patrick.net

"So in California, a teacher with the average salary of $69,300 is facing a housing market where the median home, according to a study by electronic real-estate broker Redfin, lists for $485,000:

On an average annual salary of $69,300, a teacher should pay no more than about $1,600 a month. Given current interest rates, property taxes, home insurance, and home owners association expenses, a teacher can afford a $260,000 single family home or condo. Of the 50,559 for sale in California, just 17.4 percent are listed below $260,000."

So with two average teacher's incomes it will be $520,000, which is way more that $485,000. Author's whining about non-typical single-income family not able to compete with typical two-income family on the housing market is idiotic. It's not the fucking 50s anymore.

Straw Man says

So with two average teacher's incomes it will be $520,000, which is way more that $485,000. Author's whining about non-typical single-income family not able to compete with typical two-income family on the housing market is idiotic. It's not the fucking 50s anymore.

Two incomes come with other things too.

Daycare and diapers being some.

A studio in SF is around $1600 a month, so is a room in a bigger house.

Also most grown adults have a car payment, insurance, a mobile phone, home internet, cable, water, electricity payments, garbage, and a mouth which needs sustenance stuffed in it every day.

They need to cloth themselves and enjoy themselves to some degree.

After all that, they need to save $120k in cash and closing to get into that $520k home.

How long do you think it takes a teacher to save $120k?

Let's say you put away $1k a month (which is way ambitious).

That's 10 years.

Two incomes come with other things too.

Daycare and diapers being some.

Just as an example: a colleague of mine that lives in the SF Bay Area has two children below the age of five that require daycare. Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

It's a sticky balancing act when one tries to reconcile whether it makes sense for one parent to stay at home while the other works. My colleague and his wife are in the tech sector, so they are probably banking $200k a year. But that is still a large monthly nut to absorb. Especially if you are on two teachers salaries instead.

Nothing disgusts me more than paying middle-class people money.

Employers should not be responsible for compensating teachers, waiters, software developers, what have you. The worker should have to meet his expenses out of his own resources and investments.

I really wonder why the wealthy puts up with the wage demands of the middle class.

donjumpsuit says

After all that, they need to save $120k in cash and closing to get into that $520k home.

Article talks about $485k home.

It's still nothing compared to 2006... The home i purchased in 2011 was at the peak priced at $700K... when interest rates were 6.5% or so.

I purchased for $400K at a 3.95% interest rate. That's a huge difference in monthly nut.

Diomedes777 says

Just as an example: a colleague of mine that lives in the SF Bay Area has two children below the age of five that require daycare. Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

Nobody is forcing them to have kids.

zzyzzx says

Diomedes777 says

Just as an example: a colleague of mine that lives in the SF Bay Area has two children below the age of five that require daycare. Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

Nobody is forcing them to have kids.

I know, why don't people just hire children to wreck their stuff, write on the walls, and pee, puke and sheiss all over once or twice a year to let them know how good they have it. It's a lot cheaper and you get the same rewards.

Diomedes777 says

Just as an example: a colleague of mine that lives in the SF Bay Area has two children below the age of five that require daycare. Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

It's a sticky balancing act when one tries to reconcile whether it makes sense for one parent to stay at home while the other works. My colleague and his wife are in the tech sector, so they are probably banking $200k a year. But that is still a large monthly nut to absorb. Especially if you are on two teachers salaries instead.

Kids grow up fast... Anyone that has kids under 4 know that you don't have much of a social life outside of raising your kids, so your saving money on dinners out and socializing. So 3-4 years of not saving much money before they start public school isn't the end of the world.

Once they are in school.. your daycare needs drop dramatically. Just make sure to buy a house in a good school district so you don't have to pay private school fees and you'll be fine.

BoomAndBustCycle says

Just make sure to buy a house in a good school district

Haha, you see this is the cyclical problem.

Anyone that has kids under 4 know that you don't have much of a social life outside of raising your kids, so your saving money on dinners out and socializing. So 3-4 years of not saving much money before they start public school isn't the end of the world.

Are you seriously suggesting that having children is somehow an offset on the money you might have spent on your social life? I can tell you, as someone who is single, my entertainment budget doesn't come anywhere NEAR $3800 a month. And keep in mind, that was just daycare. Food, additional costs for a bigger house/rental, diapers, continuously outgrowing, clothing, etc. Hardly a testimonial to cost savings.

Once they are in school.. your daycare needs drop dramatically. Just make sure to buy a house in a good school district so you don't have to pay private school fees and you'll be fine.

Yes, your daycare needs will drop dramatically. And what about all the other ancillary costs with growing children? They still need food, and more of it since they are growing. They still need new clothes as they grow. And now, you will be forking over money for extra-curricular activities, such as hockey, soccer, piano lessons, etc.

