# $2,800,000 for a 1,500sq. ‘ home in Silicon Valley !!



## Janderso (Mar 16, 2022)

My wife read an article this morning about a home near Apple Park sold for $800,000 over the asking price.
This is a .12 acre parcel in a standard high density sub division.
1,500 square feet! 3 bedroom- two bath.
What, who, how can anyone afford this?

Went to Lowes yesterday, I needed 12’ of #10 stranded wire. I need red and black. They had no black in bulk or in rolls.
I paid $12.83 for two strands.
A 500 foot roll was $508.
Is it just me or does the value of dollar seem to be darn near worthless?
On a positive note, fuel prices are expected to drop soon


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## projectnut (Mar 16, 2022)

Janderso said:


> My wife read an article this morning about a home near Apple Park sold for $800,000 over the asking price.
> This is a .12 acre parcel in a standard high density sub division.
> 1,500 square feet! 3 bedroom- two bath.
> What, who, how can anyone afford this?
> ...


Prices here in the Midwest are a bit more reasonable.  I can sell you our 2,800 sq. ft.  house complete with a 3 car garage and machine shop for a mere $1,999,000.00.  Just think of the money you'll be saving.

On a more realistic note the prices all over the country are out of control.  We have a family cottage on a small lake about 100 miles north of our home.  Last fall someone paid over $280,000.00 for a cottage that was assessed at $80,000.00.  The place is not much bigger than an outhouse, and sits on a property about the size of a postage stamp.  There is no yard and the lake access is down a steep staircase.  I would have been hard pressed to pay the assessed price let alone over 3 times the assessed value.


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## Navy Chief (Mar 16, 2022)

Silicon Valley is one of the wonderful places that has incredibly intelligent and educated people working there, and living in their cars because they can't afford even a studio apartment...


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## MrWhoopee (Mar 16, 2022)

I have a friend who used to sell real estate in the Bay Area. She told me that the market was driven by the wealthy from other countries, notably India and China, along with the over-paid dotcom millionaires. It's the climate, both physical and cultural. The wealth gap is real and getting bigger.


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## Janderso (Mar 16, 2022)

MrWhoopee said:


> I have a friend who used to sell real estate in the Bay Area. She told me that the market was driven by the wealthy from other countries, notably India and China, along with the over-paid dotcom millionaires. It's the climate, both physical and cultural. The wealth gap is real and getting bigger.


Unbelievable


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## MrWhoopee (Mar 16, 2022)

Navy Chief said:


> Silicon Valley is one of the wonderful places that has incredibly intelligent and educated people working there, and living in their cars because they can't afford even a studio apartment...


A few years ago there was an article in one of the Bay Area newspapers about a homeless man who lived in a tent in the middle of a cloverleaf interchange. He had a nice car, cell phone and a club membership where he showered etc.  He had a good paying job, just not good enough.


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## Navy Chief (Mar 16, 2022)

MrWhoopee said:


> A few years ago there was an article in one of the Bay Area newspapers about a homeless man who lived in a tent in the middle of a cloverleaf interchange. He had a nice car, cell phone and a club membership where he showered etc.  He had a good paying job, just not good enough.


I have met several people in the IT industry that lived in their cars and showered at the YMCA while they worked in Silicon Valley... They make very good money and can't afford to live there.


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## RJSakowski (Mar 16, 2022)

The significantly higher prices for homes in California has been a mystery to me for almost fifty years.  I can see how land and lot prices may be higher but building material costs shouldn't be that much different than the rest of the 48.

As to lake front property in  central or northern Wisconsin, they aren't making any more it it and people with money to spend are panic buying.


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## jaek (Mar 16, 2022)

People don't appreciate how crazy some tech salaries are these days. Plenty of two-income families bringing home over a million dollars a year. No new housing being built either, so either commute 45 minutes each way or pay half your salary for housing.

Some people think that remote work will change all this, but we'll see.


