October 13th, 2017 2:20 PM by Mike Frangadakis
Blaming a “severe lack of homes for sale and high demand,”
the California Association of Realtors (CAR) claims in a report released last
week that it now takes almost double the income to qualify to buy a home in
California as it did in 2012.
The situation is even worse in the Bay Area.
CAR now recommends “a minimum annual income of $110,890”
(before taxes) in order to purchase a single-family home in California selling
for the median price of $533,260, based on a $2,770/month mortgage payment
after 20 percent down and an interest rate of just over four percent.
That is if buyers stick to the time-honored (but for many
unreachable goal) of only paying 30 percent of monthly income to housing. In
the Bay Area, the association recommends bringing in $179,390/year, which would
come out to nearly $15,000/month.
To put that amazing sum in perspective, computer programmers
in the Bay Area are averaging only $106,710/year, according to the Occupational
Employment and Wage Estimates from the Bureau of Labor Statistics from May
Software developers are bringing in about $133,500/year.
Cops somewhere around $105,540. And teachers $43,340.
Even more startling, five years ago the recommended income
was $90,370. A pretty heavy sum in and of itself—median income nationwide was
just over $51,000 that year according the US census—but just about half what it
These figure depend on CAR’s estimates about median housing
prices, of course. The report pegs the average home in San Francisco at $1.45
million, for example.
Earlier in the summer, Paragon Real Estate Group estimated
the same price between $1.4 million and $1.5 million, depending on the month.
Sites like Trulia and Redfin put it at $1.19 million and $2.24 million
respectively, although those aren’t scientific samplings.