Yet somehow, they will miraculously be able to buy in a good school district.

Diomedes777 says

Just as an example: a colleague of mine that lives in the SF Bay Area has two children below the age of five that require daycare. Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

So they need to find a cheaper daycare. $1700 per child must be a Cadillac of daycares even in SFBA.

Diomedes777 says

Both he and his wife currently work. Their monthly daycare bill for both children: $3400 a month.

Yes, daycare is extortion. They should get a nanny to keep both kids for less.

One wonders how some poor people have 4 kids. Guess they have other family leaving in the same home. Grand Ma keeps the kids. Or mom doesn't work.

If mom earns $5K a month, after taxes, it pretty much all goes to daycare. Better not work and do a better job of raising your own kids. They can live in a distant suburb in a less expensive house and mom doesn't have to work.

It's all a matter of choices.

But granted, even for upper middle class, you basically have to choose 2 of the 3:
1 - a house
2 - retirement
3 - kids education.

Straw Man says

$1700 per child must be a Cadillac of daycares even in SFBA.

No $1700 is a low cost day care in the BA. I've seen some asking $2300/kid.

It is not a 'housing bubble' anymore ...

It is a 'housing recovery' !

(To someone it is. As prices are now effectively back at 2005 levels here.)

Jeez, can't anyone on this blog get something right?

;-)

Heraclitusstudent says

Straw Man says

$1700 per child must be a Cadillac of daycares even in SFBA.

No $1700 is a low cost day care in the BA. I've seen some asking $2300/kid.

Dude, don't BS me: I have 2 kids (one in daycare and one fresh out of KG) and this is nowhere near true number for average good quality daycare in SFBA. As I said, it's a fucking Cadillac, not Corolla.

Why are median priced houses always such little dumps? So, we've established that the median income isn't buying the median priced house. But why doesn't the actual median priced house even meet median expectations (like a kid's br that can fit a bed, desk AND dresser... and have more than nine square feet left over for him/her to set up his/her hot wheels track?

Teachers need to get in line. Salaried doctors can't afford houses these days. I know some of you think that they're all raking in the cash, but let me tell you, a salaried doctor isn't easily saving up hundreds of thousands of dollars for a down payment before overpaying for his dumpy little median house on his dinky little lot.

Dude, don't BS me: I have 2 kids (one in daycare and one fresh out of KG) and this is nowhere near true number for average good quality daycare in SFBA. As I said, it's a fucking Cadillac, not Corolla.

I just did a quick search to find out some of the stats. Posts on Yelp for the Bay Area lists the 'average' day care prices at being $1300-$1400 per month per child. And this was from some 2009 numbers. Five years later, I can easily see those prices being around $1700 per child. So I would hardly call that 'Cadillac'.

I also went to Babycenter community and the posts there revolving around prices in Sunnyvale have respondents saying it is $1500 to $1650 per month.

So I am not sure where you are sending your kids Strawman. East Palo Alto?

Diomedes777 says

I just did a quick search to find out some of the stats.
...

So I am not sure where you are sending your kids Strawman. East Palo Alto?

Older went to daycare in San Mateo and then in Belmont. Younger now goes to daycare in San Ramon (also considered couple places in Dublin). But yeah, I agree with you completely: quick google search beats real parent's experience all day any day. What the fuck do I know about daycare in SFBA compared to a childless internet ninja from Little Rock, AR? ;)

Damn, with these day care prices, I think it may be wise to teach them kids survival skillz and how to use a microwave and hope that no one snitches to CPS.

If I am not mistaken doesn't the fed government allow families to deduct $3,000 per child (2 max) as a tax credit for childcare expenses? In a way, that's even more valuable than typical MID.

dublin hillz says

If I am not mistaken doesn't the fed government allow families to deduct $3,000 per child (2 max) as a tax credit for childcare expenses? In a way, that's even more valuable than typical MID.

It's better than deduction, it's a credit:

http://taxes.about.com/od/deductionscredits/qt/child_care.htm

Article is BS.
Teachers only need to teach until they meet and marry facebook/google/twitter employee THEN THEY CAN afford to quit AND buy a house.

duh-doi! Are married teachers even allowed to work? I thought they fire them once they get married.

Diomedes777 says

Yes, your daycare needs will drop dramatically. And what about all the other ancillary costs with growing children? They still need food, and more of it since they are growing. They still need new clothes as they grow. And now, you will be forking over money for extra-curricular activities, such as hockey, soccer, piano lessons, etc.

Yet somehow, they will miraculously be able to buy in a good school district.

