Anybody here know SF Real Estate?

In reply to pheller:

We did the math on renting, after reviewing comparable rentals. With the rehab that would need to be done to make it rentable, and the property taxes, and fees for a rental agency, it really never pans out.

Besides, there are multiple parties involved in the estate, and the easiest thing for everyone to agree upon was "take the money and run."

It makes me sad because... uh... I'm interviewing for an awesome scientist gig in San Francisco. Scientists don't make web developer money.

EvanR wrote: SWMBOs father recently passed, leaving to the estate a house in San Francisco. He bought the house for $38,000. In 1970. It's what I'd call a row house, each building is separate, but there are millimeters between the exterior walls. Living space measures ~1200 square feet, there's a 1-car garage which makes up most of the first floor. There is a sizable back yard, but in this area houses abut the street, so there is no front yard. The house is in a general state of disrepair, having been lived in for the past 30 years by a retired man of modest means. Real Estate agents (and this is backed by Zillow, FWIW) are telling the executor to list it at $1.2MILLION - and expect a bidding war! I don't get it. Can someone explain this to me? Why would a person pay $10,000 per square foot of living space??

Time to start being extra nice to that woman...the caliber of your next car might depend on her!

So, the house passes to SWMBO tax free. You do need to get an appraisal as of the date that it became hers. When you sell, any $$$ above this appraisal is taxable as capital gains. So...if you think it is going to go to a bidding war, you had best get as high of an appraisal as you can squeeze out of the appraiser since it will save you some tax money.

In reply to NOHOME:

SWMBO is an accountant and a tax preparer. I leave that stuff to her :)

EvanR wrote: In reply to NOHOME: SWMBO is an accountant and a tax preparer. I leave that stuff to her :)

Ahhh...so she is like a fiscally responsible woman.

So much for you getting a fun car out of this!

Ovid_and_Flem wrote: In 1970 dollars $38K is worth $250K now. Just shows how much house prices have escalated in some markets.

Up 657%

1.2Mil from 38k... 3157%!

Because I like to push peoples buttons in housing threads:

Dow Jones in Jan 78 (as far back as google finance goes) 809.20 Dow Jones today: 21,184

Up 2618%

Its rare to beat the market, but that's awesome.

EvanR wrote: In reply to pheller: We did the math on renting, after reviewing comparable rentals. With the rehab that would need to be done to make it rentable, and the property taxes, and fees for a rental agency, it really never pans out. Besides, there are multiple parties involved in the estate, and the easiest thing for everyone to agree upon was "take the money and run."

I hope there not an "eviL stepmother" in the mix...on estates I've handled it's an emotional nightmare for surviving children.

NOHOME wrote: So much for you getting a fun car out of this!

She'll be the one with the new car, some sort of Acura to replace her '10 Accord.

Her daughter gets the Accord.

Which leaves me with an '05 Chevy Malibu with 160,XXX miles.

Not exactly what I'd call a "fun car".

Read the title and thought $1million. My sister used to live around that area and was looking for house in/around Frisco bay area. A fixer-upper started at $1 Million and went up. Now this was a while back and housing in CA has gone down a little from the big boom but still very pricey. My mom's house in south central CA at one time was valued at more than half million. Dad used to joke about it being their retirement income. Now valued at around $250,000-350,000. And it only 1600sq-ft although it does have 4 bedrooms & 2 baths. Not a big yard but bigger than the new houses there have. Built in early-60's, parents bought it in late 60's for $15,000. When dad passed 19 years ago, real estate agents were knocking on the door and calling mom telling her they had the house sold already and she never asked to list it. Guessing they checked obits. Mom thought about it. Sell house for $350,000 but would have to spend at least that much for a smaller place or condo. She still lives in the house. Still more valuable than my 1950sq-ft 3bd/2ba on .9acres built in late 80's house in North Alabama. And it's gone up a lot, almost double what I bought it for 18 years ago. A lot of that is due to pricey, bigger, fancier homes being built close by. Sister lives in Northern CA now and still pricey there too.

Thread is relevant to my interests - I have a pretty good job offer out there (Emeryville), but not good enough to afford that. Increased cost of living is the biggest factor holding us back from going for it.

