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California's housing prices are so high, only 16% of buyers can afford a home

Original post made on Aug 18, 2023

Fewer than 1 in 5 can afford to buy a home in California, according to the latest housing affordability index. In San Mateo, the state's least-affordable county, you'll need to earn $504,400 annually to buy a home.

Read the full story here Web Link posted Wednesday, August 16, 2023, 4:09 PM

Comments (3)

Posted by NTB2
a resident of College Terrace
on Aug 18, 2023 at 9:35 am

NTB2 is a registered user.

So how much would a single mom of three have to earn to rent in Silicon Valley? Time to pass the state wide Cali Rent Control at the ballot box!

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 18, 2023 at 9:55 am

Online Name is a registered user.

News flash: lack of affordability is a national problem due to current high interest rates and all the national speculators buying up all types of housing, often just to flip the properties for short-term gains.

(The huge influx of speculators immediately swooping down to buy up Maui real estate was so bad the the Maui leaders had to say they weren't going to allow the property transfers -- to cite just one example of the speculation from the news. Others exampples abound.)

Posted by Silver Linings
a resident of Another Palo Alto neighborhood
on Aug 27, 2023 at 12:45 am

Silver Linings is a registered user.

Even back in the '80s, the Bay Area was shockingly unaffordable. For engineers who came in with $25k/year salaries, with 9% interest rates, no one I knew could afford anything. Programs to help 1st-time homebuyers now just didn't exist then.

Renting in the Bay Area longterm is even harder, you don't build equity and are always at the mercy of rent increases makes stability impossible. I wish programs to help low-income residents would provide a way for people to get a toe in the door and build equity.

While the level of sacrifice is usually way beyond what most people are willing to consider, in the long run, owning is the only path to stability in the Bay Area. Here are some creative ideas that made it possible for people to get into homes:

1) Get together with 2 or 3 of your best friends, form a corporation, and buy a home together. Over time, the equity you build and the money you save living together will allow everyone to move on into homes of their own. I know people who did this and all thought it was the best decision they ever made. 2017 tax law changes made this kind of investing even more advantageous.
2) Turn your downpayment into an investment strategy for family and friends in other parts of the country. I know realtors who said this was common a few decades ago.
3) Find a starter home in East Palo Alto, Milpitas, etc, which are still relatively affordable, and where there are multiple properties even now for under $1M. Numerous residences for $300k-$500k range in San Jose, and decent mobile homes for $100k range.
4) Look for help through organizations that help with first-time buyers, like CalHFA, which has zero rate down payment assistance loans, etc. Some companies will provide down payments for a share of profits later.
5) Get a toe in the door with an interest-only loan. Even if you can't pay down the principal, if you plan to stay in the Bay Area in the long run, home value appreciation can help build equity.


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