Hrvatski
Written by: Kate Matijaca Hrga
My name is Kate Matijaca Hrga, and I live in San Mateo, California, which is part of the San Francisco Bay Area, about 20 minutes from downtown San Francisco. San Mateo County has a population of approximately 750,000, while the entire Bay Area is home to around 6.5 million people.
I was born and raised in Split, Croatia, and moved here in my early twenties, about 17 years ago, after meeting my husband. My husband, Marko, has Croatian roots but was born and raised in California. He works as a stationary engineer at the University of California, San Francisco (UCSF), while I currently stay at home and take care of our two sons, Toni and Marin.
Life in California is much faster-paced than in Croatia. It is a multicultural region where people from all over the world live together. As a foreigner myself, I felt welcome from my very first day. When I first arrived in California, I experienced quite a cultural shock. I still remember thinking that everything was oversized—huge highways, large cars and trucks, spacious homes, towering buildings, expansive parks, enormous schools and universities, and massive hotels.
Another vivid memory from my early days in the United States was the food. Here, you can eat anything, at any time of the day. It took me a while to adjust to the incredible variety of food and overcome the temptation to eat constantly. Interestingly, most Americans do not cook at home. They eat at restaurants or order takeout for nearly every meal, often choosing fast food. This is one of the reasons why obesity is such a common issue. As a true Croatian mother, I prepare home-cooked meals for my family every day, often traditional Croatian dishes. Whenever the aroma of sarma fills the hallway, our neighbors inevitably come by asking what I'm cooking.
The San Francisco Bay Area is one of the wealthiest and most expensive regions in the world, largely because it is home to Silicon Valley—the global center of technology and innovation. It boasts the world's third-highest GDP per capita and is home to many of the world's leading technology companies, including Google, Facebook, Amazon, Apple, and Netflix. As a result, the cost of living is exceptionally high, and property prices are among the highest in the United States.
The San Francisco real estate market is fast-moving, dynamic, and highly competitive. I found some interesting market statistics. On average, homes in San Francisco receive three offers and sell within approximately 29.5 days. During the final quarter of 2020, the median home sale price was approximately USD 1.41 million, representing a 3.8% decrease compared to the previous year. The average residential property price reached around USD 3,700 per square meter in 2020. To afford a home in San Francisco, buyers typically need an annual household income exceeding USD 300,000, while the average annual salary is approximately USD 98,000.
My family owns a two-bedroom apartment of approximately 90 square meters in the center of San Mateo. It is located within a residential community called Woodlake, which covers an area of approximately 120,000 square meters and was built in the mid-1970s. The complex consists of 22 three-story buildings containing 990 residential units. Designed as a full-service residential community, it includes apartment buildings and townhouses organized into five residential clusters, with a shopping center located in the northwest section.
Each residential cluster features shared courtyards and swimming pools. At the heart of the community lies a winding lake with a fountain, surrounded by open lawns, walking paths, benches, and mature trees. The main swimming pool, fitness center, gymnasium, recreation hall, tennis courts, and clubhouse are all situated alongside the lake. Our monthly homeowners' association fee is USD 500, covering electricity, water, waste collection, recycling, and access to all community amenities.
We purchased our apartment in 2005 for USD 465,000, equivalent to approximately USD 5,170 per square meter. We paid a 20% down payment, while the remaining 80% was financed through a mortgage with a 3% interest rate.
Unlike Croatia, there is no property acquisition tax payable at the time of purchase. However, homeowners pay an annual property tax of approximately 1%, divided into two installments due in April and December. In addition, homeowners are required to maintain property insurance. While premiums vary between insurers, the average cost is approximately USD 35 per month for every USD 100,000 of property value.
Today, sixteen years later, our apartment is worth approximately USD 800,000, or about USD 8,900 per square meter—an increase of more than 70%, averaging roughly 5% annual appreciation.
When selling a property, capital gains tax may apply depending on how long you have owned and occupied the property, as well as the amount of profit realized. If you have lived in the property for at least two of the five years preceding the sale, capital gains of up to USD 250,000 are exempt from federal taxation. Married couples filing jointly may exclude up to USD 500,000. California taxes capital gains as ordinary income, with rates reaching 13.3%.
The City of San Francisco also imposes a real estate transfer tax on both residential and commercial property sales. The transfer tax ranges from 0.5% to 2.5%, depending on the property's value, and is typically paid by the seller. Another significant selling expense is the real estate brokerage commission, which is generally 6% of the sale price. As a result, the total cost of selling property in San Francisco typically ranges from 6.5% to 8% or more.
For buyers, closing costs generally amount to 1%–3% of the purchase price. The largest portion usually consists of loan origination and financing fees charged by the mortgage lender.
When buying or selling property in the United States, it is standard practice to work with a licensed real estate agent. Although there is no legal requirement to use an agent, approximately 90% of all residential real estate transactions are completed through real estate brokerages. The standard brokerage commission is 6%, and it is paid entirely by the seller. Buyers do not pay their agent directly. When separate agents represent the buyer and seller, the seller's commission is typically split equally between the two agents.