But then you would be in that midwestern town ... not saying thats bad but it better be what you want. There is a reason the median price in Sunnyvale is already $2.3M. No snow, 300+ days of sun ... running a little low on water tho. Ive lived all over the country and while Central Coast Ca is relatively expensive compared to other places I could never be as happy elsewhere. Edit: Further, I am willing to bet whoever bought the house in Sunnyvale still works (probably a lot). If you buy a $2.3M house in the midwest you aint commuting to a job.

You're casting a very narrow net on what you consider "the midwest" there. I assure you that there are literally millions of people here that both live in $1+ million dollar houses and commute into work every day.

I'm one of them :/

It's like Chicago doesn't exist in the collective conscientious of the east and west coast white collar class. ILL is a dumpster fire of a state, but the COL to quality of life ratio is pretty excellent as far I'm concerned.

Minneapolis, Madison, Milwaukee, Detroit are all fun cities too. I say this as someone who went to college in Boston/NYC and lived all over the Acela corridor and London.

> ILL is a dumpster fire of a state

True, but New York City has a per-capita municipal debt load double Chicago's, Connecticut and New Jersey are really the only two states in more dire financial straits than Illinois and for the pleasure of living back east I get to pay what seems like an order of magnitude more in taxes and housing costs.

And obviously California is California. Loved, loved, loved it when I went to college in Los Angeles but have no real desire to ever work there. Maybe once I make my 50th million I'll be on the next flight out.

Once climate change starts destroying the coasts and warming the interior, we'll see how bad the hick midwest really is :)

> New York City has a per-capita municipal debt load double Chicago's

But also a higher per capita GDP and faster economic growth.

Everyone’s calculation of utility is different, but Chicago/IL land also has a non explicit cost of land prices being held down by expected increases in taxes disproportionate to increases in other parts of the country, due to disproportionate levels of debt per taxpayer.

Instead of your land appreciating by a few hundred thousand, it might only appreciate by a hundred thousand, which is a decent difference in return for many people.

Obviously, that is offset by needing less cash upfront, but it does make the CoL calculations less obvious in favor of Chicago.

Well, I live here because I need a house, not as an investment property. That might be why the housing situation in California is a superfund site and in Chicago I live in an expensive house because I want to.

I do not think it matters if a house is an investment property (i.e. not the house you are living in) versus a house you need (i.e. to live in). My point is the cost of living calculation also involves the opportunity cost of the difference in land price appreciation.

Of course, this opportunity cost only exists if you have the opportunity to choose between two or more locations.

My ROI on the extra million I'd spend has far better returns in the equity markets than even the most broken California real estate markets.

ROI would have to be calculated using the levered amount. Even paying $2.7M cash for this house, you can refinance and take out 80%, and have the $2.7M asset for $540k in a non recourse state with a non callable margin loan. And with capped 2% property tax increases.

Plus you get to live in it. Plus you get CA amenities (value dependent upon individual preferences, but obviously valued very highly amongst people with money). One of those CA amenities is very worker friendly non compete laws and strict limitations on what employers can claim is theirs, a not insignificant benefit for knowledge workers in my opinion.

Ah, but $1 million allows me to borrow upwards of $6.5 million at 0.75 percent from my broker. Real estate allows significant margin for the lower and middle class, but there's literally zero overlap between those people and people buying $2.75 million homes in Sunnyvale. Way better off leveraging your SPX shares than a house.

> Real estate allows significant margin for the lower and middle class, but there's literally zero overlap between those people and people buying $2.75 million homes in Sunnyvale.

People buying $2.75 million homes in Sunnyvale are largely either working (knowledge workers dependent primarily on wage labor) or middle (petit bourgeois; independent business owners and workers with mixed dependency on wage labor and capital investments) class.

I suspected this would be brought up, which is why I tried to pre-empt it by specifying that a home mortgage has special conditions that make it not 1 to 1 comparable to other leveraged investments, such as non callability, non recourse (in California), you get to live in it, and you get to live in that specific location (assuming you value it).