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## MrWhoopee (Mar 16, 2022)

RJSakowski said:


> The significantly higher prices for homes in California has been a mystery to me for almost fifty years.  I can see how land and lot prices may be higher but building material costs shouldn't be that much different than the rest of the 48.
> 
> As to lake front property in  central or northern Wisconsin, they aren't making any more it it and people with money to spend are panic buying.


Location, location, location.


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## RJSakowski (Mar 16, 2022)

Thirty years ago, I bought my 2300 sq. ft. farmhouse with 35' x 90' barn, 1 car garage, and 20' x 30' granary with attached 20' x 12' covered parking on 12.5 acres of land for $25K.  The property  is now assessed at ~$300K, mostly to keep up with surrounding properties as a tax assessor has never done a walk through.  

For the 16 years, prior, I was renting the property for $125/mo.  Back then, moving away from Madison, AKA Mad Town, and Dane County  to the relative wilderness of Iowa County was highly attractive to people like myself who favored the far less regulation and freedom to hunt.  OTOH, the area was a little too wild for many if the more affluent types.  

As more and more suburban and rural land surrounding Madison got bought up and colonized the c4rowds started pushing outward.  Now, at 25 miles from the center of Madison, this is a reasonable commute.  Whereas I used to be able to see only on other residence and that was when the leaves were off the trees, there are now nine within a half mile of me.  Thankfully, zoning restrictions have limited further growth although the town board regularly receives petitions to modify the zoning.


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## Janderso (Mar 16, 2022)

MrWhoopee said:


> A few years ago there was an article in one of the Bay Area newspapers about a homeless man who lived in a tent in the middle of a cloverleaf interchange. He had a nice car, cell phone and a club membership where he showered etc.  He had a good paying job, just not good enough.


That’s Daryl!
I used to work with a guy who had the dame experience.
He went to his gym to shower and shave, had a good job, stayed with friends when he could but basically lived out oh his van because he could not afford to rent.
First, last, deposit is close to $10,000 in these high rent areas.
He got cancer which drained his accounts.


Navy Chief said:


> I have met several people in the IT industry that lived in their cars and showered at the YMCA while they worked in Silicon Valley... They make very good money and can't afford to live there.


I guess they can struggle for a couple years then move or work from home they paid cash for in some more reasonable part of the country.


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## Navy Chief (Mar 16, 2022)

Janderso said:


> That’s Daryl!
> I used to work with a guy who had the dame experience.
> He went to his gym to shower and shave, had a good job, stayed with friends when he could but basically lived out oh his van because he could not afford to rent.
> First, last, deposit is close to $10,000 in these high rent areas.
> ...


Yeah, they are doing it to build their resumes.


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## MrWhoopee (Mar 16, 2022)

Janderso said:


> That’s Daryl!
> .
> He got cancer which drained his accounts.


Off-topic, I had two friends who were similarly devastated, one name Daryl. Each had standard Medicare and the 20% they were responsible for wiped them out. Daryl was the lucky one, he died. At the urging of a friend, I bought a Medicare Advantage plan with an annual out-of-pocket cap. I can afford $6k but not $100k. 

On the upside, I inherited Daryl's oxy-acetylene setup.


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## Hozzie (Mar 16, 2022)

I don't feel sorry for people choosing to live in their car and choosing to work in a place they can't have a life.   If you choose to live that way, that is on you.

There are all kind of places people can live and work and have a life.  You get what you deserve in most cases.


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## projectnut (Mar 16, 2022)

Hozzie said:


> I don't feel sorry for people choosing to live in their car and choosing to work in a place they can't have a life.   If you choose to live that way, that is on you.
> 
> There are all kind of places people can live and work and have a life.  You get what you deserve in most cases.


I'm not quite that much of a harda**, but I do agree that sometimes people get caught in a career where the salary doesn't meet the cost of living.  I have 2 brothers in computer programing.  One is a contractor living in Silicon Valley currently working for Google.  I'm sure he's paid handsomely in that he does own a house and all the amenities that go with it.  Just in case he has a Jeep Wagoneer he refers to as his "4 bedroom" should he suddenly become unemployed.

