less than $300,000, but still up there. All I can say is that despite living frugal, financially careful lives, what we’re leftover with after taxes and living expenses is indeed enough to buy the sample $800,000 home. But if either one of us lost our jobs, those payments would very rapidly outpace our savings. Like I said- we do fairly well financially. But when you look at how much you would need to buy a house in much of the area, the reality is shocking: We’d be doing like many people we know who bought and instantly turned into debt slaves, with the bulk of their incomes being poured into their houses.

    I think its been pounded into the average Bay Area resident’s head that its perfectly OK to spend a high percentage of their incomes on their houses. The opposite should be true and no amount of sunshine, “foreigners”, or whatever makes it ok. Money is money. I for one do not believe in the Bay Area house as being anything other than a financial liability- which is what all houses in reality are.

  72. bob Says:

    Of course. Your point? Maybe that it means the rate is even worse in CA? You’d be correct, particularly if you look at SoCal in particular.

    Actually, the highest number of foreclosures of homeowners with conventional loans and good credit is in the Bay Area. The Bay Area has anywhere from a 11-18% unemployment rate. Sooner or later that catches up in the form of mounting foreclosures- especially in higher priced areas where buyers took on more risk.

  73. nomadic Says:

    argh. I’m the particular master of redundancy today. ;-)

    bob – got a source for that statistic? I’d be interested to see more on that.

  74. Herve Estater Says:

    Another great thing about Tennessee: obesity and diabetes.

    In the Appalachia region that includes Kentucky, Tennessee and West Virginia, 81 percent of counties have high rates of diabetes and obesity.

  75. Herve Estater Says:

    Tennessee tastes good to me:

    Bell Buckle Country Store: Captain Rodney’s Cheese Bake

    Ingredients:
    1/2 cup mayonnaise
    8 ounce package of cream cheese
    1 cup Grated Sharp Cheddar cheese
    2 Green onions (Chopped)
    6 Butter Crackers (Crushed)
    8 Slices of bacon (Cooked and Crumbled)
    1/2 cup of any Captain Rodney’s Glaze

    Directions:
    Mix mayonnaise, cream cheese, cheddar and onions in greased quiche pan. Top with crackers and bake at 350 degrees for 15 minutes. Top with bacon and any Captain Rodney’s Pepper Glaze. Serve with crackers.

  76. nomadic Says:

    wow, Herve Estater, that looks damn good! Just needs some artichoke hearts in there.

    I can already feel my arteries hardening. :-P

  77. Herve Estater Says:

    > Just needs some artichoke hearts in there.

    I am told that you can also replace the green onions with lard.

  78. burbed Says:

    Millions living in BA are doing this calculation implicitly or explicitly. Most of them are not migrating to TN precisely because their extra income justifies their extra mortgage.

    FWIW, I find that many people in the Bay Area do not have a good sense on how much they are spending to live here (housing, transport, tax, groceries).

    Actually, many are immigrants who move straight here, so they assume that all of America is like this – expensive, crowded, wide school quality variability. Or they’re native Californians who have never left this fine state.

  79. burbed Says:

    and, on reasons to stay, I’ve been trying to find an artful way to ask this for a while, but don’t y’all have friends

    On the flip side, how many Bay Area people have friends who are NOT somehow involved in tech? :)

  80. Pralay Says:

    Or they’re native Californians who have never left this fine state.
    —–

    They don’t go/travel outside California because they can’t spell name of the places outside California correctly. If they try to go/travel outside California, you would read lot of similar stories like this German guy who wanted to go Sydney, Australia but ended up at Sidney, Montana.

    Australia-bound tourist ends up in Montana


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