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If you’re touring a model home this weekend in Sacramento, chances are the other couple over there, the ones checking out the quartz counters and sizing up the master closet, are not locals.

Emigres from the San Francisco Bay Area will comprise one-third of house hunters in the capital region this summer, real estate analysts predict.

Call it the coastal wave. It started a year ago, and it may be about to peak.

Bay Area residents are inundating Sacramento home developer websites, clicking through floor plans, watching promotional videos and signing up for email blasts, according to Kevin Carson of the New Home Company. His firm is building in El Dorado Hills, downtown Sacramento and Davis.

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“I believe this summer, when the kids get out of school, we are going to see a real increase in Bay Area sales,” he said. “We haven’t really seen the wave hit yet.”

Michael Strech, head of the North State Building Industry Association, said he’s checked with other builders and guesses the one-third figure may be conservative at some new subdivisions.

The reasons are obvious: The median price of a Bay Area home hit $850,000 in April, according to CoreLogic, a real estate data company. That’s a $100,000 increase in one year.

In San Francisco, the median price hit $1.3 million. That often buys no more than a 1,600-square-foot house.

In contrast, the April median sales price for a resale home in Sacramento County was $357,000. And the median for a new home was $433,000.

In an eye-opening Bay Area Council survey this month, 46 percent of Bay Area residents said they want to move out of the region within the next few years. They cite the high cost of living, high housing costs, traffic congestion and homelessness.

By comparison, Sacramento’s sparkling new hillside subdivisions and moderately priced midtown condos are hot property.

Retiree Marie Diaz, 59, of San Jose, is among the emigres. She and her former spouse are selling their home for $2 million after a divorce.

Diaz said she found that she can’t afford another Bay Area house with her portion of the proceeds.

“Prices here are outrageous,” she said. “I can’t afford to live in this area. I’d be in an apartment.”

She bought a home under construction in El Dorado Hills for $525,000. It has the same square footage as her old home, with an outdoor “California Room” and a nearby community clubhouse where she will play bingo and bunco and do yoga.

There’s a Costco, a Sam’s Club, theaters and restaurants just five minutes down the hill in Folsom. It reminds her of the laid-back San Jose she grew up in, before the Silicon Valley era.

Sacramento saw similar surges of Bay Area buyers around 1990 and again around 2004 when coastal housing prices were overheated.

This time, though, local builders are pushing the trend by aggressively marketing Sacramento’s charms in the Bay Area with advertising campaigns on websites, social media, newspapers and radio.

The New Home Company has run “Head for the Hills” and “Beyond The Bay” marketing efforts. It’s pitching its Cannery project in Davis as a commutable location with family-friendly themes, like “Room to Bloom,” and “Good Soil for Family Trees.”

The expected influx of buyers means stiffer competition for the Sacramento region’s still limited supply of new and resale homes. It also means home prices likely will rise again this summer.

Analyst Dean Wehrli of John Burns Real Estate Consulting said his company has projected new home prices here will increase 4.7 percent this year and resale prices will go up 8.2 percent.

But he suspects prices could increase even more, partly due to the push from the Bay.

Some Bay Area residents who cashed out are looking for homes in rarefied price ranges.

Realtor Erin Stumpf has begun showing homes to one such couple, both physicians who landed new jobs here. They plan to sell a 1,700-square-foot Silicon Valley home for about $2.5 million and will look for a Sacramento home in the $1.5 million range, focusing on Sierra Oaks and East Sacramento’s Fab 40s neighborhood.

“They will pay cash here,” Stumpf said. But more Bay Area buyers appear to be exercising “financial prudence,” buying modest homes at the right price, she said. “Not, ‘Hey I’ve got millions of dollars and I want to overspend for a home in Sacramento.’ “

Recent retirees Jan and Dave Sechrist, who worked for Bay Area nonprofit agencies, say they moved here precisely because they are not wealthy. They sold their Dublin home to get out from under a mortgage and had just enough money to buy a $339,000 home in Antelope this month.

They paid the asking price and were the only people to make an offer.