I have some family that works in SF and lives or lived across the Bay in Oakland. One couple rents, the other just sold their ~750 square foot house near the zoo (not great neighborhood) for about $350,000.

That's what passes for affordable there.

I've been there for work trips, and I can say many of the biotech and pharma players are also headquartered in the Bay Area, which also pushes up housing values.

There is another factor that contributes to incomes and housing prices in the Bay Area, stock options and restricted stock. Going back to the 70's and 80's there is tradition here of giving equity as part of compensation to all levels of a company, not just executive row. when the stock market is way up as it now, One of the effects on the housing market is that you have a significant number of buyers who can make a 200K to 500K down payment.

I live less than 10 miles from Facebook HQ. In the 12 months after their IPO, home prices in my neighborhood went up about 20%.

ProDarwin wrote:

Ovid_and_Flem wrote: In 1970 dollars $38K is worth $250K now. Just shows how much house prices have escalated in some markets.

Up 657% 1.2Mil from 38k... 3157%! Because I like to push peoples buttons in housing threads: Dow Jones in Jan 78 (as far back as google finance goes) 809.20 Dow Jones today: 21,184 Up 2618% Its rare to beat the market, but that's awesome.

Actually, 2,618% would be without dividends. Total return from May 1970 to May 2017 with dividends reinvested? 14,753%. Nope, SF Real estate still didn't beat the stock market from 1970 to now. But then, FIL had a place to live for 47 years so that's not exactly a fair comparison. ;-)

EvanR wrote:

NOHOME wrote: So much for you getting a fun car out of this!

She'll be the one with the new car, some sort of Acura to replace her '10 Accord. Her daughter gets the Accord. Which leaves me with an '05 Chevy Malibu with 160,XXX miles. Not exactly what I'd call a "fun car".

You have my condolences for owning a malibu.

cmcgregor wrote: Thread is relevant to my interests - I have a pretty good job offer out there (Emeryville), but not good enough to afford that. Increased cost of living is the biggest factor holding us back from going for it.

If you were single I'd tell you to live in an RV/trailer for a couple of years like this guy:

http://www.businessinsider.com/google-employee-lives-in-truck-in-parking-lot-2015-10

Then move back to somewhere with a sane cost of living and live like a king. I'd like to do that.

In reply to cmcgregor:

If you don't mind an hour commute to the city, prices really aren't bad. East bay, Antioch, discovery bay, Brentwood, Oakley.

Decent areas, about an hour to downtown sf, and not nearly the prices of living in the city.

dculberson wrote:

ProDarwin wrote:

Ovid_and_Flem wrote: In 1970 dollars $38K is worth $250K now. Just shows how much house prices have escalated in some markets.

Up 657% 1.2Mil from 38k... 3157%! Because I like to push peoples buttons in housing threads: Dow Jones in Jan 78 (as far back as google finance goes) 809.20 Dow Jones today: 21,184 Up 2618% Its rare to beat the market, but that's awesome.

Actually, 2,618% would be without dividends. Total return from May 1970 to May 2017 with dividends reinvested? 14,753%. Nope, SF Real estate still didn't beat the stock market from 1970 to now. But then, FIL had a place to live for 47 years so that's not exactly a fair comparison. ;-)

Doh! I didn't realize that wasn't factored in.

gearheadmb wrote: You have my condolences for owning a malibu.

Since it runs, passes smog, and has cold a/c, I only intend to own it long enough to sell it on CL for $1500. Around here, a $1500 car that does all that should sell within 6 hours of posting the ad.

RevRico wrote: In reply to cmcgregor: If you don't mind an hour commute to the city, prices really aren't bad. East bay, Antioch, discovery bay, Brentwood, Oakley. Decent areas, about an hour to downtown sf, and not nearly the prices of living in the city.

Having visited SF a couple years ago, if I had to commute an hour in that traffic daily I'd hang myself.

There are hour commutes that might be fun. Or engaging. Or anything but that nasty collection of 8 lane wide expressways grinding out at 35-70-35-70. berkeley that!

EvanR wrote:

gearheadmb wrote: You have my condolences for owning a malibu.

Since it runs, passes smog, and has cold a/c, I only intend to own it long enough to sell it on CL for $1500. Around here, a $1500 car that does all that should sell within 6 hours of posting the ad.

