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A challenge to a practical mind - the Bay Area buy-vs-rent dilemma

There was a fascinating discussion yesterday on a “chick list” I’m on, the SF Women of the Web, about housing prices in the bay area and bubble-or-not. Someone posted a link to this massively interesting rant on buy-vs-rent by Patrick Killelea. I’m right in Menlo, just over the ped bridge from PA, and I get to watch how quickly homes get sold — often only to be put back on the market within a year.

Patrick is right on when it comes to renting, which Russ’ househunting this past week proved. Happily, Russ is moving to our hood. His househunting (as he called it) gave me cause to explain to someone that yes - of course, househunting means rental when it’s proclaimed so cheerfully. Otherwise it’s just trauma, right? When Russ IM’ed me his Craigslist of candidate houses this weekend, the low prices surprised me — I hadn’t looked at house prices in more than 3 years. I know the price for our appartment (very nice, hanging off the edge of the San Francisquito and a park) kept going down, but wasn’t inclinded to scope out an upgrade.

What a strange world when renting keeps getting more cost effective (and ever more practical, with Mike working in SF and me with a to-be-determined commute as I scope for a new position). As I’m not a happy driver, it’d be terrible to be fully committed to living in Menlo if there was a juicy company in Pleasanton or Emeryville or San Rafael. That’s one cost that Patrick doesn’t even consider - the decreased flexibility that comes with owning a home or flat.

People continue to wonder how people “afford” houses around here. The answer is you build a great company and manage to so that you can have a few such houses. Or you scrimp and save and hope to profit by selling your house to someone flush with market success. Rinse and repeat.

But with time comes growth. I’m much more accepting of the market here now. Previously I expected to take the money and run to some island bunker. $700K takes you further just about anywhere, why not pick somewhere more convivial. I haven’t blogged about this (as I avoid political and newsish stuff), but the tsunami really made me reconsider the idea of tropical paradise. It’s an odd reflection to have, but since I’ve been mulling the life of an expat integrated into an adopted community, I’ve been troubled by new aspects of this experience that I could see in the aftermath of the tsunami. My somewhat glibly independent and adventurer instincts have been tamed by a sort of morbid practicality. Unspoiled is unspoiled and you can build your own infrastructure, but if something goes wrong, there’s little public infrastructure — the sort of safety net we take for granted here. In the event of some huge devastation like we saw this winter, it’s just impossible to recover. We’d rebuild together, if that was even feasible, but the timeline and cost are much different than recovering from a NorCal earthquake. Brewing up gourmet yuppie rum wouldn’t dig us out of that one (but the BVI’s aren’t so remote as Phuket).