California is no stranger to affordability issues, but a new report by The Mercury News reveals that today’s buyers pay nearly nine times the median annual income—$100,000—for a home in the Bay Area.
The report, which is compiled of stats by Clever Real Estate, said San Jose, California, is the least affordable metro in the nation, requiring nearly 10 times the median income to buy the average home.
The typical Bay Area home buyer in the 1960s paid about twice the median annual income for a house, while home hunters today pay nearly nine times the median annual income, according to a new study by Clever Real Estate. The region’s median annual household income is roughly $100,000.
“It’s a crazy disparity in some parts of the country,” said Thomas O’Shaughnessy, head of research at the St. Louis-based discount real estate website. Although affordability has declined in most major cities, he said, “it’s really the most noticeable in San Francisco and San Jose.”
Home prices nationally have taken off so far in 2019, but home prices have leveled off in California after peaking at $928,000 in May 2018, according to data from CoreLogic.
CoreLogic also found that California’s housing market in recent months has turned around. The report states that existing homes sales increased by 10.6% month-over-month in Los Angeles, Riverside, San Diego, Ventura, San Bernadino, and Orange Counties.
While this is an increase from April, home sales are down 2.7% from 2018, and the 22,300 homes sold for the month was the lowest for that month since 21,754 were sold in May 2015.
Homes sold in the San Francisco Bay Area saw an increase of 18.9% from April 2018, but still down 2.7% year-over-year.
The Mercury News, though, states real estate agents say prices may be soaring past the budgets of most would-be home buyers, as affordability remains an issue for potential buyers who have trouble saving $200,000 for a down payment on a median-priced home.