According to the San Jose Mercury News, the top three most expensive places for renters in the entire nation are in the Bay Area. We knew it was bad, but this is a whole new level of shocking. In that article, the author writes that with San Jose’s $13.50/hour minimum wage, a person would have to have more than 3 1/2 minimum wage jobs just to afford average rent. Crazy!
To nobody’s surprise, the San Francisco, San Jose and Oakland areas were top three in the nation, but the East Bay isn’t much better off. You’d have to earn $93,000 per year to afford average rent in the East Bay. Given the costs of pretty much everything around here rising, it’s no surprise.
In the real estate market – whether buying, selling, or renting – you have to expect to pay a premium in the Bay Area these days. That’s where people like me come in handy! We can give you expert advice and help steer you in the right direction. Remember, the most expensive direction isn’t always the correct one.
Here are a few more interesting tidbits from the article:
2-bedroom apartments in the South Bay will require you to make about a $50/hour
In San Francisco, Marin and San Mateo counties, it’s closer to $60/hour
This is a national issue: there is no state, metro area, or county in the U.S. where workers earning minimum wage can afford a two-bedroom rental home by working 40 hours per week
Five years ago, about 3,000 people came to the Community Services Agency for food – it’s now over 7,000.
If you’ve lived in Walnut Creek long enough, you’ll remember Pinky’s Pizza and its old location across from the current Trader Joe’s. That was the place to go for pizza after swim meets, soccer games and school functions. When it shut its doors many years ago, it seemed like the next in a long line of Walnut Creek classics to be chased away by inflated costs.
Luckily, Pinky’s was spared. It re-opened a new location across from the Post Office in downtown Walnut Creek a few years ago. The pizza tastes exactly the same (some like it, some hate it…I am personally not a fan of the cheese, their own special blend), but they’ve come back with more TV’s, fewer arcade games and a revamped menu and bar.
For whatever you think of the pizza itself, you can’t beat the friendly staff and environment that has made Pinky’s a favorite among locals for decades. Nowadays, Pinky’s is actually a really cool place to watch sports, as they have enough seating inside and a little outdoor seating area as well. They make sandwiches, salads and wings now, too.
Pinky’s is definitely more grown-up now with the bar scenario and their awesome Happy Hour (Monday-Friday from 3-6 pm), but still caters to kids. Any kid 12 and younger can get a free ice cream, and there are still plenty of classic arcade games in the corner for them to play with.
Whether it’s the nostalgia, the service, the fact that Pinky’s has survived the Walnut Creek rent crisis, or the food itself, Pinky’s is still a downtown fixture. Hopefully, it’ll remain a place for after-Little League pizza and Warriors-watching for years to come (and provide a closer option than Rocco’s).
Everyone loves dogs! I love my dog! You love your dogs, too! It seems that millennials especially like their dogs, as a recent Time article explained that “space for a dog” is the third-most common reason cited by millennials for buying a home in today’s market.
What really struck me about the article is this: “space for a dog” is listed ahead of “children” or “marriage” as reasons for purchasing a home. It came in only behind “more living space” and “building equity.”
Now, isn’t that interesting? We know millennials are getting married later and having fewer children than previous generations, and the housing market has become so expensive across the county that it prices out people who have spent money on marriages and providing for children, but it’s still surprising to see it behind a reason like “space for a dog.”
The rental market prices have also skyrocketed, which makes me think that millennials would rather pay a mortgage in some cases and have their own home with ample room for their four-legged friends, than pay a monthly rent in properties with strict pet policies.
I guess you can always buy a home first, let your dog break it in, and then bring in a partner and children! Whatever works! It’s just funny to see the difference between their generation and mine, and why they pursue home-buying.
When discussing renting versus buying, it’s helpful to have tools to calculate the differences. Luckily, our friends at JVM Lending have hooked us up. Here is our edited version of their information:
Imagine having a borrower who is paying $1,800 in rent who is very nervous about his or her potential payment increase after purchasing a home. These calculators can show how their “effective payment” will go down when tax savings and appreciation are accounted for.
Now, Trulia and Freddie Mac both offer great “rent vs. buy” calculators that will help with this. Even with modest appreciation (like 3%) and tax rate (28-34%) assumptions, these calculators can clearly show how much better off people are when they buy.
For example, according to our imaginary borrower, the Trulia calculator tells us her net housing costs will actually be 3% lower after she buys a $500,000 home with 20% down. These tools can help potential buyers get off the fence by showing why it’s a better investment to buy a home and accurately differentiate between buying and renting. I like to look at as you are paying yourself, not a landlord.