Housing Affordability in CA's Most Expensive Counties

By
Real Estate Agent with Compass CA DRE# 01215160

Twenty-eight percent of California households could afford the median-priced home in the fourth quarter of 2018, down slightly from the same time in 2017.

However, California's four million-dollar housing markets--San Mateo, San Francisco, Marin and Santa Clara Counties all saw affordability improve year over year.

 House in San Mateo County, CA

(interior of a house in San Mateo County)

All four California counties where it takes seven figures to buy a home can be found in the Bay Area, and they were all among the 10 in the state that saw housing affordability increase from the fourth quarter of 2017.

The California Association of Realtors’ latest Housing Affordability Index says that 28 percent of the state’s households could afford the median-priced $564,270 single-family home as of the fourth quarter, assuming a 20 percent down payment and a 30-year, fixed-rate mortgage at 4.95 percent. Affordability inched down from 29 percent in the fourth quarter of 2017, which CAR attributes to higher mortgage rates. California housing affordability has been cut in half since early 2012, when 56 percent of residents could qualify for a mortgage on a median-priced home.

At nearly $1,519,000, San Mateo is California’s most expensive county, and affordability there edged up from 14 percent in the fourth quarter of 2017 to 15 percent. The number of households who could afford a mortgage also increased on an annual basis in the Golden State’s other million-dollar housing marketsSan Francisco (from 12 percent to 15 percent), Marin (from 18 percent to 19 percent), and Santa Clara (from 15 percent to 18 percent) counties.

Households in San Mateo and San Francisco counties must earn more than $325,000 per year to make monthly mortgage payments that exceed $8,000.

House in San Francisco(House in San Francisco)

Even if California’s housing affordability is about half the national average of 54 percent, buyers here are slowly gaining more leverage. In a new analysis of Bay Area and Los Angeles sales data, Compass Chief Economist Selma Hepp found that price reductions in both of those regions have increased in recent months, as appreciation slows and buyers find themselves with more options from which to choose.

 (Cover picture courtesy of Jamie, www.unsplash.com)

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Rainmaker
3,210,568
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Well there are days the midwest would trade our snow shine for your sunshine but we sure do love our housing prices !

Feb 20, 2019 08:42 PM #1
Rainmaker
1,748,078
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Without a doubt, Sally K. & David L. Hanson, prices are high here. Our utility bills are low, though!

Feb 20, 2019 08:49 PM #2
Rainmaker
3,198,038
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Lottie. You prices in California continue to amaze me. Enjoy your day!

Feb 21, 2019 04:05 AM #3
Rainmaker
1,868,303
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Lottie - It is certainly good news that affordability is increasing.  Your county does top it for prices although Westchester County NY is also an affordability challange.

Feb 21, 2019 06:47 AM #4
Rainmaker
1,748,078
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Good morning, Wayne Martin -- I know; with prices this high many buyers today need assistance, especially for the down payment. We tend to live in much smaller spaces than those of you in other locations. But that works out OK since we're outdoors 12 months of the year and have low utility bills to boot.

Feb 21, 2019 09:54 AM #5
Rainmaker
1,748,078
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hello Grant Schneider - even the small increase in affordability is something to be cherished. It's hard to be a buyer here today; our generation had an easier time of it.

Feb 21, 2019 09:55 AM #6
Rainmaker
751,075
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

My son was offered a job in California and chose instead to go to Tennesee instead where he has just purchased a home on 20 acres for less than $400,000. Now there is work to be done, but he chose that because even with an increased salary in California he could not see being able to afford to live there.

Feb 22, 2019 07:33 AM #7
Rainmaker
1,748,078
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Nick Vandekar, 610-203-4543 - congratulations to your son. His story is not an infrequent one as more high-tech hubs are starting up in various parts of the country.

 

Feb 22, 2019 12:55 PM #8
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Rainmaker
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Lottie Kendall

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