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Income needed to buy a home in San Jose soars $19K in three months

“You guys suffer from limited supply maybe more than any other place in the country”

Aerial photo of downtown San Jose.
San Jose.
Photo by Tim Wilson

Mortgage company HSH Associates released another of its quarterly surveys estimating how much money a potential homebuyer should earn before attempting a foray into the real estate market in most major cities. Today’s news is that, unless you’re the sort of person who gets paid in giant sacks bearing dollar signs, buying in San Jose is a difficult prospect.

Last November, HSH recommended pulling in at least $216,181 annually before trying to put down roots in Silicon Valley, which was already absurd to begin with. But now the marker has bounced up an astounding degree in only months, coming in at $235,646 in the latest tabulation.

That’s a spike of more than $19,400 since the fall. For perspective, San Francisco’s figure went up roughly $5,000 (to $176,121/year) during the same period—a queasy trajectory in and of itself—while the national figure dropped more than $800 in the same period.

Statistically, the increase is actually just 0.8 percent in both SF and San Jose.

This same time last year, the recommended salary in San Francisco was a little less than $160,600, which, if true, would mean that the effective barrier to buy went up more in San Jose in the past three months than it did in San Francisco all year.

Quarterly activity is one thing, but the California Association of Realtors reports that, year over year, the median price of a home in Santa Clara County is up 26.1 percent since last year, with which HSH concurs.

“You guys suffer from limited supply maybe more than any other place in the country,” HSH’s Keith Gumbinger told Curbed SF. “In fact, for the quarter there’s only a handful of places in the country where prices were up. So this is not a blip, it’s actually bucking the trend.”


HSH calculates what an earner can afford by assuming a 30-year, fixed-rate mortgage at 4.12 percent and sticking by the U.S. Census-approved formula that says a household should spend no more than 30 percent of its monthly income on housing.

Note that the company’s analysis includes the larger San Jose-Santa Clara-Sunnyvale region as part of “San Jose” and the larger SF-Oakland-Hayward census tract as “San Francisco.”

The latest estimates by the U.S. Census record a median San Jose (city only) household income of $90,303, and a median San Francisco County income of $87,700.