“If it had been higher, we wouldn’t have heard about it,” Sechrist said. “That’s the top of what we could afford.”

Builders say new $500,000 hillside homes south of Highway 50 in Folsom are expected to attract coastal buyers looking for hilly topography, open space and larger lot sizes. Aren Bazzocco of Taylor Morrison, which began building in Folsom this summer, said his company’s initial buyer interest list last month suggested about 30 percent of shoppers will be from the Bay Area.

Other new communities appear to be of less interest to Bay Area buyers.

McKinley Village, an infill community near East Sacramento, is attracting solid interest from local residents who work downtown and want to live close in, but only marginal interest from people outside the region. Homes there go from the $400,000s to more than $1 million with add-ons.

The new Riverchase subdivision in the Southport area of West Sacramento, where starter home prices are in the mid-$300,000s, is also attracting downtown Sacramento workers, but is not high on Bay Area buyers’ shopping lists, builder David Ragland of Anthem United development company said.

In contrast, Ragland predicted up to half of home shoppers this summer at his Reflections at River Islands in Lathrop, near Stockton, could be from the Bay Area. Lathrop is close enough to the South Bay for long-distance commutes. Ragland’s company is advertising in the Bay Area, including on social media.

Many buyers will be retirees. But for those still in the workforce, the economics of a move from the higher-salaried Bay Area to the smaller local economy could be difficult.

“The Bay Area job market is quite an attraction,” said Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific. “It can be a challenge to leave it. We’ll see how it plays out.”

Article source: https://www.sacbee.com/latest-news/article212479984.html

Even as Bay Area tech professionals take home the highest disposable incomes in the country, local service workers have sunk to the bottom with little or no cash left over after living expenses, a new report found.

The region is the worst in the nation for service employees and security workers, according to a new analysis by real estate website Rent Cafe. And child care, maintenance and food service workers have so little money left after paying living expenses that many are forced into debt or sacrifice health care and other needs.

The report paints a stark picture of the divide between the Bay Area’s haves and have-nots and the pressure high housing costs place on the working poor.

“There’s no doubt the economy is strong,” said Michael Altfest, director of community engagement for the Alameda County Community Food Bank. “But what we see here is the low-income community is not sharing in it.”

The report found that in the San Jose metro area, management workers averaged $87,400 in annual disposable income, the highest figure in the country, while service workers fell $10,000 short of meeting basic needs, the worst in the country. The report considered how much money workers had left over after paying for food, shelter, transportation, health insurance and other basic living expenses.

San Francisco and East Bay rank in the top four regions for disposable income for tech and related professions. The cities also ranked among the bottom three for workers in blue collar industries.

“Either these people are hugely in debt or they have to make some huge, huge sacrifices,” said Balazs Szekely, researcher at Rent Cafe.

In the San Francisco and Oakland metro area, 15 of 21 job categories studied were either among the top or bottom 10 in the country for disposable income. San Jose had 14 of 21 job categories at the extremes, Szekely said.

The report found the San Jose metro area was tops in the country in five professional categories: managers, legal workers, business and finance, computer and mathematical fields, and engineers and architects. The average annual disposable income for lawyers was $77,800, for business and financial professionals it was $39,800, and for computer and tech professionals, $62,400.

At the other end of the spectrum, workers in building and grounds maintenance, and personal services fared the worst in the country. The typical maintenance worker in San Jose earned $7,500 less than needed to meet basic needs, while service workers, including child care and personal trainers, came in $10,000 short annually.

In San Francisco and the East Bay, disposable income for police, firefighters and security workers ranked last in the country, with $1,800 left over annually after living expenses. Workers in transportation, food service, maintenance and personal care all fell short of being able to afford basic needs.

The Rent Cafe report analyzed data from the U.S. Bureau of Labor Statistics, federal and state tax rates and cost of living rates calculated by MIT.

Leaders in the nonprofit sector confirm it’s tough and getting tougher for working families.

A report released this week by the National Low Income Housing Coalition found the Bay Area is the most expensive region in the country for renters, with workers needing to make between $45 and $60 an hour to afford apartments.