The other brother worked as a contractor for Fermi Labs.  He kept the job because it paid about 5 grand more than one could have had locally.  We tried to reason with him telling him the cost of fuel alone would exceed the difference in pay.  The commute time, and wear and tear on the car were other factors making the job less desirable.  After running through several cars and several thousand gallons of fuel it finally dawned on him, he'd made a mistake.  He quit the job, went on unemployment until that ran out, and now sits at the local coffee shop with the boys grumbling about how unfair life is, while his wife is still working


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## Reddinr (Mar 16, 2022)

I got two offers early in my career that would have landed me in the thick of it up there.  I visited the area, which was nice but very crowded, even then.  The money was pretty attractive and "Silicon Valley!", but once you did the math (salary minus expenses), I was better off with a lower salary where I was.  It was one of my better life choices I think.

 We have this fridge magnet that shows different statistics in 1959:  Average income: $5016, Average home cost: $12,400, Gallon of gas $0.25, Dow Jones ~600 (now about 35000).  The $5K income would put you squarely in the 22% tax bracket.  If you were rich and made $100K, your tax bracket was 75% !   Average income last year was about $51K, 12% bracket with the highest bracket being 37%.  (Married/joint)  Interest rates were pretty good then too at about 2.6% but went up quickly in the following years through 1985.


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## BGHansen (Mar 16, 2022)

Wow!  Glad we bought our 64 acres and 2800 sq. ft. home in 1993 for less than 1/10th that Silicon Valley palace!  That's a $7,777.77 monthly house payment on a 0% interest note over 30 years!  Nice place to visit, but we couldn't afford to live there!

Bruce


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## Navy Chief (Mar 16, 2022)

I loved California when we lived there, but financially leaving was one of the best decisions I have ever made. I moved to a much lower cost of living area and earn more than my counterparts that still live in San Diego. 

Sent from my Pixel 5 using Tapatalk


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## matthewsx (Mar 16, 2022)

That's my old neighborhood, parents bought an Eichler in Cupertino in 1959. It's not really cheap anywhere anymore, building hasn't kept up with demand. Having lived in lower cost areas (Arizona for 8 years and Northern Michigan 10 years) I'm darn happy (and lucky) to be back in NorCal.

John


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## matthewsx (Mar 16, 2022)

Yes, salaries are high and many two income families can entertain very high mortgages but pressure from overseas investors are the real driver.

Also, different ways of financing and/or living contribute to the increases. Probably 25 or 30 years ago I asked one of my Chinese neighbors how they could afford such an expensive house. 

They explained two things, first there were often multiple families in one home plus parents, grandparents, etc. 

Second, financing through non-standard lenders that offered 100 year mortgages. Your kids would be obligated to pay the mortgage long after you were dead, and their kids too.

Neither option was available to me so I moved away, eventually circumstance opened the door and I snuck back into Santa Cruz....

John


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## Janderso (Mar 16, 2022)

Reddinr said:


> I got two offers early in my career that would have landed me in the thick of it up there.  I visited the area, which was nice but very crowded, even then.  The money was pretty attractive and "Silicon Valley!", but once you did the math (salary minus expenses), I was better off with a lower salary where I was.  It was one of my better life choices I think.
> 
> We have this fridge magnet that shows different statistics in 1959:  Average income: $5016, Average home cost: $12,400, Gallon of gas $0.25, Dow Jones ~600 (now about 35000).  The $5K income would put you squarely in the 22% tax bracket.  If you were rich and made $100K, your tax bracket was 75% !   Average income last year was about $51K, 12% bracket with the highest bracket being 37%.  (Married/joint)  Interest rates were pretty good then too at about 2.6% but went up quickly in the following years through 1985.