I recognized that, which is why I tried to stick to a high-net worth situation like this particular one.

I'm far better off buying a $300k house than having $60k in investments but those comparisons become a bit more fuzzy at these 7-figure numbers.

I am not so sure. Another benefit of CA real estate is that you can gift it to your kids and not be subject to state estate taxes, and the capped property tax carries forward to your kids.

Popular California land is a very unique asset.

The best benefit to one of these houses in this area is that you have one of these houses in this area. My house isnt an investment but a roof over my head and a good sized yard not far from a very beautiful bay and lots of mountain trails. Its worth more to me than what zillow says.

It exists. But it's viewed as houses in the middle of a cornfield or a decaying steel town, no decent jobs, no culture, lousy weather, etc.

To the last point, there are a lot of people, especially on the West coast who really can't imagine living anywhere with real winters. To be honest, you don't hear much about Boston either although I think it's something like #3 in VC funding and has a lot of tech of various kinds.

>It exists. But it's viewed as houses in the middle of a cornfield or a decaying steel town, no decent jobs, no culture, lousy weather, etc.

Who views it that way? People who have never been there and also know nothing about it? People who have never left California?

I don't actually think anyone -- statistically speaking -- from California views Chicago that way. There is a stereotype of Californians which feels unusually pernicious which I see a lot on HN, generally either from people who have never been to the Bay Area or feel they "escaped" the Bay Area and take every opportunity to tell people that they bought an 8000 square foot mansion for $100K, pay $7.99 a month for 100Gbps internet service, and so on.

I kid, but seriously, many of us have actually been to other cities across the United States and the world and have appreciation for them. There are many places I would be happy in besides the SF Bay Area. I would be able to find friends and good microbreweries and good craft coffee, cocktail bars, interesting cheap restaurants, interesting expensive restaurants, museums, nature hikes, the whole shebang. Some of my absolute favorite examples of each of those are outside the SF Bay Area! It's simply that so far, I haven't found a metro area (at least in the US) that can combine a similar concentration of such places with a comparable climate, tech job market, and markedly cheaper cost of living.

Boston has the combination of yankee hospitality and New Jersey charm, just substitute rotaries for “no left turns”.

It’s also an old place with weird enclaves unknown to outsiders. You may find your lovely townhome is adjacent to a superfund site.

Tech scene in Boston is really huge. It’s a bit less “Facebook for cats” than Silicon Valley and tends to be more stuff that needs the big brains from MIT and the like. Moderna is a great example.

Pharma/biotech is particularly big but look at a magazine like Tech Review and there's a lot of diversity.

In addition to the weather (which really isn't that bad), part of it is I think that a lot of people with SV companies tend to think of tech as "what SV companies do" which naturally leads to them seeing less "tech" in other places. (Though there are sizable outposts of quite a few West coast employers at this point in addition to the home-grown ones.

Tech actually in the city was almost non-existent for a long time. Hence the Route 128 computer companies. But that's shifted a fair bit again over the past 20 years.

> Minneapolis, Madison, Milwaukee, Detroit are all fun cities too

Different ideas of fun abound, but I doubt the people getting nervous at the uptick of crime in California cities are much interested in Detroit and it's second-highest-in-the-nation rate of violent crime.

Fair enough. There are many urban centers in the midwest that are very expensive. But im pretty sure we were not talking about those places. Edit: Also rural centers that are very exclusive (Jackson Hole etc).

Jackson Hole is certainly not in the Midwest. I'm not especially familiar with exclusive rural areas in the Midwest but they may well exist.

Yeah, I couldnt think of any either.

Lake Geneva, Wisconsin?

> There is a reason the median price in Sunnyvale is already $2.3M

Primarily the dire lack of housing and the local politics that keep it from being built.

