Exodus: For Bay Area millennials, moving up means moving out

While some of their 20-something friends burned through their
paychecks, Brian and Jen Hurst saved.

The young couple skipped fancy vacations, ordered appetizers for
dinner on date nights, and lived with roommates to scrape up nearly
$150,000 for a down payment on a home.

After four, tight-belted years, the couple bought a modest
two-bedroom in East San Jose for $700,000 in late 2016. They
continued to juggle several jobs to make ends met and fix the home
up for the family they hoped to start. Two-and-a-half years later,
the Hursts put a “For Sale” sign up in their yard. Exhausted,
they were done with the Bay Area.

“I’m working at 150 percent,” said Jen, a bio-chemist,
“to be lower middle class.”

More than 6 in 10 Bay Area residents under 30 said in a recent
poll they expect to leave the Bay Area in the
next few years. Millennials are the most likely age group to say
they’re leaving, with 55 percent of those under 40 looking to
escape, according to the poll conducted in February by the Silicon
Valley Leadership Group and this news organization.

It’s a trend that sets off alarms for regional leaders,
watching the lifeblood of new workers drain to other regions and
states.

“The Bay Area is increasingly becoming a place unaffordable to
the children of NIMBY parents, who have blocked the approvals of
new homes that lock out our own sons and daughters from being able
to live in the communities in which we raised them,” said Silicon
Valley Leadership Group CEO Carl Guardino, noting the state has a
deficit of 3.5 million homes.

Long-time residents also are losing hope that their children and
grandchildren will be just a Sunday drive away during their
retirement.

Gail Price, a Palo Alto retiree and former city councilmember,
recently watched her youngest son move from the Bay Area to
Portland because of high housing costs. She and her husband had
hoped to keep their three sons and grandchildren in the Bay Area,
but only one has been able to stay. “Not everyone is part of the
one percent,” Price said. “A sustainable community is one that
is inclusive.”

The Bay Area is still a net-importer of residents drawn by a
booming economy, a tech culture obsessed with younger, cheaper
employees, and a buzzing nightlife in three major cities.

But a smothering combination of high rents, higher home prices,
and expensive food and clothing make it difficult to save and plan
for a future in the region. Fewer young people are buying
increasingly expensive real estate: home ownership for Californians
under 35 dropped from 30 to 23 percent between 2005 and 2017,
according to the California Association of Realtors.

The rental market has soared, too. Since May 2014, the average
rent for a one-bedroom apartment has risen 22 percent to $2,120 a
month in San Jose, increased 11 percent to $2,469 in San Francisco,
and grown 15 percent to $1,773 in Oakland, according to Apartment
List.

Even without consulting a spreadsheet, many young professionals
now say their future is elsewhere.

Javier De La Cruz, 27, lives in Pittsburg and works as a
financial center manager in Moraga. He and his wife, Michelle,
graduated from Pittsburg High School and earned associate degrees
from nearby Los Medanos College.

The young couple is starting a family and want to stay close to
their parents. But it’s become nearly impossible, De La Cruz
said. Over the last three years, he’s bid on 15 houses in
Pittsburg and surrounding cities. He lost every single time. “I
was looking for something that didn’t soak up every single
cent,” he said.

They carpool to work, trade date nights for home cooking and
Netflix, and someday hope to have enough for a down payment on a
house. “It really feels like a revolving door that never
stops,” he said.

De La Cruz is looking to Las Vegas — a short flight from the
Bay Area for relatives, with a healthy economy and cheaper homes.
His family doesn’t want him to move. “Everything we know is
here,” De La Cruz said. “It’s a tough decision for both of
us. But we have to do something.”

Higher prices have meant more adult children living with their
parents. In 2017, roughly 36 percent of Silicon Valley adults
between the ages of 18 and 34 lived with their parents, according
to an analysis by Joint Venture Silicon Valley.

Alex Melendrez, 26, grew up in San Bruno in the home his parents
bought nearly 40 years ago, when his father, a cook, and mother, a
waitress, scrounged enough money together for a down payment on a
three-bedroom, two-bath house.

Melendrez lived at home while he earned his political science
degree from UC Berkeley. Five years later, he lives in the same
room, paying $500 a month in rent to stay with his parents, two
adult sisters and a two-year-old nephew.

He’s looked at a few rooms for rent, but they would eat up at
least two-thirds of his income as an organizer for the Housing
Leadership Council of San Mateo County. “Oh God, I honestly have
no prospect of owning a home,” he said. “I cannot see owning my
own place here. Even a condo.”

Like Melendrez, many stick around, despite the uncertainty.

Ryan Globus grew up in Santa Cruz and earned his computer
science degree from Stanford. For his senior project, he and a few
classmates designed a program to scrape desirable Craig’s List
rental listings and have the results sent to their inbox. He got an
A in the course.

Globus said most of his college friends worried about finding a
decent Bay Area apartment. He spent a summer in Palo Alto with four
roommates, a group assembled by an off-site landlord. The tenants
barely spoke and he’s not sure they ever knew each others’
names. “In hindsight,” he said, “it was kind of weird.”

Globus, 27, is a software engineer at Apple, and now feels
fortunate to rent a two-bedroom home in Palo Alto with his husband
and a roommate.

Many days, he dream-surfs Trulia for homes in Philadelphia,
Sacramento and Austin, Texas. But he still wants to be in the Bay
Area to help his aging parents. “I hope I’m still here,”
Globus said. “I want to be here.”

But the parting can be sweet sorrow — if it’s timed
right.

Brian, 29, and Jen Hurst, 28, grew up and went to college on the
Peninsula. Their families still live in San Jose and Santa
Cruz.

Yet living in the Bay Area has taken its toll, and the couple
believes the stress of working multiple jobs — in addition to
their full-time jobs, the couple runs a summer science camp — has
contributed to debilitating health problems.

They rarely went out, lived with Brian’s parents in college,
and then several roommates in a Santa Clara townhome. They scraped
together about $150,000 and made the 20 percent down payment on
their home in the East San Jose foothills in late 2016.

When they moved in, they thought the house would be their home
for decades — expanded and improved, to fill with family, pets
and memories.  “We were 100 percent sure,” Jen said. “We
never thought we would ever move.”

But the property tax bills and maintenance had the couple
continuing their penny-pinching. They vacationed one week a year
and asked relatives for gift cards for their birthdays and
Christmas. They continued to spend on the house, not their lives,
they said.

He informally surveyed about 40 friends and found only one or
two planning to stay here. “In the last few years,” he said,
“we’ve really hit a wall.”

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The Hursts sold their home on Pepper Tree Lane for $930,000 and are
moving near Spokane, Wa., where other Bay Area friends have
moved.  The couple is building a 3,200-square foot custom home,
with a big lot for their golden retriever, Buddy.

They sold the house in June, less than three years after they
bought it. For the next month, they’ll teach summer camp and live
with Jen’s parents. In August, they’ll pack up their new RV,
take a long vacation and leave the Bay Area for good.

Source: FS – All – Real Estate News 1
Exodus: For Bay Area millennials, moving up means moving out