I’m always interested  in the percentage of annual income that home or new truck is.
People use to buy a new car every few years because they could afford it.
That has drastically changed.
Let’s ask the group.
What percentage of your family gross income was your first home?
Same question for the 1990 Chevy you bought new?

I’ll start.
My first home was .533 of my gross annual income. I could buy my home in two years if all my gross income went into the house.
Three years ago, my wife and I had a percentage as follows, 0.297. It would take a little over three years to pay for our home if our gross income went to pay off the home.
My new truck was less than half of my annual income in 2017.

I know this is a ghetto math problem but it does illustrate the lack of buying power in our dollar.


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## mmcmdl (Mar 16, 2022)

Pretty soon I'll be able to tear the old house down up in the mountains and sell the " barnwood " for a couple million .


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## Reddinr (Mar 16, 2022)

My first purchased home was ~1.5X gross income, mid 80's in So. Cal.. and about 2.5X gross for last one in late 90's (but 2.5X larger with 40X the land in lower cost of living area).  It is hard to compare apples to apples.

I don't remember what I paid for cars except for my first car was about $300 + ~$100 in parts, used, and worth every penny.


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## CluelessNewB (Mar 16, 2022)

~1987 I was working for as a Computer Engineer in VT and had just bought my 1st house about 15 minutes from work.  I went to San Jose CA on a 2 week assignment and was working with some other engineers with similar backgrounds and work experience.  Four of them were sharing a tiny 2 bedroom apartment and had a 1.5 hour commute each way to work.  Needless to say they were very jealous.   Location, location location.


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## 7milesup (Mar 16, 2022)

Hozzie said:


> I don't feel sorry for people choosing to live in their car and choosing to work in a place they can't have a life.   If you choose to live that way, that is on you.
> 
> There are all kind of places people can live and work and have a life.  You get what you deserve in most cases.


That is pretty harsh and quite narrow-minded.  There are a lot of people that are stuck in a circumstance, for whatever reason, that results in a tough living situation.  With the price of rent and new homes skyrocketing, there is now a growing number of working people that are getting displaced, with some of them living in their cars.  
As far as your last two sentences, it seems to ring of entitlement.


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## Winegrower (Mar 16, 2022)

It’s clearly more difficult to start out these days.   My first job was in 1970 with HP in Loveland Colorado, at the princely salary of $1075/mo.  I rented a 3 bedroom house, garage, fenced yard a 5 minute walk from the HP facility for $160/mo.  Car was a 6 year old Pontiac Catalina, in marginal shape after a winter in Cambridge, MA, but paid for. Food seemed insignificant as a budget item, the utility bill was laughable looking back.  In 3 years we had saved enough for my first house, a terrifying $29,500 investment.

Frankly, I have never felt as rich since.


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## mickri (Mar 17, 2022)

Early in my life cost of housing was never an issue.  I have never rented in my life.  My mom told one of our friends who mentioned renting when I was looking for my current home "I would rather live in a tent on my own land then rent."

Fresh out of college the payment on a condo was the same as rent.  I bought a condo.  My friends thought that I was nuts.  They were renting.  That condo helped me move to a house.  Next was another condo a block from the beach in San Clemente.  Then a house two blocks from the beach.  Another house two blocks from the beach after a divorce.  This house was bought at the bottom of a market downturn.  Just lucky.  That house appreciated so much that I was able to pay cash for my last two houses.

I doubt that I will ever move again unless it is to an ADU on my daughter and son-in-law's ranch.  I like to buy fixer upper homes.  Getting too old to do that again after I get done with my current house.


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## Craig1514 (Mar 17, 2022)

Janderso said:


> My wife read an article this morning about a home near Apple Park sold for $800,000 over the asking price.
> This is a .12 acre parcel in a standard high density sub division.
> 1,500 square feet! 3 bedroom- two bath.
> What, who, how can anyone afford this?
> ...


Arkansas here, I moved to the area 4 years ago, 100k buys a house and some land.  But, it is Arkansas…..