I never said kids were cheap... But you gotta spend money on something right.. can't take it with you to your grave!

Daycare Costs in the first 4 years DWARF everything else until college tuition atleast... That was my point... But it's only until kindergarten starts. My point was.. they'll be in kindergarten before you can blink! So, those 20K-40K a year nanny/daycare costs don't last forever.

Your not gonna spend $40K a year on your child again until college.

Unless your the Duggars.

Call it Crazy says

I'm guessing you don't have any kids.....

New father actually.. But i don't plan on my daughter living like a Kardashian just because we live in Los Angeles. My dual-income parents were only pulling in $60K together and raised my brother and I with us not wanting for anything I can remember. Different time maybe..

BoomAndBustCycle says

Different time maybe..

Different time, definitely. My stepdad was a cardiologist. We lived in an amazing house with a view to Catalina. We went to private schools and had all kinds of lessons. He owned a large boat, had memberships to a couple of clubs, and two horses. Oh, let's not forget his four ex-wives and his 11 natural children! My husband is also a doctor. We are nowhere near my stepfather's life. We never will be. Too much of our income is spent on regular stuff, not to mention the fact that my husband makes what my stepfather made 30-40 years ago, albeit a different specialty, but a subspecialty, no less... Not a lot of wage growth there. Private schools, a boat... it's laughable.

No one is saying that your children have to live like Kardashians in order to be happy and well adjusted. But there is a lot that falls between dirt poor and Kardashian. It doesn't make you a bad parent because you want your kid to go to the best early learning program that you can afford. Just like median houses, the median day care facilities might fall short of your expectations.

If you have a child that excels at and loves a particular activity, you will likely move the moon and the stars in order to help them achieve their goals. My daughter loves dance. Her regular lessons come to $300/month for 10 hours a week. In addition to that, she takes one private/week at $100 for a total of about $400/month. Next, we have competition fees, choreography fees for the competition dances, costume fees, hotels for competitions that are more than two hours away. Meals out, etc.... These costs come to another $3,000 for the year. So, what started out as a single dance class costing $50/month when she was four has turned into an activity that costs over $10k/year. But she loves it and, more importantly, she works hard at it and is good at it. It's a choice you will be faced with at some point. If you spend it, that's money you cannot save. If you don't spend it, your child misses out on something he/she loves. I would feel guilty squirreling away money and refusing my child her primary activity. But it is an expensive choice.

dublin hillz says

If I am not mistaken doesn't the fed government allow families to deduct $3,000 per child (2 max) as a tax credit for childcare expenses? In a way, that's even more valuable than typical MID.

I've looked into it.. but most of those credits phase out pretty early and are gone entirely for dual incomes over $160K combined. The childcare credit is pretty useless... We would save $600 a year MAX per child. BUT, if you pay a nanny.. you have to pay their portion of the taxes.. so it more than wipes out any credit just hiring and paying a nanny legally.

Even the child tax credit i think phase out begins at $110K... a couple making $55K each in San Francisco.. lose out entirely on the child tax credit by $130K mark.

The only real break is get another exemption/dependant to claim.

turtledove says

I would feel guilty squirreling away money and refusing my child her primary activity. But it is an expensive choice.

Yeah, my wife was into gymnastics.. I'm hoping my daughter likes softball :) haha

The same holds true for public school teachers in New York City.

BoomAndBustCycle says

Even the child tax credit i think phase out begins at $110K... a couple making $55K each in San Francisco.. lose out entirely on the child tax credit by $130K mark.

thanks for doing the research.

higher home prices, and higher incomes, but delining tax incentives if you are still in the trenches

BoomAndBustCycle says

dublin hillz says

If I am not mistaken doesn't the fed government allow families to deduct $3,000 per child (2 max) as a tax credit for childcare expenses? In a way, that's even more valuable than typical MID.

I've looked into it.. but most of those credits phase out pretty early and are gone entirely for dual incomes over $160K combined. The childcare credit is pretty useless... We would save $600 a year MAX per child. BUT, if you pay a nanny.. you have to pay their portion of the taxes.. so it more than wipes out any credit just hiring and paying a nanny legally.

Even the child tax credit i think phase out begins at $110K... a couple making $55K each in San Francisco.. lose out entirely on the child tax credit by $130K mark.

The only real break is get another exemption/dependant to claim.

I've pre-taxed it (5000K limit) for the past 6 years or so.

5K at 35% or so is about 1,750 a year cash benefit.

Daycare cost can run anywhere from 750 (you send them to a house and one looks after 4-6 albeit with permit) to 1000 for a light program (think "little star", education to 1500 for the cadallac heavy programmed institutions near downtown. (in San Francisco)

Most people work to keep the groove in working and maintain earnings potential which can be huge payoff down the road.

