Where is a good place to live in "San Fran"?

Over the last few year, countless number of my friends moved to the Bay Area. Once in a while someone would ask me "where is a good place to live in San Fran?" (it's funny that people in LA thinks the entire Bay Area is called San Fran). Even though I'd lived in the Bay Area for 9.5 years (4 in Berkeley, 1 in Emeryville, 1 in Union City, the rest in Sunnyvale), I still feel that I'm not qualified to give advice. So to better help out my LA friends, I started asking my other friends that have been residing in the Bay Area since undergrad. Below are conversational snippets I've had that may be helpful for people [with kids]:

... As for schools district, there aren't that many in the affordable range. Not sure about you, the entire Palo Alto, Los Altos, Los Gatos, Saratoga, most of Cupertino, the good part of Mt View and Sunnyvale are out of reach for me.  Unless you want to spend 500k-700k for a townhouse ~1200 sq ft, then you will have plenty of options. There are plenty of 600k-700k townhouses in Sunnyvale, Mt View and even Palo Alto. But one thing you need to know is condos/townhomes don't appreciate much. That is why people live single family home and that's why they are $1M for 1500sqft and 80 yrs old. It is what it is, can't fight it... 

SF, Burlingame, San Mateo, Redwood Shores are expensive without good schools. Yeah, people who already bought homes in these areas get pissed whenever I say this. Just look at the list. Alameda, Contra Costa, SF, and Kern (and sorry to tell you this Kevin, LA also) are rated amongst the worst. 

That gives you Fremont Mission, Fremont Warmsprings, SJ Almaden, SJ Evergreen that are still reasonably close to the Silicon Valley. I am sure they have places that are nicer and places that are worse. Mission is just as expensive as Sunnyvale, but you get slightly better home. Evergreen is a steal compare to all of them but the schools are just not as good since there are lots of bad Asians here, their API scores are just not as high yet. Almaden homes tend to be above $1 mil. Evergreen will be about 800K, commute is not as good though. So really, SJ only has two good area, Almaden and parts of Evergreen, the rest can be a dump. Almaden is south of 85, Evergreen is where I stay, south east 101. I think it is just a classic case of grass is greener on the other side. Some areas of SJ can be just as bad as LA.  But the worst place in CA is probably Oakland.  

If you are willing to drive a little to San Ramon, then it is heavenly if you like new houses, open land and open floorplan with lots of upgrades. I personally like walkable places like Berkeley, but lots of my friends with kids are moving to San Ramon. That's basically it, Bay Area is small. Having said that, there are still deals out there... you just need to look harder... Just a warning though, interest rate is super low now. It feels like it is bubbling again.  Some homes went up 30% in 6 months.

There are, of course, some dark sides of Silicon Valley. Not all of it is about Google/Facebook and the glamor associated with technology. Bay Area residents, what do you think?

Home Prices vs. School Ratings

As my son turns 2, we are starting to realize the importance of location. In particular, location will in large determine how good a school/district he will get into. Here are some of the scatter plots I generated. I picked the cities that many of my friends/family live in. I got all the data from Redfin (older Feb 2013 data) and Google Maps. The scatter plot below shows a strong correlation between the $/sqft of home vs the average school rating (taking an average of all the schools in the area, listed on Redfin-- make sure to read the disclaimer below). Note that when taking area into account, there is a big distinct best fit line between the Bay Area and SoCal. BTW the size of the circles throughout the scatter plots below correspond to median home prices:




Below is a similar plot based on the median home price vs average school rating:








I was curious to see how the average number of offers drive up the listing price. For example, does a city with an average of 12.3 offers/home end up with a higher-than-original listing price than the city with average of just 1.5 offer/home? Look at the scatter plot below and judge for yourself (poor Milpitas, with so many competing offers, it is still significantly lower than listing price):




I was curious to see how strong the correlation is between the median price of a home and the $/sqft, and I find it interesting that the more expensive homes also happen to cost more $/sqft. In another word, you can pretty much interchange the median price of a home and the $/sqft on any of the scatter plot here and see very similar results:




Here's the last plot, and let's play devil's advocate here. Countless university grads look at education as a must-spend-at-all-cost expense. But there are many other people who look at education in terms of ROI (return on investment). For example, someone who goes to a vocational school isn't thinking about his career but instead thinking about getting a job. He is trying to justify spending [limited] money on certifications/AA degrees that will hopefully help him get higher paying jobs. Assuming all high school degrees are nearly the same, then degrees from the left side (San Ramon, Simi Valley), are much cheaper than degrees from the right side (Palo Alto, Santa Monica).

In another word, nobody ever cares about what elementary, middle, high school you went to... what is the point of bidding up home prices? Why spend so much in Palo Alto when cheaper San Jose homes will give your kids the same degrees? Is the housing rat-race really worth the hype?





Are you still convinced that good school districts are worth every single dime? You may be surprised when you read the Two-Income Trap: Why Middle-Class Parents Are Going Broke by E. Warren. Piaw has a good review on this book as well:


Please share this URL with your friends/family members if this link is useful and/or entertaining. Thanks!


-Kevin



Disclaimers:
I understand there are many flaws to the methodology, including: "a few bad apples ruined my area", a big city will tend to incorporate many other neighboring (and sometimes less desirable) schools, student population is not taken into account, loss of precision in Redfin when they mapped API scores to integer values, typos/mistakes in data entry, so on so forth. I recognize that this blog is subject to all of the above problems and more, and that they need to be addressed to make a more accurate report.

On the side, I find it interesting to hear a lot of strong emotion-based criticisms about my "research", as if a lower score on where a person already invested in becomes a personal attack! All I can say is that everyone has a valid point, so please calm down and take these scatter plots/data with a grain of salt. If you want to see raw data, I've shared it publicly here.