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## ahazi (Mar 17, 2022)

RJSakowski said:


> The significantly higher prices for homes in California has been a mystery to me for almost fifty years.  I can see how land and lot prices may be higher but building material costs shouldn't be that much different than the rest of the 48.


It is the cost of land + heavy regulation and building codes by the city that cost $$$ (architects, structural and soil engineers) to comply with and construction labor shortage that makes everything more expensive. ...and on top of it, profit margin and expectations by developers and a willing and able buyer pool drives up the prices plus cheap money when interest rates are low. 

I know this from experience, I live in Los Angeles for 40 years.

Ariel


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## 682bear (Mar 17, 2022)

In 1995, shortly before getting married, I bought our first home... it was a 1978 model single wide mobile home on a 3/4 acre lot... it was a dump, but my mortgage was $125 per month... we lived there for 4 years.

In 1998-99, we built our current home, a 2100 square foot brick house on a full basement, on family land. Me and my dad did most of the work ourselves... we hired out the basement excavation, the HVAC, and the brickwork. Dad was planning on doing the roofing, also, but with a 10/12 pitch, I didn't want him up there any more than absolutely necessary, so we hired a roofing company.

All expenses considered, I spent almost exactly $100,000 to build it...

A couple of years later, I added a 30x30 attached garage for around $9000, IIRC...

We moved in October '99... we paid the mortgage off in 2016...

My 23 year old daughter keeps talking about getting her own place, but when she starts checking prices, she decides she'll live with us forever...

I can't even begin to imagine how difficult it will be for her to start her own life/ family with the high cost of everything now... 

I feel like the entire world has went nuts...

-Bear


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## Hozzie (Mar 17, 2022)

7milesup said:


> That is pretty harsh and quite narrow-minded.  There are a lot of people that are stuck in a circumstance, for whatever reason, that results in a tough living situation.  With the price of rent and new homes skyrocketing, there is now a growing number of working people that are getting displaced, with some of them living in their cars.
> As far as your last two sentences, it seems to ring of entitlement.


You seem to have missed a major term in my response.   CHOOSE.  Life if full of choices, some harder than the others, but you always have choices for the most part.  In this case we are talking about obviously smart people working for major corporations, not some inner city family.  We can conflate any issue, my response is in relation to those obviously smart enough people that have a choice.


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## 7milesup (Mar 17, 2022)

682bear said:


> My 23 year old daughter keeps talking about getting her own place, but when she starts checking prices, she decides she'll live with us forever...
> 
> I can't even begin to imagine how difficult it will be for her to start her own life/ family with the high cost of everything now...
> 
> I feel like the entire world has went nuts...


Two of my three kids were able to buy houses in the last year, but they certainly did not get any deals.  The one kid and her husband looked at 40 houses (yes, you read that correctly) before they found one they could afford or wasn't sold before they drove in the driveway to look at it. 
My middle daughter works in Washington DC.  She absolutely loves her job, but the chance of her owning her own home is nearly zero.  It is really sad in my opinion.  Student loan debt is another issue that is crushing this country.


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## Janderso (Mar 17, 2022)

Craig1514 said:


> Arkansas here, I moved to the area 4 years ago, 100k buys a house and some land.  But, it is Arkansas…..


Are wages really low?
A working man's home in Northern CA, where I live is around $350-$400,000.
The closer you get to the bay area prices sky rocket.
Even in Sacramento property has really gone up.


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## Janderso (Mar 17, 2022)

682bear said:


> I can't even begin to imagine how difficult it will be for her to start her own life/ family with the high cost of everything now...
> 
> I feel like the entire world has went nuts...


It's really sad. My youngest would like to buy a home. We can help out but it's still going to be tough.
A $250,000 house is one thing but that same old home is over $350,000 a couple years later.
Then you need to replace the electrical, plumbing, roof, HVAC.......


