Laid-Off Tech Worker’s Viral Post Exposes Mortgage Challenges On $1.5M Seattle Home
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Big tech has garnered a reputation for offering lavish compensation packages to highly skilled professionals, such as software engineers, as they compete to secure the industry’s top talent.
Why are tech salaries so high?
Big tech salaries started climbing during the dot-com boom of the late 1990s and early 2000s.
This trend accelerated in the late 2000s and early 2010s, as industry juggernauts like Google, Amazon, Apple, and Facebook expanded rapidly and became more profitable, causing their stock prices to soar.
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With the growing demand for skilled tech professionals, such as software engineers, data scientists, and project managers, fierce competition erupted among these companies to attract the best and brightest. In response, they began offering high salaries and attractive benefits packages to lure in top-tier talent.
Since then, high salaries have remained the norm in the industry, reflecting the ongoing need for specialized skills in an ever-evolving digital landscape. According to Comprehensive.io data at the beginning of 2023 published on CNBC, the average pay for a software engineer ranged from $132,000 to $200,000. Product manager roles averaged $130,000 to $197,000. Data scientist roles ranged $154,000 to $212,000
This “gold rush” mentality has been further exacerbated by the high cost of living in tech hubs such as Seattle, San Francisco, and Silicon Valley, making eye-popping salaries seem less like luxuries and more like necessities for those aiming to maintain a comfortable lifestyle amidst soaring housing prices and competitive markets.
The downstream effect of tech layoffs
During the boom period of sky-high stock prices, the dominance of big tech companies created an illusion of job security due to their seemingly limitless resources and continuous expansion. Additionally, the ever-increasing demand for skilled professionals in the tech industry fueled the belief that job opportunities would remain abundant and stable.
But what goes up eventually comes down. Some 1,024 tech companies had layoffs in 2022, according to one report. The same report says 554 companies had layoffs so far in 2023, including many tech giants like Amazon, Meta, Twitter, Twilio, Paypal, Zoom, and more.
Related: 7 Money Issues That Didn’t Exist 50 Years Ago
The fallout from tech layoffs extends beyond the employees themselves, weaving its way through the fabric of local communities. As high earners tighten their belts, consumer spending takes a hit, potentially stalling the economy. Housing markets, once bustling with tech professionals, may experience a decline in demand, resulting in dropping property values and rental rates.
The ripple effect of tech job losses underscores the intricate interdependencies within the broader ecosystem.
A personal perspective on tech layoffs
One Seattle-based tech worker in dire straights illustrated this ripple effect while seeking advice on how to pay their mortgage after being laid off.
The post on tech job community board Team Blind, titled “Laid Off And Can’t Pay Mortage”, went viral on Twiter when posted by the financial account @unusual_whales. According to Twitter’s view counter, the post has received over 5.6M views
Here’s the post:
Last year I bought a 1.5M home in the Queen Anne area in Seattle. My monthly payment is around 8500. The unexpected happened a few months ago and I was laid off my from job (sic) at Meta where I was a staff level engineer. I really need help because I depleted most of my cash in the down payment for my house and I can’t afford the monthly anymore without a job. I’ve applied to more than 50 companies and I’ve put out more than 500 applications but I can’t get an offer for the life of me.
Next month will be the first month I won’t be able to make my mortgage payment and I’m terrified. I’ve thought about selling my house and moving in with friends but I’ve lost so much money in house value I can’t justify it.
Please help me.
What would you do in this situation?
It’s a devastating circumstance for anyone to face, regardless of the city they live in, their profession, or the wisdom behind purchasing an expensive home. Losing a house unexpectedly due to the misfortune of unemployment, after enjoying years of stable and well-paying employment, is a fate no one deserves to go through.
We also don’t know how much money the engineer was making – it could have seemed like a wise place to put down roots at the time.
Empathy is a good starting place. Redfin data reports that the average home price in Seattle’s Queen Anne neighborhood is $1.01M, with a median sale price of $604 per square foot. Redfin also reports that prices in the neighborhood are up a staggering 20% in the last year. However, relocating to a more affordable area isn’t always a viable option, as individuals may face constraints related to family or career commitments.
Related: 5 Ways To Reduce The Stress Of Living Paycheck-To-Paycheck
The reactions to the question on Twitter ranged from constructive advice to judgmental opinions.
One person assumed that the engineer was living house poor, suggested they “would never dream of buying a million dollar home” unless making $450,000 a year. Another advised to an area like Texas where housing is less expensive.
Others said they’d sell the house, using cash from the sale to float living expenses until they’re back on their feet with a new job.
Many offered thoughts on what they would do:
“He should move and rent it. He probably got a good mortgage rate. $8500 with taxes insurance doesn’t seem like a high payment for 1.5mm,” offered one person responding to the thread on Twitter. Many also advised looking into Airbnb, where the house could get over $300 a night.
Another person suggested the situation emphasizes the importance of six to 12 months of cash emergency funds.
Yet another respondent suggested talking to the mortgage lender: “I hope he reaches out to his mortgage company and asks about his options. There might be a modification he can do while he continues his job search. I wish only good things for him and his family.”
Another, claiming to formerly work in foreclosure postponement, offered the following advice: “Call them and tell them what happened, and see if they have any programs you can apply for. They don’t want to take your house as much as you don’t want to lose it.”
Some offered advice to remedy ther person’s unemployment vs. the fate of the house. “This person should go on Upwork or Flex Jobs. Securing a full-time job in a highly skilled field takes 4-6 months at the minimum. Might as well do some consulting till they find another job,” offered another responder.
Others suggested they simply would have avoided this situation with some homespun advice: “Best financial advice my dad ever gave me: ‘You work in a volatile industry – buy 1/2 the house you can afford’ Good pay today doesn’t guarantee good pay tomorrow. Especially in tech.”
Related: 75% Of Homebuyers Are Unprepared For These Unexpected Expenses In First Year Of Owning A House
A happy ending
There appears to be a postive turn of events to this saga – at least for the time being.
According to a screenshot of an update posted on Blind, the original poster claimed to be “in the preliminary stages of locking down a corporate rental at an agreement of 10.5k a month for 8 months.”
That not only covers the monthly mortgage payments on the house, but also nets the poster a much-needed profit while they continue to look for work.
The poster signs off in a show of gratitude, thanking the Blind community for help.
It’s a pretty awesome silver lining. Sometimes when life deals you a bad hand, it just takes a little good old-fashioned outreach to the right community to luck to manifest the right outcome.
What would you do if you were in this person’s shoes?