Here’s one more dubious distinction for San Jose and San Francisco: The two metro areas are the runaway national leaders in the amount of household income needed to buy a house.
According to a study from the HSH.com mortgage information website, a $216,181 household salary is required to buy a median-priced house in the San Jose metro area, while $171,330 is needed to buy a typical home in the San Francisco metro. That’s assuming a 20 percent down payment on a 30-year fixed loan.
Drawing on third-quarter data, HSH looked at the nation’s 50 most populous metropolitan areas. In the San Jose metro, the median housing price was $1,165,000. With 20 percent down, that leaves a $5,044 monthly mortgage payment. In the San Francisco metro — which includes Contra Costa County, as well as Oakland and all of Alameda County — the median stood at $900,000 and the typical mortgage payment was $3,997.
The report blames the affordability crisis on the nation’s constricted home supply, which forces prices up and slows sales growth. “There are few signs that the situation will get better quickly or soon,” the report says.
While the Bay Area’s numbers may sound outlandish, the region is an increasingly outlandish place when it comes to housing and earnings.
In April, the U.S. Department of Housing and Urban Development released its 2017 income limits, saying that a family of four can earn as much as $105,350 in San Francisco and San Mateo County and still be considered “low income” — and thereby eligible for affordable and subsidized housing programs. In Santa Clara County, the upper limit of “low income” for a family of four was set at $84,750, while $80,400 was the upper limit in Alameda and Contra Costa counties.
A wide gap separates the San Jose and San Francisco metros from other expensive markets. In Los Angeles, the household income needed to buy a median-priced house is $115,068, according to HSH, while the necessary income is $99,151 in the New York City area, $97,465 in the Boston area, $93,418 in the Seattle area and $84,503 in the Washington, D.C. area.
“Affordability pressures are frustratingly occurring in places where jobs are plentiful and incomes are rising,” said Lawrence Yun, chief economist for the National Association of Realtors. “Without a significant boost in new and existing inventory to alleviate price growth, job creation could slow in high-cost areas in upcoming years if residents begin exiling to more affordable parts of the country.”
Yun said as much last month when he addressed the annual convention of the Santa Clara County Association of Realtors: “The smartest people in America are all here in San Jose,” he said, but he warned that that may not always be the case. More and more, he predicted, tech companies “will flee” the area and go to more affordable regions of the country.
According to HSH, some of those areas include Atlanta, where a $55,390 household income will buy a median-priced home of $204,300, or Austin, a growing tech center where $67,440 will get a house. Closer to the Bay Area, $50,728 will get a house in Las Vegas and $71,344 will still get a house in Sacramento, a long commuter-ride away from the core of Silicon Valley.
The number of homes for sale statewide — and particularly in the Bay Area — remains stubbornly low, according to a new report from the California Association of Realtors (C.A.R.) In October, all nine Bay Area counties saw double-digit declines in the number of active listings compared with a year earlier.
That’s pretty shocking, and one result is predictable. With buyers fighting over the shrinking supply of available homes, prices went up again. The median sale price of a single-family home in the region was $892,720, up 11.1 percent from October 2016, association says.
Less predictable is this: The number of homes sold actually increased across the nine counties, despite the dwindling number of listings. It didn’t increase by much — just 0.5 percent year-over-year. But still, the fact that the region eked out any sales gain at all speaks to the fierce level of competition here; buyers are burning through whatever inventory exists.
In some counties, the sales gain was even greater.
In Alameda County, where the median price of a single-family home rose 11.3 percent year-over-year to $862,450, sales surged 12.2 percent. In Contra Costa County, where the median rose 14.8 percent to $615,000, sales rose 6.1 percent. In San Francisco, where the median climbed 13.3 percent to $1,594,000, sales were up 2.7 percent.
Granted, these increases are relative, building upon a chronically low volume of transactions. But again, whatever is getting listed is getting sold, quickly. In Alameda County, for example, homes spent 13 median days on market, compared to 15 a year earlier.
In some counties, buyers may already have burned all the fat away from existing inventories. For instance, in Santa Clara County, where the median price rose 18.6 percent to $1,242,500, sales fell 5.7 percent. Homes typically sold there in nine days. In San Mateo County, where the median climbed 12.8 percent to $1,522,500, sales dropped 2.3 percent, with homes spending 11 days on market.
Statewide, October sales were down 3.4 percent from October 2016. Year-to-date sales are 1.7 percent ahead of last year’s pace, according to the association, but the annual sales pace has been dropping since the first quarter.
“As we enter the fall homebuying season, we’re seeing signs of the market slowing as eroding affordability and persistently low housing inventory cut into home sales,” said 2018 C.A.R. President Steve White.
Statewide, the median price of a single family home in October was $546,430, up 6.1 percent from one year earlier.