True, I was just trying to give you a hard time.

Malibus are actually really really good at being transportation. They run a long time with almost nothing needed. Like a honda without the fanbois. But so boring, painfully boring. They would actually make a perfect second car to get to work when the fun car is broken.

But ive wandered off the topic of the thread again havent I? My apologies, carry on.

EvanR wrote: In reply to pheller: We did the math on renting, after reviewing comparable rentals. With the rehab that would need to be done to make it rentable, and the property taxes, and fees for a rental agency, it really never pans out. Besides, there are multiple parties involved in the estate, and the easiest thing for everyone to agree upon was "take the money and run."

Hi EvenR,

Make sure your wife is aware of the provisions contained within California’s Proposition 13. Essentially, Prop 13 sez’ that property tax is to be set at 1.00% of the sale price, can’t be increased more than 2.00% per year regardless of how much the property value has increased, and there are transference provisions between family members.

My grandmother was the original owner of a house that was built in 1978. When she passed away three months short of her 100th birthday, I bought her home from her estate even though my home was just a mile away largely to capture her phenomenally low tax rate.

Without Prop 13, I’d be paying ~$12,400 per year on her home but since I followed all of the county assessor’s requirements and filed all of the needed paperwork, I’m actually only paying $2,700 per year.

Of course, the $9,700 annual savings means that my AGI reduction is smaller so I do wind up paying income tax on the savings…given an effective income tax rate of 25%, my true net annual savings is ~$7,275 relative to buying a comparable home without grandma’s sweet Prop 13 situation.

In reply to RX Reven':

Can you try again in layman's terms, please?

I think what you said means that the buyer will pay more in property tax the SWMBO's father was. Why would this be a factor, as a seller?

KyAllroad wrote:

RevRico wrote: In reply to cmcgregor: If you don't mind an hour commute to the city, prices really aren't bad. East bay, Antioch, discovery bay, Brentwood, Oakley. Decent areas, about an hour to downtown sf, and not nearly the prices of living in the city.

Having visited SF a couple years ago, if I had to commute an hour in that traffic daily I'd hang myself. There are hour commutes that might be fun. Or engaging. Or anything but that nasty collection of 8 lane wide expressways grinding out at 35-70-35-70. berkeley that!

I see you haven't spent much time driving around Pittsburgh. For the most part, I found California traffic refreshing. I had to drive very defensively sure, but nowhere near the rage inducing incidents I have around here on a daily basis.

Honestly the only time I ever got violently angry while driving out there was at rush hour, getting stuck behind 200 cyclists not going anywhere near the speed limit or paying attention to the bike lane at all. Just clogging the road and giving my Tahoe evil thoughts.

3 days a week, from discovery bay to Santa Rosa for 9 months. Heading out was usually 330, the start of rush hour, the city was fine, but 101 north Just past Novato was always a parking lot. Coming back at 10 was smooth sailing unless someone had more car than skill on route 4.

It's strange, all those cars, all that traffic, I'd drive into San Francisco for lunch just because I heard of a new brewery or sandwich shop. I won't go the 20 miles to downtown Pittsburgh for less than a hockey game someone else bought the tickets for, and it's only 2 lanes each way.

My mom's house falls under prop 13. I may not have the complete meaning but as I understand it, it is basically a grandfather clause when it comes to property taxes. If the house was owned by a family before prop 13 then the tax rate of prop 13 applies. If the house is sold to a different party outside family or is a new construction after prop 13 then standard tax rates apply. Standard tax rates are outrageously high and could mean $10,000 or more a year property tax. Under prop 13 that tax rate would be about 1% or 2% of that. This was a big factor for my mom when dad passed away 19 years ago and real estate agents were trying to talk my mom into downsizing. Selling her 4-bed/2ba <1700sq-ft house and moving into a smaller condo. Was significantly cheaper for mom to keep the house, especially on her limited income. And on the list of reasons why I didn't go back to California when I retired from the military. Grew up just north of Santa Barbara.

Talk to a Cali tax attorney! The estate's investment basis is what he paid for the house, and it seems to have increased a bit since then.

And for goodness sake don't piss away a nice inheritance on a daily driver. Invest that money and let it work for you (her).