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Only 11 Percent of Households Can Afford Most San Francisco Homes

San Francisco has the least attainable housing stock in the state

Another day, another worrisome housing study. This time, the California Association of Realtors gives us its Q4 Housing Affordability Index, gauging what percentage of households could afford a home at median prices in San Francisco and other California counties at the end of 2015.

The bad (albeit entirely predictable) news is that San Francisco has the least attainable housing stock in the state: Only about 11 percent of San Francisco households can feasibly afford to buy a home at the median sales price.

That’s not quite as bad as our all-time low of eight percent, which we hit in Q3 of 2007, right before the big bust. And it’s also up one point from the previous quarter, and flat compared to the same quarter in 2014. So, small victories.

Things are rough all over, as the combined state average is only 30 percent. In the Bay Area, Solano County is the least intimidating place to be shopping around, with 45 percent of households realistically able to manage a median down payment.

Only four of the 28 surveyed counties in the state managed to crack 50 percent: San Bernadino County (53 percent), Tulare County (54 percent), Merced County (55 percent) Kings County (61 percent). The average for the country at large is 58 percent, so big points to Kings County for being the only one to beat the national spread.

CAR also estimates that the minimum qualifying income to buy in San Francisco is $254,000 annually. Our own San Francisco Association of Realtors says that the city’s median household income is a mere $77,700, not enough to recommend buying anywhere in the Bay Area except Solano County. The estimated qualifying income for the entire country is (wait for it) $44,500.

This makes sense when you consult the table about monthly housing costs. Assuming a down payment of 20 percent, owning a home in the city will run you about $6,350 a month on average. The median household income only brings in about $6,475 monthly.

If the preceding seven paragraphs haven’t scared you off the idea of buying a home (or, for that matter, living in California altogether), the CAR report coincides with a Paragon Real Estate Group study about buying in San Francisco that includes the somewhat optimistic headline "Where To Buy a House For Under $1 Million."

In the last 10 months, the southerly lying Portola and Excelsior districts had a combined 108 sub-million dollar sales, according to Paragon. Visitation Valley and Silver Terrace combined had 78, Bayview 59, and the Outer Sunset 58. Also, 16 very lucky people found Bernal Heights residences for less than seven figures last year, presumably on the same day they wished on a star.

Condo buyers with only $999,999 on tap had more options, with the South Beach/Mission Bay area leading the pack at 128 sales. The big, eastern swath of the Inner Mission, Dogpatch, Bernal Heights, and Potrero Hill had 125, and SoMa 97. Diamond Heights had the smallest number of "affordable" condo sales at a mere 16, although of course it’s not a big neighborhood to begin with.

All told, it looks like most San Francisco residents will continue to be renters for the time being. According to Zillow, the city’s average Q4 rent was $3,400. That’s higher than New York, and almost double that of LA, but a bargain compared to buying. Again, small victories.