The high cost of living, driven largely by soaring housing costs, forces lower wage workers to make difficult choices — between medical visits and rent or food, said Marie Bernard, executive director of Sunnyvale Community Services.

About three in four clients at Sunnyvale Community Services are working families, she said. Most of the others are seniors on fixed incomes who are isolated from families.

Often, Bernard said, parents will have three or four jobs and still spend the majority of their income on rent. Families can need four minimum wage jobs to pay for housing, she said.

“It’s important to dispel the myth that folks who need help aren’t working,” Bernard said. “They are trying everything they can to make money.”

Clients of the Alameda County Community Food Bank often sacrifice the quantity and quality of food to make ends meet, Altfest said. The food bank estimates that it serves 1 in 5 Alameda County residents.

The agency has extended hours and distribution because more families are unable to pick up groceries during working hours, he said. “It’s a struggle across the board.”

Article source: https://www.mercurynews.com/2018/06/16/bay-area-report-great-for-tech-professionals-but-worst-for-service-workers/

Despite the Bay Area’s natural beauty and booming job market, nearly half of its residents now want to get out, citing a creeping disillusionment with the high cost of housing.

Forty-six percent of Bay Area residents surveyed said they are likely to move out of the region in the next few years — up from 40 percent last year and 34 percent in 2016, according to a poll released Sunday by business-backed public policy advocacy group the Bay Area Council.

The numbers show a disturbing trend in one of the nation’s most expensive housing markets: Workers desperate for a better quality of life and without housing options will go elsewhere, potentially plunging the region into a financial downturn.

“They couldn’t be more clear what the big problems are — and it is exclusively about the cost of housing,” said John Grubb, chief operating officer for the Bay Area Council. “They don’t see…enough action coming, and so they’re looking at taking matters into their own hands. And unfortunately, what they’re going to take into their hands is the steering wheel of a U-Haul to go somewhere else where there’s a better combination of salary and lower housing costs.”

Bay Area home prices have been climbing for six years, setting another record in April, when the median sale price hit $850,000 — up 13 percent from a year ago, according to real estate data firm CoreLogic. Rents are soaring too, and workers are forced to move farther away to find affordable housing and commute on already crowded Bay Area roads and freeways to get to their jobs.

Meanwhile, recent efforts by policy makers, affordable housing organizations, developers and others apparently have yet to make a dent in residents’ concerns.

The Bay Area Council has thrown its support behind several housing-focused bills that it says will help, including SB 831, which eliminates some fees for building in-law units; SB 1227, intended to increase the supply of affordable student housing; and SB 828, which would force cities to rezone land to allow more homes to be built.

Researchers have been worrying about the Bay Area exodus for some time. A recent report from Joint Venture Silicon Valley found more people left Silicon Valley in both 2016 and 2017 than in any year since 2006. Still, Silicon Valley is gaining more residents than it’s losing — the region welcomed 44,732 newcomers between July 2015 and July 2017, and lost 44,102. But the ominous new data from the Bay Area Council suggests that could change quickly, as the out-migration shows no sign of slowing down.

When asked to pinpoint the most important problem facing the Bay Area, 42 percent of those surveyed said housing — a dramatic jump from 28 percent last year. Meanwhile, 18 percent said traffic and congestion, 14 percent cited poverty and homelessness, and 12 percent said the cost of living.

Those problems spell serious disillusionment for Bay Area residents. Fifty-five percent of residents polled said they feel the Bay Area has “gotten pretty seriously off on the wrong track,” compared to 42 percent last year.

“It’s so expensive,” said 38-year-old software engineer Travis Dobbs, who moved his family from Berkeley to Portland last year. “My wife and I both make good money, relatively speaking, and we can’t afford a house there.”

VIDEO: A different poll conducted for the Silicon Valley Leadership Group and this news organization also found that more than one-third of Bay Area apartment renters and one-quarter of residents in their 20s and 30s say they are struggling to afford their housing.

