How much of your net worth does your home represent?

[Ally]

Ours is also about 7%, but I hardly think of it as part of our net worth, because we would have to have somewhere to live, even if we sold it.

 

[photoguy]

I'm not sure what would flood in Palo Alto. There's nothing there unless the entire bay overflows.

Ok. Here's what the city website shows:

Yes. The entire city of Palo Alto is in a flood zone of one kind or another. But most of the city is in an "X" zone, which the Federal Emergency Management Agency (FEMA) describes as an area either lying outside the so-called 100year flood limit and inside the 500year flood limit, or as lying within the 100year flood limit but shallow enough to not represent a special hazard. The remainder of the city lies within Special Flood Hazard Areas (SFHA), which, roughly speaking, means the area of special hazard from a so-called "100year flood". (The Foothills area is a special case. It has not been studied and is Zone X by default.)

 

[eta2020]

It's possible to get a nicer house for 1.8M in Palo Alto. I have good friends that recently did. They were able to buy an Eichler house (mid century modern) in Palo Alto for 1.8. Fortunately, they're used to living small - it's only 1600sf... but the layout works for them.

Their rental they lived in prior to purchase sounds more like the hoarder house - small rooms, not a lot of light, etc.. But the rent was still super pricey.

His google salary doesn't go as far as his qualcomm salary did when you look at home values.

I really don't understand why people want to live over there. The salaries are at best 10-15% higher then in for example Route 128 but one needs at least 35% more to adjust for cost of living and sky high taxes.

Now I do not argue that places like San Luis Obispo are nice in CA....but that is much different from Palo Alto in quality of life and prices.

 

[NW-Bound]

A well-known corp whose name starts with a G wanted my brother back, and offered a stock grant worth $1/2M. I do not know about the salary, but my brother said "NO". There was no way he could afford a 4,000-sq.ft. McMansion like the one he lives in now. Heck, he couldn't even afford that $1.8M derelict shack.

 

[TrvlBug]

So I'm guessing you'd rather live where you don't have to pay $1.8M for a former hoarder house?

Hoarder House In Palo Alto Is On the Market for $1.8 Million

That's cheap. Article in the local paper a week or so ago highlighted a 900 sq ft house in Palo Alto that sold for $3M :face palm:. It's all about location, location, location and I'm still kicking myself for not buying the tiny house in Cupertino 17 years ago, although we did pretty well.

We're at 23% not counting SS. Recently got approved for a HELOC and I had to pick myself up off the floor when I saw the appraisal valuation.

 

[eta2020]

A well-known corp whose name starts with a G wanted my brother back, and offered a stock grant worth $1/2M. I do not know about the salary, but my brother said "NO". There was no way he could afford a 4,000-sq.ft. McMansion like the one he lives in now. Heck, he couldn't even afford that $1.8M derelict shack.

And it is not only about cost of living. It is about quality of life, traffic congestion, lot size, long work hours, interaction with neighbours, property taxes etc etc.

But granted if you are Zuckerberg it is nice place to be. On the other side there are 100s of thousand Software Engineers making 120k-180k scraping by.

We had an option to move other there few years ago but 15% higher salary simply made no financial sense.

 

[photoguy]

I really don't understand why people want to live over there.

It's an awesome place to have a career. When I moved there, part of the reasoning was that I would have multiple possible employers in the area. For most other cities, I could work at most for 1 or 2 companies. Many cities in the US would have no viable employers for me. People with the 2-body problem are even more constrained.

For example, if I type in "Data Scientist" into linkedIn job search it returns 8-10 pages with reasonable matches centered on Palo Alto. For Austin Tx I get 1/2 page. Chicago yields 1 page.

Startups are also very attractive to those fresh out of school.

The salaries are at best 10-15% higher then in for example Route 128 but one needs at least 35% more to adjust for cost of living and sky high taxes.

I've always wondered about this and have no clue if this is true or not. Also a huge portion of compensation may be through stock options/grants/rsu which can be quite variable. I'd be very interested in seeing quantitative data on this.

 

[RE2Boys]

About 8%, not including SS or pension in the calculations.