BoomAndBustCycle says

turtledove says

I would feel guilty squirreling away money and refusing my child her primary activity. But it is an expensive choice.

Yeah, my wife was into gymnastics.. I'm hoping my daughter likes softball :) haha

I had hoped my son would be into baseball. But I can't blame him for finding it very boring. The mamby pambies have ruined the sport. Kid pitch consisted of five pitches from the kid then three "good" pitches from the coach. We had one kid get 17 pitches! As you can imagine, it's quite boring for the boys watching the same batter miss one ball after the other. It gets to the point that when one kid finally does hit the ball, it's such a shock that no one is ready for it. Then you get to watch a grounder go past the outfield. You'd think that the kid who hit the ball would at least be entitled to run all the bases... But just think what that might do to the self esteem of all the other little players. So, the farthest he can go is second. Seriously, my husband and I used to flip coins over who had to take our son to his games... and we both like baseball. Anyway, it was just too slow moving for him. What does he love? Tennis! Other than golf, I doubt he could have picked a more expensive activity. So, that's another $150/month for group clinics and $300/month for his weekly one-hour private lesson.

Lest we forget... Taekwondo. He's a black belt, now, something that took him a third of his life to achieve. That was $2k/year plus testing fees of $100 per color belt and $500 for black belt and beyond. Now he's working toward his second degree. Same story, different kid. He's good at it, he loves it, and he works hard at it.

Between the two kids, I shutter to think what we're spending on their activities each year. Let's see. $10k for dance; $3k for taekwondo; and $5400 for tennis. $18,400 a year! I'd love to get them into music, but I'm tapped out. So the school program will have to be good enough. Fortunately, neither child has the temperament for real music study, so I don't feel guilty about it.

Without even coming close to the Kardashian lifestyle, it's easy to see how quickly one can spend a small fortune just trying to give your kids opportunities to excel at just a few things.

I was a gymnast, too. I competed as a kid. I also did a lot of dance, but gymnastics was my favorite. I even coached up until a few years ago. You can imagine my disappointment to learn that my daughter doesn't like heights. "What do you mean you're afraid? It's fun!" I'll get over it eventually :)

When I lived in Long Beach in 1980, the doctors were, in fact, all rich. If they bought a house, they were rich, if they had a few rentals, they were rich, if they invested in a savings and loan, they were rich, if they invested in a hospital or medical building, they were rich. Lots of patients to go around and nothing but growth.

Not only did they have high income and low or zero school debt, but in burgeoning LA/Orange County, there was just no investment they could make that did not turn to gold almost overnight. One surgeon used to go around Naples Bay in a yacht that would impress the royals with a bullhorn yelling at all his neighbors and friends.

Those days disappeared after 1980. The drudgery and workloads are still there, with ever increasing liability, risk and regulation, but the rewards have certainly dwindled.

I still think most doctors can afford some kind of reasonable house, but not until they are older and have paid off their school loans, which may put them at their mid to late forties unless Daddy and Mommy were already loaded, which is often the case with professionals.

BoomAndBustCycle says

Even the child tax credit i think phase out begins at $110K... a couple making $55K each in San Francisco.. lose out entirely on the child tax credit by $130K mark.

It sucks. We found that a painful adjustment after graduate school was finished. It made the 2nd income much less lucrative than we had hoped. :(

Ceffer says

but in burgeoning LA/Orange County, there was just no investment they could make that did not turn to gold almost overnight

Thus every housing boom since. An attempt at bringing back the glory days.

Work for LAUSD, the adult teachers make just over 50 bucks an hour, get full retirement, and full benefits. I made over 75 k my first year teaching. Oh, and you can retire at 55, or 50 with 30 years of service, but 30 by 50 is rare unless you started as a clerical. You won't believe what the principals make, OMG.

casandra says

Work for LAUSD [. . .] I made over 75 k my first year teaching.

Very interesting, because their own website says $45k is the starting salary for LAUSD teachers. . . .

http://www.teachinla.com/Research/documents/salarytables/ttableannual.pdf

Look under adult ed or continuation, and you will see the salary scale in dollars per hour. Don't work for k-12, adult ed pays much more. And you have a contract. When you get a raise, which has not happened in like 7 years, you get paid for the difference per hour back to when our last contract officially expired. Once I got back pay in excess of seven thousand dollars with one such raise.

I am currently retired, but still in touch with other teachers and the district.

Top for k-12 teachers is around 96 k per year, and that is with summers off. I only know this cause a friend who is 52 makes this amount and teaches 2nd grade.