“You can’t buy a place for…”

“…less than $700K in the Bay Area.”

That’s what a caller said on Car Talk this morning–an airline pilot who lives in Alaska, has been transferred to fly out of San Francisco, and has decided to live in a van rather than trying to buy or rent a place…because, you know, “you can’t buy a place in the Bay Area for less than $700,000.”

To which my wife and I both impolitely responded, “Bullshit.”

Since the pilot plans to spend most of her free time back in Alaska, there’s no plausible reason for her to buy or rent in San Francisco itself: SF is a long way from SFO.

Housing prices around SFO ain’t cheap–but they’re nowhere near as crazy as she seems to imply. In practice, of course, for this kind of reassignment, she should rent, not buy–and rentals in San Bruno (adjacent to SFO) or South San Francisco (nearby, but maybe a 15 minute commute instead of 10 minutes) run as low as $950/month for a house, much less an apartment–I saw $985/month for a 1,330 square foot 3&1 house on Zillow. That may not be peanuts, but it’s not OMG HOW CAN ANYBODY AFFORD THIS! either.

As for houses, here’s what I see in San Bruno just looking casually:

$299K for a 2&1. $339K-$354K for other 2&1s. $410K for a 1,000 sq.ft. 3&1. $495K for what looks like a really nice 1,544 sq.ft. 3&2–that’s substantially larger than the house we lived in for the last 11 years…

In South San Francisco, I see $395K for a 1,500 sq. ft. house, $568K for a 2,220 4&3–that’s a pretty big house.

Those are just places that would represent really easy commutes. The “Bay Area” covers a lot more ground, including Oakland and Richmond, where $700K would go a LONG way. Neither one is Detroit-cheap, but neither one is all that expensive.

No real significance here. I’ve been amused by claims that everything costs a fortune out here, not just real estate–one post I saw claimed that even milk was super-expensive. Well, the daily price for gallon jugs of milk at our neighborhood market is $2.78. Same price at Safeway; your choice of whole, 2%, or skim. That’s the gallon price. Is it really that much cheaper where you live? (Ordinary bread? Frequently on sale at $0.80/loaf for Safeway 1.5lb. loaf. Is that super high?)

5 Responses to ““You can’t buy a place for…””

  1. Blake says:

    I still don’t understand how anyone can live there. $100/sqft is high around here.

  2. walt says:

    Well, there are places for under $100/sqft, in Daly City at least (which is typically cheaper than either South San Francisco or San Bruno, and still closer than SF itself)–but they’re either foreclosures or manufactured homes/mobile homes. (E.g., here’s one for $114,000, a 1,248-sqft 2&2, pretty clearly a manufactured home.)

    It works both ways. As a wimpy native Californian, I don’t see how anyone can live through the winters in the Northeast & Midwest… and yet, you do. The answer here is: (a) you move further out–e.g., my wife’s niece bought a good-size recently-built house for $175K in Oakdale, which is about 60 miles east, (b) you have two salaries, (c) precious few of us have “vacation homes” (or need them), (d) or some other mechanism. Fact is, all of the cities I’ve mentioned are in the West Bay, an unusually expensive part of California.

    My main point was that “You can’t buy anything for less than $700,000” is sheer nonsense: It overstates the situation even in the more expensive areas. Not the *most* expensive areas… It’s like saying that you can’t buy a decent house in New York for less than $1 million, which might be true for Midtown Manhattan but is absurd for, say, Potsdam.

  3. Milk here – if you don’t go to Costco, on a bad week? $3.49/gallon for skim. It varies a lot by week.
    Houses are pretty expensive, too. Can get 1100 square feet on a quarter acre lot near me for $350k.

  4. rcn says:

    In response to Blake, it’s true that cost of living – especially real estate – is high here, but most salaries are also higher than elsewhere. Although a career as a public librarian doesn’t pay nearly as much as one in high tech, it’s higher than in the rest of the U.S. And real estate has come down considerably in the past year or two. I’m with Walt – having moved here from the Midwest, I have no desire to return to cold winters requiring expensive home heating systems, extra clothing costs, and crazy car maintenance – not to mention hot, humid summers requiring expensive cooling systems.

    rcn in SF Bay Area

  5. walt says:

    Well…some parts of the Bay Area really do require air conditioning, e.g. here in Livermore. (Last summer, the AC probably ran less than 12 hours total, but that’s unusual–and we keep it set at 80 during the day, higher at night.) “Crazy car maintenance” is an interesting point: I think you see a lot more well-maintained very old cars around here because they don’t have to deal with salt on the roads.

    Still, as to cost of living: beyond real estate, I’m still not sure I see it.