 

[eta2020]

It's an awesome place to have a career. When I moved there, part of the reasoning was that I would have multiple possible employers in the area. For most other cities, I could work at most for 1 or 2 companies. Many cities in the US would have no viable employers for me. People with the 2-body problem are even more constrained.

For example, if I type in "Data Scientist" into linkedIn job search it returns 8-10 pages with reasonable matches centered on Palo Alto. For Austin Tx I get 1/2 page. Chicago yields 1 page.

Startups are also very attractive to those fresh out of school.



I've always wondered about this and have no clue if this is true or not. Also a huge portion of compensation may be through stock options/grants/rsu which can be quite variable. I'd be very interested in seeing quantitative data on this.

Try monster.com on Boston Massachusetts. 100s and 100s of software jobs just like in Silicon Valley with not much salary/RSU difference.

You can look at glassdoor.com. RSUs and Stock options are here as well.

Now this is also one very very expensive area but it is much cheaper and has lot of European charm and character. We do have wicked Winter storms though

 

[NW-Bound]

And it is not only about cost of living. It is about quality of life, traffic congestion, lot size, long work hours, interaction with neighbours, property taxes etc etc.

But granted if you are Zuckerberg it is nice place to be...

Umm... On the way back from Nova Scotia, I drove by Boston and took 495 to detour around the city (we had visited Boston twice). Good grief! The traffic was terrible, even though 495 circles a 20-mile radius around Boston. Coming back from a Canadian province with a population of 900K, it's tough!

But you are right that if I were at least a hectomillionaire, I could overlook the problems of living in Silicon Valley. But wait! If I were rich and retired, why would I have to live there again?

 

[eta2020]

So here it goes:

My lovely 1100 sq ft house located in Boston's equivalent of Palo Alto area sitting on about 6000 sq ft lot is about 14% of our NW not counting future SS.

 

[photoguy]

Try monster.com on Boston Massachusetts. 100s and 100s of software jobs just like in Silicon Valley with not much salary/RSU difference.

You can look at glassdoor.com. RSUs and Stock options are here as well.

I've looked at those sites but never trusted them. Their salary data never seemed to match up with my own numbers (and numbers from friends). I think this is because using job title is way too coarse a filter. Ideally I'd want something like IEEE salary survey where they aggregate by education level and years of experience (e.g. Masters EE) but I don't believe they breakdown geographic regions finely enough to pull out "bay area" or Boston (I could be wrong about this -- I haven't looked at IEEE's data in a long time).

 

[rodi]

A well-known corp whose name starts with a G wanted my brother back, and offered a stock grant worth $1/2M. I do not know about the salary, but my brother said "NO". There was no way he could afford a 4,000-sq.ft. McMansion like the one he lives in now. Heck, he couldn't even afford that $1.8M derelict shack.

My friends moved from a 4500 sf McMansion in Carmel Valley (pricey area in San Diego)... The wife is not super happy about the downsized home - but it's her husband's dream job.

My husband was offered a job with Disney, back when they were designing EuroDisney... They offered him 30% less than he was making in Philly - he'd have been based in CA. They didn't understand why he declined the offer because "everyone wants to work for Disney". LOL.

 

[scrabbler1]

For me, about 7%. That excludes SS, my frozen company pension, and small cash balance amount. I own my small co-op apartment outright.

 

[Dash man]

My home near Valley Forge is about 8% not counting SS.

 

[nuke_diver]

That place in Palo Alto sold for that much money because it will be leveled and a McMansion built on it. If I sold my house here the same thing would happen though my house is a bit nicer but small relatively speaking at 1900sf. The lot though is 13000sf and lots this size don't exist in very many places in the Bay so those that want one are willing to pay for it. Since I don't live in PA I won't get 1.8M for it though

To the original poll though, my house is not considered in any net worth calculations. It is paid for and the budget considers the PT and other expenses. But you have to live someplace so I would never consider it as part of my net worth. I would only consider it if I knew categorically that I would be selling in short order and what I would likely have after getting something else

 

[NW-Bound]

The OP's instruction is to include home value in NW calculation. However, same as many posters here, what I care about is the bottom line in my Quicken screen, and that has no home value in it.

