Rob Goszkowski works in communications at the real estate brokerage company Redfin. He spends a lot of time looking at housing data. When looking at Mission listings affordable to households making the San Francisco median income, he found something startling. Here’s what he wrote up and shared with Mission Local:
This fall, San Francisco earned the dubious distinction of having the highest median rent in the U.S. for a one bedroom apartment at $3,100, according to rental company Zumper. While the median household income in The City is nearly 56% more than it is for the overall U.S., at $79,624 and $51,000 in 2013, respectively, a household earning nearly $80,000 per year would still dedicate over half of that income to paying the rent after taxes. So in this market, does it make more sense to buy?
Redfin’s Affordability Calculator, assuming a down payment of $30,000 and $500 monthly debt, produces a suggested price range between $264,000 and $366,000 in the 94111 zip code. A Redfin search of properties in all of San Francisco performed on Oct. 16 with a price ceiling of $350,000 turns up . . . one home in the Mission, a one-bedroom, one bath, below-market-rate (BMR) condo for $209,000. Currently, a household of one earning less than $81,000 is eligible to purchase this condo (although that number is lower for many BMR homes). With an estimated monthly mortgage payment of $1,466, a median-income earning household could pay less than half of what many one-bedrooms go for in San Francisco.
Overall, there simply aren’t a lot of options for these households in The City and most of the palatable ones are BMRs or tenant-in-common (TIC). Of the 9 homes that cost less than $350,000 in San Francisco, four are BMRs, one in Bernal Heights is a TIC, and the rest are fixer-uppers in Hunter’s Point or Bayview. Even the “cheapest cottage in the Bayview” has a list price that is out of reach (although the seller would likely come down on that figure since it’s been on the market for two and half months).
The takeaway? Median-income earners living in the Mission that wish to buy a home in San Francisco should probably be involved with The City’s Inclusionary Housing Below Market Rate Ownership Program before looking for a new place to call home.
I bought my 1,330 sq. ft condo for 85K 33 years ago. I was not so foolish as to think I could stay in a rent controlled apartment forever…..Now my condo is paid for! I only pay low taxes and HOA dues. Plus I can get a reverse mortgage and it will PAY me money every month till I die !
Viz Valley, Hunter’s Point, Outer Mission are STILL affordable. Move out there.
Is it really startling that only rich people can afford to buy property in San Francisco? I thought everybody knew that already.
Also, keep in mind that the affordability calculator that was used is assuming a single family home. If you buy a condo, you need to include HOA fees, which are quite high in the Bay Area. So add at least another $350 to your monthly payment.
I really hate the word “takeaway”, but I think the “takeaway” here is wrong. The actual “takeaway” is that you can’t afford to buy property in San Francisco on the median income of the city. If you look at the actual prices for real estate and not the tiny number of BMR properties, you’ll find that only people in the very top income bracket can afford to buy. Even worse, that applies to current market rate rent as well.
Hoa’s are cheap here… In NYC thaey are more like $1,200 to $1,500
When hundreds & thousands want to live in SF it will not be affordable. Simple supply & demand. Plus restrictive housing politics in this town have driven up housing.
Remember this down is dirt cheap for people who have been here for decades, it’s only expensive for those arrived afew yrs ago, or didn’t buy when it was possible.
As an immigrant buying a home was a top priority. I would encourage young people or families to group together and buy a small building if they really want to stay here, otherwise their futures are uncertain, and it’s not up to the City to subsidize every one who wants to be here.
And NO ON PROP G!
No, it’s not simple “supply and demand.” Supply and Demand is an abused, wrongly-applied. and misunderstood _theory_ (it’s not a “law”). When all you’re building is housing above the current mean and median prices, it pulls the price of all housing up. Please show me an example of a building boom that lowered prices. Demand is important, but which segments the supply addresses is significant. When all you’re building is luxury units, you create a speculative bubble. Take the cash buyers out, take the foreign flight capital out, and the market collapses. This market is driven by QE2. When the taxpayer-subsidized gambling-for-billionaires spigot is turned off. the market will begin to return to normal. Meanwhile, SF is turning to shit. SF is becoming Houston-by-the-Bay.
If the city were to end rent control both rents & prices would comedown.
No on Prop G – it will make housing even less affordable, it will not stop evictions it will just mean that only the super wealty can play in SF real estate.
Look around–go to Benicia or Vallejo! Take the ferry to work! 🙂 You can get A LOT more house for your money in either place . Yep, a commute. . But a chance at a normal US-style family life if you need space! Or try Moss Beach, Pacifica. Yep, fog. Yep, windy drive. Yep, gorgeous . . . not to minimize the pain, but it’s an answer!