Of those who are likely to move out in the near future, 24 percent of the 1,000 registered voters surveyed in the nine-county Bay Area said they plan to stay in California, including 5 percent who said they would head to Sacramento. Texas, Oregon and Nevada were the most popular out-of-state destinations, capturing 10 percent, 9 percent and 8 percent of potential movers, respectively.

Over the past two or three years, Sacramento-based real estate agent Craig Diez has been flooded with Bay Area residents interested in relocating to his town. He estimates they now make up a quarter of his clients. They’re drawn by significantly cheaper prices, he said. Homes are selling for a median price of $867,000 in the Bay Area, compared to $300,000 in Sacramento, according to Zillow.

Diez remembers one client whose house burned down in the wine country wildfires.

“He couldn’t rebuild even half of his house in the lot he has now in Santa Rosa, so he came to Sacramento looking at larger properties,” Diez said, “and he just can’t believe what he can get for his money.”

Another client sold the house she’d been renting out in Fremont for just over $1 million and used the money to buy two much-larger homes for $500,000 each in the Sacramento area — one of which has a koi pond.

“You can just step up your lifestyle drastically,” Diez said.

With such a large gap in prices, it’s no wonder Bay Area residents — particularly young people, who are less likely to have bought a home before prices spiked — want to leave. Fifty-two percent of millennials said they will be attempting to leave the region in the next few years, up from 46 percent in 2017. That’s particularly troubling because it means the young people who should be driving the region’s workforce for decades to come instead are seeking opportunities elsewhere, said Grubb.

“Losing our youth is a very bad economic strategy,” Grubb said, adding that if housing prices continue to soar, the Bay Area could be in for a recession.

Just 16 percent of residents think there will be no downturn, with 35 percent expecting one in the next three years.

Already, the local businesses that back the Bay Area Council are struggling to recruit young people, Grubb said. The region has become a tough sell, and those who do want to work here demand high salaries to compensate for the exorbitant cost of living. As a result, companies increasingly are opening offices outside the Bay Area.

Of course if the economy tanks, housing prices will go down. But that, Grubb said, conjures up images of mass layoffs and families struggling to make ends meet — a sacrifice no one should want to make.

The 2018 Bay Area Council Poll was conducted online by Oakland-based public
opinion research firm EMC Research from March 20 through April 3.

Article source: https://www.mercurynews.com/2018/06/03/nearly-half-of-bay-area-residents-say-they-want-to-leave/

The Bay Area job market surged again in May as the region’s booming economy kept employers adding to their payrolls for the 13th consecutive month

The Bay Area gained 6,800 jobs in May, according to seasonally adjusted figures released Friday by the state Employment Development Department. The number of payroll jobs in the nine Bay Area counties stands at 3.986 million, with the South Bay, East Bay and San Francisco-San Mateo regions each adding more than 1,000 last month.

All three of those regions also are at record-low unemployment rates, according to a Beacon Economics survey that stretches back nearly three decades and includes the red-hot employment market of the dot-com boom.

But there’s a dark side to the sizzling record numbers: worsening traffic, escalating housing prices, rising rents and overcrowded schools.

Experts warned Friday that the region’s success creating thousands of new jobs a month could choke off or hobble growth in the future.

“The big issue is the high cost of living and the high cost of housing in the Bay Area,” said Mark Vitner, an economist with San Francisco-based Wells Fargo Bank.

As housing prices and rents soar, people can no longer afford to live close to their jobs, analysts said. “The high costs are forcing more people to move to the Central Valley,” Vitner added.

Over the one-year period that ended in May, the Bay Area added 88,200 payroll jobs, this news organization’s analysis of the EDD figures shows. During the same 12 months, Santa Clara County added 34,500 jobs, the San Francisco-San Mateo region gained 23,200 positions while the East Bay added 23,100 jobs.

“The job numbers are solid,” said Scott Anderson, chief economist with San Francisco-based Bank of the West. “These reports cement the leadership of Silicon Valley in terms of employment creation in California.”

