We all know it takes a lot of money to own or rent in the Bay Area, but a new survey is showing an eye-opening detail of just how financially painful it can be.
Real estate agent Michael Bellings has a San Francisco unit priced at $1.5 million and expects it to sell in a matter of days.
“The median price for condos in San Francisco is $1.25 million, and for single family homes it’s $1.75 million,” he said.
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A new study by the UC Berkeley Terner Center for Housing Innovation said more and more homes in much of the Bay Area are becoming out of reach for the middle class, defined as those making between $80,000 to $165,000 per year.
“In San Francisco you have to make upwards of $200,000 to afford a home in the lower segment of the housing market and these are supposed to be starter homes,” said David Garcia of the Terner Center for Housing.
The Terner Center report said that in 2010, 47% of the homes for sale were affordable to members of the middle class. In 2019, that dropped to 24%.
In Alameda and Santa Clara counties, the decline is even steeper. In 2010, 64% of the middle class could afford a home. In 2019, that’s down to about 30% n those counties.
“We have seen wage growth go up 23% in 10 years,” said Garcia. “But that pales in comparison to home prices which rose 180%.”
The study shows it’s getting tougher for renters too. Roughly half of Bay Area renters are spending a higher portion of their earnings on housing in 2019 than in 2010.
“It might be time to start thinking of something else potentially if I ever want to buy a house,” said San Francisco renter Karli Grigsby.
But there is hope for some house hunters, if you can be patient and flexible.