Blaming a “severe lack of homes for sale and high demand,” the California Association of Realtors (CAR) claims in a report released last week that it now takes almost double the income to qualify to buy a home in California as it did in 2012.
The situation is even worse in the Bay Area.
CAR now recommends “a minimum annual income of $110,890” (before taxes) in order to purchase a single-family home in California selling for the median price of $533,260, based on a $2,770/month mortgage payment after 20 percent down and an interest rate of just over four percent.
That is if buyers stick to the time-honored (but for many unreachable goal) of only paying 30 percent of monthly income to housing. In the Bay Area, the association recommends bringing in $179,390/year, which would come out to nearly $15,000/month.
To put that amazing sum in perspective, computer programmers in the Bay Area are averaging only $106,710/year, according to the Occupational Employment and Wage Estimates from the Bureau of Labor Statistics from May 2016.
Software developers are bringing in about $133,500/year. Cops somewhere around $105,540. And teachers $43,340.
Even more startling, five years ago the recommended income was $90,370. A pretty heavy sum in and of itself—median income nationwide was just over $51,000 that year according the US census—but just about half what it takes today.
These figure depend on CAR’s estimates about median housing prices, of course. The report pegs the average home in San Francisco at $1.45 million, for example.
Earlier in the summer, Paragon Real Estate Group estimated the same price between $1.4 million and $1.5 million, depending on the month. Sites like Trulia and Redfin put it at $1.19 million and $2.24 million respectively, although those aren’t scientific samplings.
- Income To Buy A Home Doubled Since 2012 [Business Times]
- Housing Affordability Report [CAR]
- Cheddar Counter Methodology [MyTrove]
- 2012 Census
- SF Home Up To $1.4 Million [Curbed SF]
- SF Home Costs $1.5 Million [Curbed SF]