The Bay Area Housing Market

Compared to a friend of mine who has kept an active blog full of pictures of places she visited in Europe (she’s currently working in England), my blog has consisted of nothing but rather boring and mundane activities, such as watching movies (I just watched “Angels and Demons”, which was downright silly but I enjoyed it nonetheless as it was like visiting Rome again), going to operas and ballets (I have already written about Tan Yuan Yuan twice and am about to see a San Francisco Opera production of “Tosca” tonight - big deal), going hiking (even my mom, who’s been here for just a little over 2 weeks, has been Crystal Springs Reservoir, San Andreas Lake, Golden Gate Park, and Portola Valley areas several times by now). I guess I can ask Michael to put up some photos he took in San Francisco Botanical Garden and the Rose Garden in Golden Gate Park, but they really are nothing compared to the magnificent palaces, ancient castles and quaint houses showcased on my friend’s blog (she had pictures of Bath, Oslo, Paris, and numerous cute little English towns such as Kenilworth, Conventry, etc) – too bad that she does not allow public access, or else I would have added a link here.

Just today I was talking to a friend about the Bay Area housing market. When I told him that for this year, I am paying $2,800 a month for a 4-bedroom, 2000-square-foot, 10-year old house in a not-so-attractive neighborhood, he said that it was fairly good deal. I have already battled with the landlord on various issues, as he does not want to spend money on professional services, indicating that he himself certainly does not feel well off enough. First I was really indignant, as I am a landlord myself, and have never interfered with my agent doing anything for my tenants in San Diego, even though my house in San Diego is in much better condition and a much better neighborhood. Then I realized that whatever I do for others has no bearing on how others will behave. Suffice to say that my experience in this rental house has not been exactly enjoyable, and I rather dislike the cold weather here – I would much prefer the sunny weather of Palo Alto and further south.

People say that the high property values justify themselves because you get what you pay for – in other words, by living in Bay Area, you get access to a lot of things that you cannot get elsewhere. In a way, in order to enjoy what the famed Bay Area has to offer, one has to seek them proactively – trying all kinds of restaurants, attending various cultural events, skiing at Lake Tahoe, wine-tasting in Napa or Sonoma Valley or Santa Cruz Mountains, hiking around the lakes and hills, etc, all of which cost money. And if one were to live in a less desirable neighborhood in a 50 to 100 year old un-renovated house in order to pay for all these things that Bay Area has to offer, well, that does not seem to be worth it really either, does it?

Therefore, no wonder multi-millionaires in Palo Alto feel rather poor! Michael and I have been discussing where we would like to buy a house in Bay Area within this year. He loves great scenery and terrific views, and can perhaps live in a smaller place, whereas I am used to really spacious house with many rooms, and therefore less insistent on the absolute beauty of the surrounding neighborhood. But both of us want to live in nicely designed and modern homes, with easy commutes. Despite the housing market slowdowns, it looks like that in order to get something that meets most of these criteria, it will cost at least $1.25 million. And it is not even in Palo Alto, the only place where the public schools are good enough for us to send our kid there. In other words, even after paying at least $1.25 million for a house, we will be paying private school tuitions, and NOT be taking advantage of the school district that presumably has contributed to the high property value.

Isn’t the Bay Area housing market ridiculous? Coming from Boston and San Diego, two places that are not exactly considered inexpensive in the United States, I find it shocking.

Then my friend in New York told me that she was about to rent a house that’s slightly bigger than ours for $5,600 a month! She and I both wondered – are we truly in a recession?