The unemployment numbers tell a similar story: Santa Clara County’s unemployment rate improved to a record low of 2.5 percent in May, compared with 2.6 percent in April, according to seasonally adjusted records that date back to January 1990 and were compiled by Beacon Economics. Jobless rates remained unchanged in May at 2.9 percent in the East Bay and 2.2 percent in the San Francisco-San Mateo regions, Beacon reported. Those also were the lowest on record in those two metro areas.

The question is, when will the bubble burst?

Analysts agree that it will be tough for the region maintain its current remarkable pace of job creation, especially coupled with a historically low number of people out of work.

“It’s going to get harder over the next 12 months to maintain job growth at these rates,” Anderson said. “It’s not due to a lack of demand but a scarcity of workers. Employers may be scraping the bottom of the barrel in terms of being able to find more people to hire.”

Other experts agreed that the biggest threat to job growth could be the ability of employers to hire at the same brisk pace of today.

“We need to grow the labor force,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy, “and the best way to do that is to create more housing for people to work here.”

The alternative is dire, experts said. More people could be shoved into brutal commutes over increasing distances.

“We have to grow the workforce and be able to get them to work in a reasonable amount of time,” Levy said. “That’s the barrier. The barrier is not the strong economy, nor is it the desire of companies to hire.”

It’s the South Bay companies that showed the highest desire for Bay Area hiring in May, accounting for 39 percent of all the jobs in the region added over the last 12 months. In turn, the Bay Area produced 29 percent of all the jobs that California created — with just 20 percent of the state’s population.

During May, Santa Clara County added 1,800 jobs, the East Bay gained 1,400, and the San Francisco-San Mateo metro area added 2,700. All seven of the metro areas that make up the nine-county Bay Area added jobs in May, the report shows. Santa Cruz County added 600 jobs in May.

California overall gained 5,500 jobs during May, the EDD reported. The statewide unemployment rate remained unchanged at a record-low level of 4.2 percent. One notable area that lost employment was Orange County, which shed 3,500 positions.

Among the strong industries during May, according to a Beacon Economics analysis of the EDD report: Technology companies added 1,000 jobs in Santa Clara County and 600 in the East Bay, hotels and restaurants added 900 positions in the San Francisco-San Mateo region and health care gained 800 jobs in the San Francisco-San Mateo metro.

In the East Bay, retailers added 600 jobs, while transportation and warehouse companies — in a sign of strength at the Port of Oakland — added 900 positions.

Article source: https://www.mercurynews.com/2018/06/15/bay-area-job-market-strong-may-hiring-surges-jobless-rates-record-low-apple-google-facebook-amazon/

As you already know, it’s expensive to live in the Bay Area. A new survey found that residents of San Francisco, Oakland and San Jose pay the nation’s highest rents.

Oakland is adding new apartment buildings along the Bayfront and downtown and still the rents continue to rise. “I think it’s a bit of a barrier for people and excludes people,” resident Josh said. “I know a lot of people who won’t move here because of the rent.”

RELATED: Report: Six-figure salaries considered low income in some Bay Area counties

Numbers from the National Low Income Housing Coalition tell the depressing tale. Their report says fair market rent for a 2-bedroom apartment is now more than $2,300 a month – you’d need to make more than $93,000 a year to afford it.

It’s worse in San Francisco, where rent tops $3,100 a month, and you’d need to make close to $125,000 a year to afford it.

In San Jose, it’s $2,500 a month in rent and more than $100,000 in salary to pay it.

“Rents in the San Francisco Bay Area have been high for decades,” said David Stark with the Bay East Association of REALTORS. He says this is an incredibly desirable place to live, with a shortage of housing.

The problem is basic supply-and-demand. “Homes for sale aren’t sitting on the market, apartments aren’t sitting vacant. There are other people who are more than happy to move into an apartment and purchase those homes,” he says.

One man sees it from the other side, as the owner of a San Francisco duplex who rents out one unit. “As a new landlord, it was interesting because I was researching what market rent was and I was, quite frankly, very surprised,” Josh said.

Click here for the full study.

Article source: http://abc7news.com/realestate/study-sf-requires-highest-hourly-wage-to-afford-2-bedroom-apartment/3602714/