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## MikeWi (Mar 17, 2022)

Then there's the feeding frenzy to deal with. I'm buying a place right now, and the realtors have been telling me how they get blind offers on properties without them even showing the house. I've twice tried to make an offer on a house put on the market that morning only to find there was 4 or more offers already made for more than the asking price. We got "lucky" and found a beautiful old house that's bigger than we need, but only on .5 acre. I'm convinced that the only reason we had a chance is because it needs a lot of work, but it's gorgeous so we don't care. 150yo Italianate Victorian.


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## Winegrower (Mar 17, 2022)

$2,800,000 for a 1,500sq. ‘ home in Silicon Valley !!​
Maybe it’s nice inside.


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## Janderso (Mar 17, 2022)

Winegrower said:


> $2,800,000 for a 1,500sq. ‘ home in Silicon Valley !!​
> Maybe it’s nice inside.


Good point!
I’m sure that popcorn ceiling really adds to the ambiance


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## brino (Mar 17, 2022)

matthewsx said:


> Second, financing through non-standard lenders that offered 100 year mortgages. Your kids would be obligated to pay the mortgage long after you were dead, and their kids too.
> 
> Neither option was available to me


How unfair is that!
...it should NOT be available to anyone.
Sure, leave an inheritance if you can and choose to, but NO ONE should be allowed to leave a debt!



682bear said:


> My 23 year old daughter keeps talking about getting her own place, but when she starts checking prices, she decides she'll live with us forever...
> 
> I can't even begin to imagine how difficult it will be for her to start her own life/ family with the high cost of everything now...
> 
> ...


Bear, you have summed up my (and my sons) current situation here too.
Two sons, both have graduated university, both now have good jobs and are living with us!

I know they do not want to still be here, and they they deserve to "spread their wings".
No hard feelings; I will really miss them when they do leave, I am in no rush for them to leave and want them to be able to save up a down payment, but I also really don't want them to buy a $500K house that's really only worth $300K, at best.

It's tough to offer any advice to them when they live in such a different world than I did at their age.......

Brian


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## Janderso (Mar 17, 2022)

brino said:


> How unfair is that!
> ...it should NOT be available to anyone.
> Sure, leave an inheritance if you can and choose to, but NO ONE should be allowed to leave a debt!
> 
> ...


My wife and I bought a timeshare 25 years ago. It’s in Mexico with five star accommodations in Cabo, Loreto, Puerto Vallarta and some other place.
The annual maintenance fees started out at $300 a year, now they are over 1,200 a year.
We have five years to go.
We have used it and have great memories but when we went to our annual update meeting, they wanted us to extend the contract fifty years.
We looked at each other and laughed. I said to the guy, who is so stupid as to pass on an ever increasing liability to their trust so the family has to pay an unknown future liability.
I told him he needs to get another angle because this one makes no sense.
We walked.


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## matthewsx (Mar 17, 2022)

brino said:


> How unfair is that!
> ...it should NOT be available to anyone.
> Sure, leave an inheritance if you can and choose to, but NO ONE should be allowed to leave a debt!
> 
> ...


China is a very different place and culture than North America.


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## Craig1514 (Mar 18, 2022)

Janderso said:


> Are wages really low?
> A working man's home in Northern CA, where I live is around $350-$400,000.
> The closer you get to the bay area prices sky rocket.
> Even in Sacramento property has really gone up.


Generally they are fairly low, as is the cost of living.  I worked for FedEx so my compensation was decent.  I live about 40 miles from Memphis TN.  A million here will buy a nice 6000 sq ft house on 60-70 acres. I have 3 acres, about 2400 sq ft, it’s probably a little north of 100K in value.  People seem nice generally. It wasn’t my dream, but i feel blessed.


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## erikmannie (Mar 18, 2022)

A 500 square foot home on Duncan Dr. in Monte Rio, CA just sold for $900,000.00. Believe it or not, it is a bit of a fixer upper.

The real estate agent said that people are taking their money out of the stock market, & using the money to buy houses to rent on Airbnb.


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## Janderso (Mar 18, 2022)

Well, I guess home is where you hang your hat


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