Here’s another tidbit. San Francisco had the state’s highest price per-square-foot in October: $946. Next highest was San Mateo County ($888), followed by Santa Clara County ($703). The best per-square-foot bargains were to be had in a trio of Central Valley counties: Kern ($133, lowest in the state), Glenn ($134) and Kings ($137).
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SACRAMENTO — They laugh at it now — the conversation that set in motion their move to a city that neither of them had ever seen.
“What about Sacramento?” Cat Perez asked her wife, Aja Blue. “What about Sacramento?” Blue responded.
After a decade of renting in San Francisco and a brief stint in Los Angeles, Blue and Perez became part of a great migration to one of the last affordable urban areas in the state. Drawn by lower housing prices, Bay Area residents are pouring into California’s capitaland its surrounding areas, trading a temperate climate for triple-digit summers; hustle-and-bustle for a slower pace of life; and redwood hiking trails for expansive fields and distant, snow-capped mountains.
The region has become the top destination in the country — ahead of trendy Seattle and Portland — for those looking to flee the jammed roads and high costs of the tech-dominated Bay Area, according to new migration data from Redfin, a popular real estate site. Each year, nearly 20,000 Bay Area residents are resettling in cities stretching from Davis to Sacramento and further east to the Sierra foothills, according to census data analyzed by the Greater Sacramento Economic Council.
“It’s becoming a place for the next generation to live,” said Sacramento’s mayor, Darrell Steinberg.
Pedestrians walk near the State Capitol in Sacramento on Nov. 7, 2017. (Dai Sugano/Bay Area News Group)
So many Sacramento-area residents have jobs based in the Bay Area — roughly 120,000 as of the council’s last estimate — that business leaders tout a burgeoning “megaregion” encompassing both Silicon Valley and the capital. Many workers make the long commute, at least occasionally. But some Bay Area employers — like the health care enrollment startup that Perez co-founded, HealthSherpa, and the mobile video platform developer Fantag — have opened offices in Sacramento, offering employees (and themselves) a cheaper place to live, without the long trek.
Sacramento was the fastest-growing big city in the state last year, a growth spurt largely caused by the Bay Area exodus. Roughly 75 percent of Redfin users moving into the greater Sacramento region come from the Bay Area, said the site’s chief economist, Taylor Marr.
Talk to anyone who has made the move, and you will inevitably hear the word “affordable.” The median home price in the city of Sacramento is now about $300,000, less than half of what it is in Oakland and about a third of what it costs to buy in San Jose, according to Trulia. The median rent for a two-bedroom apartment in Sacramento was $1,525 in August, compared to more than $2,700 in San Jose and Oakland and $4,000 in San Francisco.
Last year Blue and Perez bought a three-bedroom, mid-century ranch house on the outskirts of Sacramento for $307,000. The affordability and ease of living, Blue said, has caused her stress levels to drop to zero.
“I love it here,” Blue said, “and I was actually shocked to find myself saying that so fast.”
The Bay Area migration has helped fuel interest and investment in Sacramento’s once notoriously dead downtown, now home to fancy condos, a new sports arena and an emerging restaurant scene. The stylized, hipster vibe that is so ubiquitous in other big cities is now unmistakable in parts of Sacramento as Bay Area chefs and restaurateurs — including Tom Schnetz, owner of the popular Oakland restaurants Flora, Doña Tomas and Xolo — open up shop.
But Sacramento and the Bay Area are a study in contrasts, which can be unnerving for those making the leap.
Schools, parks, bicycles, and grandparents — and the chance to buy a home — were enough for Judy Wong-Chen to trade her family’s rent-controlled apartment in San Francisco for Davis, a college town west of Sacramento.
Still, she dreads saying goodbye to the intangibles, like watching the waves crash on the beach with her 3-year-old daughter after picking her up from day care. After they move at the end of the month, her husband will be commuting to Oakland for work, more than an hour away by car or train.
“Truly, I love my life now, and it’s really hard to think about consciously choosing to leave it,” Wong-Chen said. “I predict this is going to be a tough transition.”
Bouts of homesickness hit 27-year-old Michael McDaniel after he moved in February from a $1,500 studio in his native San Jose to a two-bedroom, one-bath bungalow in leafy East Sacramento that he shares with a roommate, paying $550 per month. But, he said, he is now enjoying the city and finds it easy to go back to visit. McDaniel is studying communications and business at Sacramento State and Sacramento City College — schools he chose mainly because of the capital’s low cost of living — while working at a combination bar and barber shop downtown and occasionally waiting tables.
Portrait: Michael McDaniel, 27, moved from San Jose to Sacramento in February so he could go to college in a more affordable city. (Dai Sugano/Bay Area News Group)
Before the move, he had an entry level receptionist’s position at Google. To keep a roof over his head and food in the fridge, he said, he also juggled a part-time job and occasionally drove for Uber.
