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Buying a home in SF means earning a $200K salary—at least

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As well as 40 years of saving for a down payment

An aerial photo of houses in San Francisco Via Shutterstock

Although the San Francisco housing market sputtered slightly over the past 12 months, the fact remains that most people will never be able to buy a home at market prices in the city.

According to the SF-based investment fund Unison, a home purchase in the city means decades of savings and upwards of $200,000 per year in income (taxes not included) just to keep up on payments.

Unison’s second annual Home Affordability Report, released in early June, assesses what potential homeowners need to procure housing in 35 major U.S. cities.

Naturally, San Francisco has the highest barrier of entry to buy.

“Nationwide, it takes 14 years to save for a 20 percent down payment on a median priced home for those earning the median income,” according to Unison. But in San Francisco that figure jumps up to a weary 40 years, the second highest in the nation behind only LA, which takes the top spot at 43 years.

It get worse: Assuming a down payment happens, keeping up with the mortgage can demand outrageous standards of income.

In San Francisco, Unison calculates a median monthly housing payment of $5,052, which means an estimated annual income of $202,094 to keep above water.

The report explains it reasoning thusly:

To estimate how much income it would take to a home [...we] calculate the associated monthly costs, assuming a 4.54 percent mortgage interest rate for 2018 data, and a 3.99 percent rate for 2017 data. Those rates represent the average annual Freddie Mac 30-year xed rates.

[...] In addition, property taxes of 1.25 percent per year on the median home value and home insurance costs of 0.4 percent per year on the median home value are included. [...] The required annual incomes reported are then constrained so that the monthly housing costs do not exceed 30 percent of gross income. This represents a conservative estimate of the percentage of income that can be spent on housing.

Based off a 2018 median home value (not price) of $1,031,732, that means roughly more than $200,000 annually to avoid extending monthly finances too far.

If that’s a 2018 estimate, then what does the same formula look like in 2019? Comparing Unison’s figurings with the most recent monthly analysis from mortgage firm HSH (released in May), a similar 4.53 percent mortgage rate and 20 percent down makes for a monthly payment of $4,345 and a recommended income of $186,250.

The lower figure comes as the result of a lower median housing price (not value) of $930,000 in HSH’s analysis.

However, when HSH says “San Francisco” it’s shorthand for the larger Bay Area, including San Francisco, Alameda, Marin, San Mateo, and Contra Costa counties, which is the main reason why the figures are lower.

Real Estate firm Compass estimated at in June of this year that a single-family median-priced house in SF costs $1.65 million, while a condo comes in at $1.25 million.

According to the U.S. Census, 21.2 percent of San Francisco households made $200,000 or more in 2017, and another 10.8 percent made between $150,000 and $199,000. The median income citywide was $96,265.