Renting seems to be way better than buying house in Bay Area with new tax caps!!

eBay h9
Apr 8 34 Comments

10k cap on SALT, 750k cap on mortgage. Double edged sword.

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TOP 34 Comments
  • Salesforce pmyz88
    Yeah .. I think folks are going to realize that and it is going to put a dent in market unfortunately
    Apr 8 7
    • eBay h9
      OP
      It is still cold in most parts .., except the multimillion areas where those folks don’t care anyway about these small tax changes.
      Apr 8
    • Tesla bICb68
      East bay is hot now. Prices go up. Not a place you can find millionaires.
      Apr 8
    • eBay h9
      OP
      East bay is only area left where folks can avoid one edge of sword .. i.e by buying the house with less than 750k mortgage.. that might explain the hot market in east bay !!!
      Apr 8
    • Google Mr. Glass
      Good. Rents will go up. Home prices will drop. Good for investors. Buy rental properties. Don’t be sheep.
      Apr 8
    • Salesforce pmyz88
      I think SV is one of the worst place to buy property rentals right now .. You should look at areas with better buy/rent ratio and upside
      Apr 8
  • Amazon Dr. Savage
    Doubled edged sword indeed. Sucks to bleed both ways.
    Apr 8 3
    • Salesforce pmyz88
      True ..
      Means it it bad for market though as more companies are moving out SV or growing elsewhere and housing/cost of living is main issue.
      Apr 8
    • Nvidia CBsO18
      Yeah, most alarming stat in recent news is some 40% of 25-34 yr old planning to leave bay area in next year. Even if just 1/4 follows through that doesn't bode well.. VCs are seeing startups happening more outside of here as well, too high a cost to do a 'garage startup'
      Apr 8
    • Salesforce pmyz88
      SV, especially South Bay is no longer a place for startups ..
      Apr 8
  • Amazon / Eng Yolo!
    What’s your other option, pay $50k/year in rent for a single family home?
    Apr 8 11
    • Nvidia CBsO18
      Uber, it isn't always better either way, it depends. How much goes into principle depends on down-payment percent and increases with time in the typical loan.
      Apr 9
    • Uber
      hsihxum

      Uber

      PRE
      Startup Shell
      hsihxummore
      @op property tax of 15k was already included in the posts above which compared against renting.

      @nvidia that is true. The above shared details was for a 750k loan after 20% down (950k property value) on an interest rate of 3.75% for 30 years. With this, I’m almost adding 1/3rd ($1100) back to the principle I’m paying monthly.
      Apr 9
    • eBay h9
      OP
      You are avoiding one edge at least with 750k mortgage. But in a reasonable school district with reasonable commute it is almost impossible to get 950k single family house. You are either sacrificing on school district or commute.
      Apr 9
    • Uber
      hsihxum

      Uber

      PRE
      Startup Shell
      hsihxummore
      Well its the 45min bart commute to city for me that adds to the deal. But to put back $1100 each month on principle plus taking in the house appreciation in a good school district outweighs the 20min additional time spent on commute.
      Apr 9
    • eBay h9
      OP
      Good for you, it comes down to the personal priorities and individual preferences. 2 hours everyday on commute is too much for some. The headache of getting to/from the bart station and strictly following the bart timings etc is bothersome/tiring/stressful...
      Apr 9
  • Interactions jixk43
    Keep renting and then GTFO, better places to live than here.
    Apr 8 0
  • Nvidia CBsO18
    Well for starters median housing income in bay area is some abysmal number like 85k/yr, and not all tech workers are FAANG level SWEs.
    Apr 9 3
    • Facebook public2
      Maybe a decade ago, even Fremont median income is over 120k now. Fremont: Median household income $122,191, middle-class income range $81,461 to $244,382.
      Apr 9
    • Nvidia CBsO18
      You're right that was the lower end of middle class. Seems like the median is around 115k or so in Santa Clara County. Still quite a bit out of whack if we are considering supporting the median home prices
      Apr 9
    • Nvidia CBsO18
      https://www.citylab.com/equity/2018/05/where-the-house-price-to-income-ratio-is-most-out-of-whack/561404/ So if we take 2.6x130k (to be generous) we get 338k as the affordable median level, vs 1.256M which Zillow says is median for SC County.
      Apr 9
  • Facebook public2
    Nothing changed for most people as income was too high to get the deduction. If are a lower earner and have 1m dollar house then yes your federal deduction was cut by 250k and California remained at 1m. Tax deductions are icing on the cake though and not why folks buy. Renting is absolutely cheaper, the bummer is just that rent will probably go up whereas a house is fixed forever and prop 13 is amazing :)
    Apr 8 2
    • Nvidia CBsO18
      Sure FB, I think the concern is more for the more average tech workers where the deductions mattered.
      Apr 8
    • Facebook public2
      Define average I guess? I assumed this was only related to CA.
      Apr 8
  • Groupon / Eng sleepy
    120k median income probably won’t need more than 10k of mortgage deductions.
    May 12 1
    • Facebook public2
      Who said anything about need? You could be a billionaire and still happy to save 10k from the IRS no?
      May 12