“I was doing what I could to survive,” he said. “But it was this constant struggle.”
The owners of San Francisco’s playful, Japanese-inspired seafood restaurant Skool, Andy Mirabell and his wife, Olia Kedick-Mirabell, said they spent years scouring Marin County and the East Bay for places to open a second restaurant — and to move their young family — before they realized they were overlooking Sacramento, where Mirabell grew up. They moved two years ago into what Mirabell called the “home of our dreams.”
“Sacramento is so affordable,” Kedick-Mirabell said. “It just all made so much sense for us to come over here.”
Paradoxically, the intense draw of Sacramento’s affordability is making it more expensive — and harder to find a place to live in an area that not long ago had an oversupply of housing.
Home prices have risen 68 percent across the region since 2011, according to Redfin, and they have more than doubled downtown. Over the past year, Sacramento renters were walloped with some of the largest price hikes in the nation: a 9.6 percent increase from the previous year, the highest among the nation’s 30 largest metro areas, according to an August analysis by the real-estate firm Yardi-Matrix.
A bicyclist rides near a housing construction project on Nov. 7, 2017, in Sacramento. (Dai Sugano/Bay Area News Group)
“Everybody I know is flocking to Sacramento, and that’s driving the prices up,” said Ava Nadal, who was born and raised in Oakland and moved from the East Bay to Sacramento decades ago with husband, Fernando Nadal.
The Nadals, both in their 60s and coping with serious health problems, lost their home during the Great Recession. They were evicted this year from a gated-community rental in a dispute with the homeowners association, they said, and now rent a small house in a crime-ridden Sacramento neighborhood — the only available place they could afford.
Months after they moved in, the house was sold to a new owner who — for now — has allowed them to stay. But the threat of eviction looms.
A Bay Area backlash — the kind of fierce resentment that has long greeted newcomers from California to Portland — has yet to manifest in laid-back Sacramento. But in September, a Sacramento Bee columnist noted with alarm the rising costs. She compared some Bay Area refugees to “drunk millionaires in a dollar store” and implored them to do their due diligence before overpaying for an apartment.
“I remember the days – you know, back in July – when I was truly grateful we had so many transplants here,” quipped Erika Smith, a Bee editorial writer. “Without them, the capital city wouldn’t have such a demand for – and, therefore, such a supply of – excellent restaurants, excellent coffee and excellent bars.
“But now,” she wrote, “it seems Sacramento is cruising at top-speed toward peak San Franciscification.”
The San Jose metropolitan area posted the nation’s steepest year-over-year plunge in the number of homes for sale in October — falling by a precipitous 51.6 percent.
With buyers competing for so few listings, San Jose also posted the nation’s sharpest year-over-year rise in the median cost of a home: up 19.2 percent to $1,049,000. That’s according to a new analysis by Redfin, which analyzed 74 U.S. housing markets with populations of 750,000 or more. Nationally, the home supply shrank for the 25th consecutive month, down 12.2 percent from a year earlier.
“Buyers are just flocking from one property to the next,” said Kevin Swartz, a Saratoga-based agent for the Sereno Group. “We’re at this point where they’re just making offers on whatever is available, because it’s so limited.”
The Redfin report also ranks the Bay Area’s three main metro areas as the most competitive markets in the U.S. Combining data for single-family homes, condominiums and townhouses, it ranks San Francisco as the nation’s most competitive market, with 78.6 percent of homes selling for above the list price in October. San Jose ranked second, with 76.3 percent of homes going for above list, and Oakland ranked third, with 63.7 percent of homes selling for more than the asking price.
Bay Area markets also figured among the five “fastest” metro areas in the U.S.
The speediest market was Seattle, where homes typically sold in 10 days, according to Redfin. Second speediest was San Jose (12 median days on market) and third was Boston (14 days). Oakland and San Francisco tied for fourth place; homes spent 15 median days on the market in both metros. Nationally, the typical home spent 44 days on the market, down from 49 in October 2016.
Underlying all these trends are the chronically low levels of homes for sale. Thursday in all of Santa Clara County, Swartz pointed out, only 620 single-family homes were on the market. Adding condominiums and townhouses to the mix, the total still only grew to 745 listings.
San Jose’s 51.6 percent year-over-year tumble in the number of homes for sale was unmatched, though San Francisco had the second steepest decline in the U.S., 28.5 percent. Oakland was close behind, with a 25.5 percent year-over-year drop. As the supply of available homes contracts, buyers keep putting pressure on prices. The median price of a home in the San Francisco metro area hit $1,282,200 in October, up 4.7 percent year-over-year. In the Oakland metro area, it climbed 13.1 percent year-over-year to $690,000, according to Redfin.