Granted, you'll always be able to get more land in the midwest, but the lack of homes is a policy choice.

The demand curve of deep pocketed buyers is just as important as the supply curve of housing they want (location, size, quality, etc).

> No snow, 300+ days of sun ... running a little low on water

All reasons I will never live in California. My ideal is four seasons, generous servings of rain and snow throughout the year, ideally never above 60 F, and not worrying about water. I do whatever I can to encourage people to keep flocking to NYC/LA/SF/etc so they stay out of everywhere else

That's cool. To each there own.

Sunnyvale’s in the south SF Bay Area. The central coast is further south and considerably less expensive but also more isolated.

The other thing persistently lowering quality of life all over CA besides water getting scarce and high taxes is the wildfire smoke. There are benefits to CA, but there are definite downsides.

Im not sure what you mean by high taxes. A house in texas comparably priced to mine is almost 3x my property tax and I get the majority of my income tax back. Texas sales tax is like 1% less than in my town. I just dont see it.

>A house in texas comparably priced to mine is almost 3x my property tax

A house in Texas comparably priced to yours is probably 14 acres in central Dallas.

And again, then youd be in Dallas (which has harsher water restrictions than here now). Ive been there, I bought here. Im glad everyone that is there enjoys it tho.

As someone in Dallas, not quite, but your point is still valid :)

NorCal and SoCal are attitudes more than actual points. I consider Monterey Bay to Morro Bay Central Coast. I live 3 miles from Monterey Bay and ~40 from Sunnyvale. Greater area San Jose people seem to consider themselves 'Bay Area' rather than NorCal but it is easy to spot the ones that do consider themselves NorCal.

Yes you are commuting to your job when offices open. Suburbs of the big Midwest cities have lots of 2.3mm+ prices and you work downtown in finance, tech or whatever. Quite a few inner-city houses built by the original rich classes of those cities demand those prices too.

Go where you are happy, spend as much as you want. Sunnyvale is a cultural desert compared to the Twin Cities, Chicago, Detroit. And on its way to being a real desert too.

This particular house is a 15 minute walk or 5 minute bike from the new Apple headquarters as well.

300+ days of sun is awful. I'm not even joking. No seasons, no thanks!

A friend of mine lives in a 2k person town in Wisconsin, about a 30min drive from Madison. The house next to his is on the market for ~$100k (3 bed room, in need of some maintenance).

It some ways it's unreal that a house can be that cheap, but considering that I'm not even buying at that price is probably the reason why its that cheap.

It's not the house but the land. I've seen rundown shacks where I am sell for $1.5m because they're nice allotment size against a large lake. New owners knockdown the shack and put up a new build.

When I had a house in Claremont, CA I often found myself traveling a lot. I used to play the "what will my house buy here?" game. Invariably it was always something much nicer, but I liked living in Claremont. I lost that house to unemployment in the 90s recession/housing market crash. Every so often I'll look at it on redfin. It's been improved a fair amount since then, but not so much that it seems like it's really worth 5 times what I paid for it in the 90s.

Are you accounting for the currency being worth less per unit than in the 90s?

From https://www.usinflationcalculator.com I get that the value of the house should have increased by 92.4% from the purchase price in 1993. The last sale (four months ago) was up by 438%¹. It gets worse if I go from the sale price in 1997 where inflation shows 73.2% but the increase was 525%

⸻⸻⸻

1. To be explicit, the house sold for 5.48× more than the purchase price.

Salary differences are huge, though. I recently got an offer for a $100k perm. raise + relocation benefit on top of that to move to Mountain View - and I'm not in a cheap city. My current company as well, if you move somewhere cheaper in the current remote work environment, they cut your salary.

The house in question in the article is in Sunnyvale, so it's entirely possible that the closest fine dining is ... "Chili's".

I love the Bay Area, but suburbs are suburbs.

