Income needed to buy a Bay Area home has doubled since 2012

The income needed to buy a median-priced home in the Bay Area has more than doubled since 2012.

That striking bit of news comes from a second-quarter report by the California Association of Realtors. It shows that a minimum income of $90,370 was required five years ago to purchase a median-priced single-family home of $447,970 in the nine-county Bay Area. Today, in the wake of substantial job growth, particularly in the tech industry, the minimum necessary income has climbed to $179,390 while the median price has ratcheted up to $895,000 for the region.

But while that $179,390 might get you something in Alameda County (where the median home price is $880,000) or Solano County ($412,000), it’s not likely to get you anything in San Francisco ($1,450,000), San Mateo County ($1,469,000) or Santa Clara County ($1,183,440).

The state’s least affordable counties were San Francisco (where only 12 percent of buyers could afford a median-priced single-family home), San Mateo (14 percent) and Santa Barbara (16 percent), followed by Marin, Santa Clara and Santa Cruz (all 17 percent). In Alameda County, 19 percent of buyers could afford a median-priced home, compared with 31 percent in Contra Costa County.

The report shows that the housing crisis has become a statewide phenomenon, with affordability hard to come by anywhere.

California buyers needed a minimum annual income of $110,890 to qualify for a single-family home priced at $553,260, the statewide median in the second quarter of 2017. Compare that to the first quarter of 2012, when a minimum income of $56,320 was needed to purchase a home priced at $279,190, the median at the time.

The monthly payment on a median-priced, single family home in California in the second quarter — including taxes and insurance on a 30-year fixed-rate loan — was $2,770, assuming a 20 percent down payment and an effective composite interest rate of 4.09 percent.

The second-quarter report adds that 29 percent of California households could afford to buy a $553,260 median-priced home — down from 32 percent in the first quarter. The percentage of buyers able to swing a deal for condos and townhomes was higher — 38 percent — as those homes have a lower median price of $443,400.

The state’s most affordable counties were Tehama (57 percent of buyers there could afford a median-priced single-family home), Kern (54 percent), Sutter (53 percent) and Kings and Tulare (52 percent).

Article source: http://www.mercurynews.com/2017/08/11/bay-area-real-estate-to-buy-a-median-priced-home-you-now-need-income-over-179000/

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Bay Area real estate: To buy a median priced home, you now need income over $179000

The income needed to buy a median-priced home in the Bay Area has more than doubled since 2012.

That striking bit of news comes from a second-quarter report by the California Association of Realtors. It shows that a minimum income of $90,370 was required five years ago to purchase a median-priced single-family home of $447,970 in the nine-county Bay Area. Today, in the wake of substantial job growth, particularly in the tech industry, the minimum necessary income has climbed to $179,390 while the median price has ratcheted up to $895,000 for the region.

But while that $179,390 might get you something in Alameda County (where the median home price is $880,000) or Solano County ($412,000), it’s not likely to get you anything in San Francisco ($1,450,000), San Mateo County ($1,469,000) or Santa Clara County ($1,183,440).

The state’s least affordable counties were San Francisco (where only 12 percent of buyers could afford a median-priced single-family home), San Mateo (14 percent) and Santa Barbara (16 percent), followed by Marin, Santa Clara and Santa Cruz (all 17 percent). In Alameda County, 19 percent of buyers could afford a median-priced home, compared with 31 percent in Contra Costa County.

The report shows that the housing crisis has become a statewide phenomenon, with affordability hard to come by anywhere.

California buyers needed a minimum annual income of $110,890 to qualify for a single-family home priced at $553,260, the statewide median in the second quarter of 2017. Compare that to the first quarter of 2012, when a minimum income of $56,320 was needed to purchase a home priced at $279,190, the median at the time.

The monthly payment on a median-priced, single family home in California in the second quarter — including taxes and insurance on a 30-year fixed-rate loan — was $2,770, assuming a 20 percent down payment and an effective composite interest rate of 4.09 percent.

The second-quarter report adds that 29 percent of California households could afford to buy a $553,260 median-priced home — down from 32 percent in the first quarter. The percentage of buyers able to swing a deal for condos and townhomes was higher — 38 percent — as those homes have a lower median price of $443,400.

The state’s most affordable counties were Tehama (57 percent of buyers there could afford a median-priced single-family home), Kern (54 percent), Sutter (53 percent) and Kings and Tulare (52 percent).

Article source: http://www.mercurynews.com/2017/08/11/bay-area-real-estate-to-buy-a-median-priced-home-you-now-need-income-over-179000/

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Rich SF residents get a shock: Someone bought their street

Rich SF residents get a shock: Someone bought their street



August 7, 2017
Updated: August 9, 2017 7:21am

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Thanks to a little-noticed auction sale, a South Bay couple are the proud owners of one of the most exclusive streets in San Francisco — and they’re looking for ways to make their purchase pay.

Tina Lam and Michael Cheng snatched up Presidio Terrace — the block-long, private oval street lined by 35 megamillion-dollar mansions — for $90,000 and change in a city-run auction stemming from an unpaid tax bill. They outlasted several other bidders.