The home expenses do appear in Quicken under the "Spending" tab though. How can they not? Aye, aye, aye... They certainly are a drain on net worth, at least for me. Utilities, taxes, insurance, and repairs... Aye, aye, aye...

I would have more money to count if I convert them to cold cash. It would also lower my WR, if I live and travel in the motorhome.

 

[eta2020]

The OP's instruction is to include home value in NW calculation. However, same as many posters here, what I care about is the bottom line in my Quicken screen, and that has no home value in it.

The home expenses do appear in Quicken under the "Spending" tab though. How can they not? Aye, aye, aye... They certainly are a drain on net worth, at least for me. Utilities, taxes, insurance, and repairs... Aye, aye, aye...

I would have more money to count if I convert them to cold cash. It would also lower my WR, if I live and travel in the motorhome.

+1

Yes home is really expense but it is one expense I am willing to make without saving money.

Once we retire we will sell our house in expensive area whose purpose is focus on career and making money and...........we will buy property in area with focus on quality of life.

Neither Boston nor Silicon Valley has focus on quality of life IMO.

 

[NW-Bound]

Ah, but quality of life is so subjective. My nephew, a pharmacist, went to work in Manhattan because he wanted to experience life there. Then, he said he would want to spend a few years in SF next.

I am glad that my definition of quality of life requires less money than what others need.

 

[FIREd]

It's possible to get a nicer house for 1.8M in Palo Alto. I have good friends that recently did. They were able to buy an Eichler house (mid century modern) in Palo Alto for 1.8. Fortunately, they're used to living small - it's only 1600sf... but the layout works for them.

Their rental they lived in prior to purchase sounds more like the hoarder house - small rooms, not a lot of light, etc.. But the rent was still super pricey.

His google salary doesn't go as far as his qualcomm salary did when you look at home values.

Sometimes I wonder who can afford to buy all these houses. We have a very nice income but I feel like a $1.8M house is WAY out of our league.

 

[daylatedollarshort]

That's cheap. Article in the local paper a week or so ago highlighted a 900 sq ft house in Palo Alto that sold for $3M :face palm:. It's all about location, location, location and I'm still kicking myself for not buying the tiny house in Cupertino 17 years ago, although we did pretty well.

We're at 23% not counting SS. Recently got approved for a HELOC and I had to pick myself up off the floor when I saw the appraisal valuation.

I actually was looking for the $3M house article link but I stumbled across this one instead and this one was actually funnier. Well, it is funny until we go out house hunting anyway. Then it gets kind of depressing even though we have a house to sell. The smaller houses seem to be in high demand and sell for more per square foot, so downsizing may not make any financial sense, even in the areas where us lesser mortals reside, miles from Palo Alto.

The $3M house was sold by a musician who never made more than $30K a year in his life. I think he bought a retirement home in Guerneville, so I imagine he had quite a bit left over to invest.

 

[Bestwifeever]

What are taxes on these Cali homes?

 

[nuke_diver]

What are taxes on these Cali homes?

Depends when you bought it.... taxes are based on the sale price and then Prop 13 only allows a 1.5% increase (I think) per year. That has allowed many of my neighbours who are retired to stay in houses that would list at $1.5-2M. OTOH those people who just bought a 1.5M house, tore it down to put up their own personal touch (and it happens all the time) are going to be hit with a rather large PT bill every year

 

[NW-Bound]

Proposition 13 means that as a newcomer to the state, you will be paying 20X or more of what your neighbor is paying because he's a long-time resident.

In actual dollar amounts, you can expect to pay around 1.1-1.2% of the sales price each year. This means close to $20K/year for the lovely $1.8M tear-down home mentioned in a previous post.

Just go on Zillow, look around and you can find homes offered on the market at $3M+, yet the current owner is paying less than $2K/year.

And by the way, the above tax rate is roughly the same in Southern CA too.

Prop 13 means that if someone pays less, then somebody else has to pay more. I would not want to be that somebody else.

 

[Dwhit]

Housing is cheap in Tulsa. Our house is right at 5%