Edit: I checked; it's not quite the closest "fine dining", but there actually is one a short walk away =)

You can do a lot better than Chilis. There’s a huge variety of dining options in and around the South Bay, some of them on the higher end. I think the question is more whether the Chili’s is the only game in town or whether you have options that aren’t Chili’s or fast food.

Having lived in Sunnyvale for a bunch of years, this is just not true. Heck, there’s more than one Michelin starred restaurant with tasting menus well above $100 a head in the South Bay (Manresa, Baume, and Chez TJ).

How is it "just not true"? There are literally a couple Chili's (and plenty of TGIF's and other similar places) within a couple miles of the house in question. The fact that there are _also_ some real nice places doesn't change that (also, my wife and I literally fell asleep while eating at Chez TJ. One of my worst meals ever. Baumé is superb, however.)

The Bay Area isn't uniquely bad. It just isn't uniquely great either. It's a nice place to live. So are lots of other places. There are some great restaurants. There are some great restaurants in other suburbs, too.

I mean, surely there are shitty chain restaurants even in food meccas like NYC. Maybe I misunderstood what you were trying to say here.

There are many excellent Korean, Chinese, Indian, Japanese, mid eastern, etc. restaurants all around.

Yes, absolutely. Gochi is one of my favorite lunch spots, and a short walk away. This is also true for every college town in the rest of the country. The Bay Area isn't magic.

With the money you saved you could also buy a house in India, Korea and China.

A very good point but el camino leads to koreatown or the city so hopefully you have a car or enjoy the bus/train. That road is terrifying on a bike tho.

Don't need to go to Koreatown for a good meal. Gochi and Orenchi Ramen are both within walking distance. Also a few good dim sum options there.

Have you ever actually visited the midwest or are all your negative stereotypes based completely on the casually accepted discriminatory comments you've read online?

To answer your question- people of color would be treated identically to white people. You do realize the racial history of the midwest is safehouses for the underground railroad and soldiers for the Union army during the civil war right? And that Iowa legalized gay marriage years before California.

There are good and bad people everywhere, smart and dumb people everywhere. Negative stereotypes based on city, state or region are just as bigoted as any other stereotypes.

Chicago had the first LGBT-friendly community in the United States. They were out and proud long before Stonewall. Illinois was the first state in the country to repeal its (unenforced) sodomy laws.

California, on the other hand, elected Ronald Reagan as governor in order to "send the welfare bums back to work" and then re-elected him because they loved that he banned black people from carrying guns.

Yeah - so this same list can be marked true for places in and around HCOL areas of CA, NY, Insert any other "desirable location." Your sentiment towards the Midwest is de-constructive.

No, not any worse than they would wherever you're at, yes, and no.

There is no "gotcha" to life in the Midwest, the cost of everything in coastal cities is just ridiculous. You don't have to be surrounded by luddites and people who hate minorities to buy a house for less than $2.6 million.

For that matter, while a city like Boston in the Northeast is expensive, you can drive or take a train less than an hour and be in towns where there are decent houses to be had for a few hundred thousand dollars. (Yes, there are expensive towns too.)

Is that your perception of the entirety of the midwest? California isn't just Tesla driving, hoodie wearing, tech types.

BRB, going to meet a friend for lunch at Chili's.

If you believe this, you must be living in a bubble. This will be akin to someone from the midwest not wanting to move to California because of drug-loving hippies. It's kinda a gross generalization.

Honest advice, you should probably take a break from the media.

This won't age well.

That's a little hyperbolic... some places in the midwest can be outright hostile towards certain types of people. That's a completely legitimate concern regardless of political affiliation.

I think you're being flippant, which generally contributes to the same problem you're trying to highlight.

Nobody ever drove by my house with a PA in their pickup shouting homophobic slurs when I lived in the Bay Area. That was a plus.

Haven't you heard? Conservatives are the only oppressed people in America.

Those damned progressives really need to stop oppressing the conservative freedom to oppress others. /s