Now they’re looking to cash in — maybe by charging the residents of those mansions to park on their own private street.

More by Matier Ross

Those residents value their privacy — and their exclusivity. Past homeowners have included Sen. Dianne Feinstein and her financier husband, Richard Blum; House Democratic leader Nancy Pelosi; and the late Mayor Joseph Alioto. A guard is stationed round the clock at the stone-gate entrance to the street to keep the curious away.

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So imagine the residents’ surprise when San Jose residents Cheng and Lam wound up with the street, its sidewalks and every other bit of “common ground” in the private development that has been managed by the homeowners since at least 1905. That includes a string of well-coiffed garden islands, palm trees and other greenery that enhance the gated and guarded community at the end of Washington Street, just off Arguello Boulevard and down the hill from the Presidio.

“We just got lucky,”said Cheng, a real estate investor.

The homeowners, however, are crying foul and want the Board of Supervisors to negate the sale.

The couple’s purchase appears to be the culmination of a comedy of errors involving a $14-a-year property tax bill that the homeowners association failed to pay for three decades. It’s something that the owners of all 181 private streets in San Francisco are obliged to do.

In a letter to the city last month, Scott Emblidge, the attorney for the Presidio Homeowners Association, said the group had failed to pay up because its tax bill was being mailed to the Kearny Street address used by an accountant who hadn’t worked for the homeowners since the 1980s.

e78d3 460x1240 Rich SF residents get a shock: Someone bought their street

Two years ago, the city’s tax office put the property up for sale in an online auction, seeking to recover $994 in unpaid back taxes, penalties and interest. Cheng and Lam, trawling for real estate opportunities in the city, pounced on the offer — snatching up the parcel with a $90,100 bid, sight unseen.

Since the purchase in April 2015, the couple have been quietly sitting on the property, talking to a number of land-use attorneys to explore their options.

“We were looking to get title insurance so it could be marketable,” Cheng said.

He and his wife see plenty of financial opportunity — especially from the 120 parking spaces on the street that they now control.

“We could charge a reasonable rent on it,” Cheng said.

And if the Presidio Terrace residents aren’t interested in paying for parking privileges, perhaps some of their neighbors outside the gates — in a city where parking is at a premium — would be.

Unsurprisingly, the residents were more than a little upset when they belatedly found out what had happened.

They didn’t learn that their street and sidewalks had been sold until they were contacted May 30 by a title search company working on behalf of Cheng and Lam, said Emblidge. The title search outfit wanted to know if the residents had any interest in buying back the property from the couple, the lawyer said.

“I was shocked to learn this could happen, and am deeply troubled that anyone would choose to take advantage of the situation and buy our street and sidewalks,” said one homeowner, who asked not to be named because of pending litigation.

Last month, the homeowners petitioned the Board of Supervisors for a hearing to rescind the tax sale. The board has scheduled a hearing for October.

In addition, the homeowners association has sued the couple and the city, seeking to block Cheng and Lam from selling the street to anyone while the city appeal is pending — a move residents fear could complicate their efforts to reclaim the land.

The residents say the city had an obligation to post a notice in Presidio Terrace notifying neighbors of the pending auction back in 2015 — something that “would have been simple and inexpensive for the city to accomplish.”

Treasurer-Tax Collector Jose Cisneros’ office says the city did what the law requires.

“Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time — and they keep their mailing address up to date,” said spokeswoman Amanda Fried.

“There is nothing that our office can do” about the sale now, she added.

Fried said that as far as she knows, the Board of Supervisors “has never done a hearing of rescission” — and that because it’s been more than two years since Cheng and Lam bought the property, it could be tough to overturn the sale now.

As for the threat to charge them for parking, the residents suspect it’s part of a pressure campaign by the couple to force the homeowners association to shell out big bucks to buy back the street.

The couple, however, say they’re in no hurry to sell.

“I’m a first-generation immigrant, and the first time I came to San Francisco I fell in love with the city,” said Lam, an engineer in Silicon Valley who was born in Hong Kong and came to the U.S. for college.

“I really just wanted to own something in San Francisco because of my affinity for the city,” Lam said.

There’s a bit of irony in the couple’s purchase. Until a 1948 U.S. Supreme Court ruling banning the enforcement of racial covenants, homes in Presidio Terrace could be purchased only by whites.

“The more we dug into this,” said the Taiwan-born Cheng, “the more interesting it got.”

San Francisco Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or email matierandross@sfchronicle.com. Twitter: @matierandross

Article source: http://www.sfchronicle.com/bayarea/matier-ross/article/Rich-SF-residents-get-a-shock-Someone-bought-11738236.php

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Fed up with housing prices, Bay Area buyers look to Sacramento and Seattle

Overwhelmed by traffic and the steady climb of housing costs, potential homebuyers in the Bay Area are setting their sights on other markets, especially Sacramento and Seattle.

Analyzing 75 housing markets across the U.S., a new report by Redfin finds that the San Francisco metropolitan area — defined to include San Jose and Oakland — tops the list for having the most online searchers considering a move away from the metro area where they live.