Only eight of the 74 metros showed year-over-year increases in inventory. Those were mostly in the South and Midwest. Raleigh, N.C., had the largest jump in the number of available homes, up 16.1 percent, followed by Baton Rouge, LA (12.9 percent), Austin, Texas (8.8 percent), New Orleans (7.5 percent) and St. Louis (4.8 percent).
With home supplies chronically low in most U.S. metros, sales “are sputtering,” said Nela Richardson, Redfin’s chief economist. “The last time we saw a substantial increase in the number of homes for sale, Donald Trump was a candidate in a Republican field of 11.”
Also on Thursday, the California Association of Realtors (C.A.R.) issued its October report on the statewide housing market.
Looking at existing, single-family homes, C.A.R. reports that the median price in the nine-county Bay Area is $892,720, up 11.1 percent year-over-year.
County by county, again for single-family homes, here are a few more numbers.
The Contra Costa County median was $615,000, up 6.1 percent, while the Alameda County median was $862,450, up 11.3 percent. In Santa Clara County, the median was $1,242,500, up 18.6 percent. In San Mateo County, the median climbed 12.8 percent to $1,522,500, and in San Francisco County it rose 13.3 percent to $1,594,000.
The San Jose metropolitan area posted the nation’s steepest year-over-year plunge in the number of homes for sale in October — falling by a precipitous 51.6 percent.
With buyers competing for so few listings, San Jose also posted the nation’s sharpest year-over-year rise in the median cost of a home: up 19.2 percent to $1,049,000. That’s according to a new analysis by Redfin, which analyzed 74 U.S. housing markets with populations of 750,000 or more. Nationally, the home supply shrank for the 25th consecutive month, down 12.2 percent from a year earlier.
“Buyers are just flocking from one property to the next,” said Kevin Swartz, a Saratoga-based agent for the Sereno Group. “We’re at this point where they’re just making offers on whatever is available, because it’s so limited.”
The Redfin report also ranks the Bay Area’s three main metro areas as the most competitive markets in the U.S. Combining data for single-family homes, condominiums and townhouses, it ranks San Francisco as the nation’s most competitive market, with 78.6 percent of homes selling for above the list price in October. San Jose ranked second, with 76.3 percent of homes going for above list, and Oakland ranked third, with 63.7 percent of homes selling for more than the asking price.
Bay Area markets also figured among the five “fastest” metro areas in the U.S.
The speediest market was Seattle, where homes typically sold in 10 days, according to Redfin. Second speediest was San Jose (12 median days on market) and third was Boston (14 days). Oakland and San Francisco tied for fourth place; homes spent 15 median days on the market in both metros. Nationally, the typical home spent 44 days on the market, down from 49 in October 2016.
Underlying all these trends are the chronically low levels of homes for sale. Thursday in all of Santa Clara County, Swartz pointed out, only 620 single-family homes were on the market. Adding condominiums and townhouses to the mix, the total still only grew to 745 listings.
San Jose’s 51.6 percent year-over-year tumble in the number of homes for sale was unmatched, though San Francisco had the second steepest decline in the U.S., 28.5 percent. Oakland was close behind, with a 25.5 percent year-over-year drop. As the supply of available homes contracts, buyers keep putting pressure on prices. The median price of a home in the San Francisco metro area hit $1,282,200 in October, up 4.7 percent year-over-year. In the Oakland metro area, it climbed 13.1 percent year-over-year to $690,000, according to Redfin.
Only eight of the 74 metros showed year-over-year increases in inventory. Those were mostly in the South and Midwest. Raleigh, N.C., had the largest jump in the number of available homes, up 16.1 percent, followed by Baton Rouge, LA (12.9 percent), Austin, Texas (8.8 percent), New Orleans (7.5 percent) and St. Louis (4.8 percent).
With home supplies chronically low in most U.S. metros, sales “are sputtering,” said Nela Richardson, Redfin’s chief economist. “The last time we saw a substantial increase in the number of homes for sale, Donald Trump was a candidate in a Republican field of 11.”
Also on Thursday, the California Association of Realtors (C.A.R.) issued its October report on the statewide housing market.
Looking at existing, single-family homes, C.A.R. reports that the median price in the nine-county Bay Area is $892,720, up 11.1 percent year-over-year.
County by county, again for single-family homes, here are a few more numbers.
The Contra Costa County median was $615,000, up 6.1 percent, while the Alameda County median was $862,450, up 11.3 percent. In Santa Clara County, the median was $1,242,500, up 18.6 percent. In San Mateo County, the median climbed 12.8 percent to $1,522,500, and in San Francisco County it rose 13.3 percent to $1,594,000.
