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Potential homebuyers trying to break into the Bay Area real estate market without a high-paying tech job or financial help from family may find the American Dream of home ownership slipping right out the window.
A California Association of Realtors study released last week showed that — with Bay Area median home prices soaring over $1 million and median incomes insufficient to carry such loans — fewer than one in five Bay Area residents can afford to buy into the local market.
Many younger residents are particularly affected, unable to buy in the neighborhoods where they grew up, some real estate agents say.
“The market is such that there are many people who were raised in Oakland and Berkeley and cannot afford to own here,” said real estate agent Deidre Joyner with Red Oak Realty in Oakland.
“Just yesterday, I received seven offers on a major fixer,” she said. “It was interesting; the winning offer was from two couples with children going into the property together. They said in their letter they plan to build another structure in the back.
“These are the things people are doing to get into a property.”
The CAR study ranks regions according to an affordability index based on the median household income and the median home sales price. Nationwide, it takes a household income of about $57,000 to afford the average-priced home at $269,000.
In the Bay Area, however, a household income of about $220,000 is needed to buy a home at the median price of $1.04 million, according to CAR.
Piedmont agent Matthew Heafey of The Grubb Co. disputes the “one in five” statistics, saying he sees plenty of buyers who can afford the high price tags, such as a home he currently has listed in Piedmont for nearly $2.5 million.
“I’d say it’s four in five of potential buyers who can do it,” Heafey said. “There are a lot of people with a lot of liquidity out there who can indeed afford a $2- or $3-million house right now. A lot of your buyers are tech-related for sure, either from here or coming in because of job relocation. Stock options have made people very wealthy over the years.”
Indeed, according to CAR, higher wages in San Francisco and Marin counties have allowed more people to buy homes in pricey regions. But Alameda, Contra Costa, Santa Clara, Solano and Sonoma counties became less affordable for the average buyer in the second quarter of the year, the study showed.
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If I want but cannot afford to buy a Ferrari, am I actually a “Potential Ferrari buyer”?
If I want a meal at Nobu but cannot afford a meal over $5.00 does that make me a potential frequent diner at Nobu?
The story talks about people unable to afford this area.
Those people ARE NOT “Potential buyers”.
This is not new news — we’ve all seen this before, for decades. Thirty years ago WE could BARELY afford to buy the LOWEST END HOUSE in the area (even after owning a house in another state first. We scraped by and we panicked about our monthly bills for at least a decade. But by diligent cost-cutting, and frugal living, and extensive saving, we hung on, and now are doing well. No-one subsidized us. We couldn’t afford expensive “toys” — even on two “tech” salaries. Why do 2018 immigrants to the area think that they should be treated better (more easily) financially than we were 30 years earlier? (This has been a “tech” valley for decades, and the “cost of housing” story has been the same for decades. This is nothing new — nor even newsworthy.)
What is wrong with you people when you compare having a place to live as being equivalent to wanting a Ferrari or a meal at Nobu? Bay Area liberals are the worst, at least conservatives are honest about hating the poor.
And the city is okay with this? Only hecca wealthy can now afford to live in Mountain View? Be gone the middle class.
Mountain View has whored itself out to be a ‘city’. Gone is the suburban neighborhood of past.
PEOPLE: I’m going to be putting my Manufactured (2000) home on the market soon. Not many for sale right now. A probable mortgage payment + space rent for you will be 1/5-1/4 what folks are paying in rent. To buy one of these homes you need: Flawless credit record and rent payment record because park managements require it and can stop a sale that has closed if you don’t meet their required standards vav credit and income levels. Incomes of ~ $70K should qualify. These homes in California APPRECIATE (mine has–BIG time), I pay property taxes to County Assessor, not license fee to DMV (a myth since early 70’s); no wheels under my home (a myth since early 70’s). Quiet, security conscious neighborhoods, nice neighbors (some of whom work at the big TECH companies), mostly kid friendly. I’m just saying, if you want to have an really nice affordable place to live which will appreciate in this area… Then y’all should think outside your narrow box and consider another option. I hope this helps. Best wishes.
Why do you equate “Having a place to live” with OWNING a home in the most expensive markets in the nation and one of the most competitive real estate markets in the world?
You tried though…participation trophy for you.
What’s the matter mikey, your playhouse and Hot Wheels trike not good enough for you???
LOL,
Can I live in Woodside or Belvedere? I really want to, and I hate the fact that I can’t afford it. And I’m not talking Ferrari, isn’t this my HUMAN RIGHT?