New York is second on the list, followed by Los Angeles and Washington, D.C., as ranked by the brokerage’s “Migration Report” for the second quarter. It indicates that homebuyers increasingly are looking to leave expensive coastal cities in search of affordability.

The report — based on a sampling of more than one million users of the Redfin website — adds data to the body of evidence indicating that many Bay Area residents have had enough. In March, the Bay Area Council released a poll showing that 40 percent of the region’s residents said they want to move away in the next few years, a jump up from the 33 percent who said they wanted to leave a year earlier.

Redfin reported that San Francisco house hunters — faced with a median sale price of $1.25 million — most commonly look to Sacramento, where the median has been climbing, but still feels like a bargain: $376,000. The most common out-of-state destination for Bay Area residents is Seattle.

For homeowners in Los Angeles, the most common destination is San Diego — or Las Vegas, for those looking to leave the state.

Conversely, San Diego registered the greatest “net inflow” of Redfin’s online users, with the largest concentration of searches launched there by potential buyers from Los Angeles. Second on the list for “net inflow” was Sacramento, with a preponderance of searches there launched by buyers now living in the Bay Area.

The Bay Area is also the top point of origin for searches by out-of-towners looking to live in Austin, Texas, a growing tech hub where home prices may be going up but remain affordable, at least by Bay Area standards.

Taylor Marr, a data scientist who worked on the report, cited “strong buyer demand and competition in mid-tier cities” including Phoenix, Atlanta and Sacramento.

The report also noted that Chicago, Boston and Seattle have the highest share of residents looking to stay in their current metro areas.

Article source: http://www.mercurynews.com/2017/08/10/fed-up-with-housing-prices-bay-area-buyers-look-to-sacramento-and-seattle/

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Letters: Plan Bay Area absent from housing crisis complaints



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“The big lie about California’s housing crisis,”
In My View, July 27


Plan Bay Area absent from housing crisis complaints

Deepa Varma’s editorial is long on complaints about huge rent increases, evictions and lack of affordability. But it does not expose the actual cause of the so-called housing crisis — mainly, the role of the Plan Bay Area Redevelopment program.

Plan Bay Area is a little-known government-sponsored scheme aimed at the replacement of low-rise, low-income neighborhoods with high-rise, high-income residents — and a dramatic increase in tax revenue. The current trend of evictions, displacement and gentrification is the direct result of the plan and it is rightly seen as a deliberate act of socio-economic cleansing of The City.

Interestingly, Plan Bay Area (and other redevelopment programs throughout the U.S.) are based on the 2005 U.S. Supreme Court ruling “Kelo vs. New London Connecticut,” which allowed the city to declare a particular low-income neighborhood as a form of “blight” and bring condemnation proceedings against the property. Developers were then eligible for government subsidies to build high-end housing and other amenities. However, Plan Bay Area also provides subsidies for developers who build expensive apartments and other commercial ventures, thereby gentrifying the affected neighborhoods and increasing the property tax base.

Older neighborhoods in The City (such as the Mission and the South of Market area) are a prime example of redevelopment gone wrong with low- and middle-income residents being forced out in order to make way for expensive homes and luxury amenities. Although Plan Bay Area is now affecting mostly low-income residents, it’s gradually burning its way up through the middle class and eventually no one will be safe from this noxious program. Putting things in perspective, the housing conditions in the Bay Area are already beginning to look like a third-world country with thousands of impoverished people living on the streets.

Plan Bay Area is being aggressively promoted by the real estate industry (and also a plethora of building trade unions, engineering consultants and contractors) who heavily lobby Sacramento and Washington for legislation (and loads of funding) to promote open-ended construction. The government is also major beneficiary of Plan Bay Area because vast amounts of low-value properties can then become prime real estate which also yield much higher tax revenue.

Plan Bay Area is the “big lie” about the housing crisis and it must be thoroughly exposed before the rental market can be stabilized. However, in the long run, we will need a state wide ballot initiative to abolish this insidious redevelopment scheme altogether.

Galen L. Dutch
San Francisco

Lacking supply is root of problem

Despite bold claims, there was little truth in Deepa Varma’s recent piece on the housing crisis. The state’s epic affordability crisis stems from our historic inability to produce housing to meet the need.

Countless studies, including by the Legislative Analyst’s Office, President Obama’s White House and McKinsey Global Institute, all conclude that lack of supply is the root problem. State housing officials estimate that California under produces housing by 100,000 units annually, on top of an already massive shortfall that has been decades in the making. With such limited supply, rents and home prices soar, pushing people to the outskirts of our region where housing is affordable and commutes are horrendous.

Varma is also wrong that rent control, which doesn’t produce a single unit of new housing, can address the problem at a structural level. A national survey of economists found that only 1 percent of respondents believed that rent controls had a positive impact on housing affordability, 4 percent were unsure, and 95 percent disagreed or strongly disagreed with the premise.

To address our housing crisis, we must bring down cost to build and remove the onerous regulations stifling housing. That’s the truth.

Rachele Trigueros
Policy Manager
Bay Area Council

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Article source: http://www.sfexaminer.com/letters-plan-bay-area-absent-housing-crisis-complaints/

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