Only 12 percent of SF households can afford a median-priced home in the city

Valentine’s Day notwithstanding, it’s hard to find a lot of love in San Francisco these days if you happen to be a potential homebuyer or someone paying off a recent mortgage.

The California Association of Realtors (CAR) released its most recent Housing Affordability Index this week and estimated that only 12 percent of San Francisco households could afford a median-priced single family home in the city at the end of 2017, the worst rating in the state.

CAR calculates affordability by determining the median price of a single family home (as determined by MLS sales in the quarter) and a mortgage payment based on a presumed 20 percent down payment, adding the national average mortgage rate, and then comparing that estimated monthly fee to the regional median income as estimated by the data firm Claritas.

As usual, the result is grim for San Francisco, since, according to CAR, a house in San Francisco now runs over $1.5 million on average.

That’s not a surprising figure, as outlets like Paragon Real Estate reported the same median nearly a year ago, but it’s enough to still plant us dead last in the state rankings.

The rest of the Bay Area didn’t fare much better, with only 14 percent of San Mateo County households able to afford similarly priced homes there and only 15 percent in Santa Clara County. Alameda County managed a bare 20 percent, and Contra Costa County 34.

Solano Count managed the best showing at 44 percent, and along with Contra Costa was the only place where affordability improved a bit since the previous quarter.

For context, CAR says statewide affordability rating was just 29 percent for single family homes in the fourth quarter, but 56 percent nationwide.

As usual, a few caveats: “afford” in this context means that a household will spend no more than 30 percent of its income paying for housing each month, which has long been something of a pipe dream for most California buyers anyway.

And in Paragon Research’s latest report of its own about the Bay Area, economist Patrick Carlisle reminds us that, “by definition,” half of the houses in a region cost less than the median price. He goes on to say, “[I]f condos were included in the calculation, median home prices would decline [and] affordability would increase.”

Note that, in the same quarter the previous year, CAR estimated an SF affordability rate of 13 percent based on an estimated median housing price of over $1.35 million.

Photo by Jorg Hackemann/Shutterstock

• HAI Fourth Quarter 2017 [CAR]
• Bay Area Affordability [Paragon]
• A House In SF Costs $1.5 Million [Curbed SF]
• HAI Methodology [CAR]
• HAI Fourth Quarter 2016 [CAR]