You need an annual income of $137,129 to purchase a home in San Francisco, according to mortgage research firm HSH.com; that number lands this city in the number-one spot nationwide — and by quite a margin. Second place is occupied by San Diego, where you’ll need to pull in $98,534 to purchase a home.
Consider that the median household income in San Francisco is about $72,000 (see “The shape-shifting city,” page one of this issue). The estimates are based on median home prices, mortgage rates, and standard assumptions of debt and 20 percent down payments.
If it matters, Cleveland’s house buyers only need to earn $29,788.
MAYOR LEE SAYS THE HOUSING IS COMING
Speaking at the opening of the new Rene Cazenave Apartments complex, San Francisco Mayor Ed Lee said the city was making progress toward reaching his goal of developing or rehabilitating 30,000 new homes by 2020. “With more than 2,000 homes completed for residents in the first quarter of 2014, we are well ahead of our annual goal of completing 5,000 units a year,” the mayor said. “And by continuing to prioritize housing projects such as the Rene Cazenave Apartments, we are delivering on our pledge to help San Francisco families and residents from all levels of the economic spectrum call San Francisco home.” Those numbers compare to just 2,499 new housing units constructed in all of 2013.
A key part of the mayor’s pledge is that at least one-third of the 30,000 new or rehabbed units will be affordable to low-income families and a majority to people in the middle class.
CONDO PRICES ZOOM UPWARD
Available units are down and prices are going ever-higher for San Francisco condominiums, reports San Francisco Business Times real estate reporter Blanca Torres. In April, condominium prices were up 19 percent over April 2013, reaching an average of $1,115 per square foot for new condos. Not surprisingly, the law of supply and demand was having its revenge in this notoriously difficult-to-develop town; Torres writes that inventory (available units) was down by 45 percent from a year earlier.
NOT SO SPRAWLY AFTER ALL
As America’s population expands past 311 million and its cities continue to grow, some of them are doing better than others at containing sprawl onto nearby farmland and natural habitats. In the large-metro area category, the San Francisco area (defined as “San Francisco/San Mateo/Redwood City”) ranked as the second most compact, non-sprawling area in the country, according to the report “Measuring Sprawl 2014” released in April by research and advocacy organization Smart Growth America. The metro area ranked first is the New York City region.
The number-one most compact medium-sized metro area (with population between 500,000 and 1 million) was Madison, Wisc. — a fact worth noting only because this writer was born there.
Meanwhile, holding up the other end of the scales among large metro areas and taking home the award for the most sprawling is Atlanta, GA; Madison is counterweighted by sprawling Baton Rouge, LA, in the medium-sized category.
There are benefits beyond just not taking away the habitats of wildlife. “People in compact, connected counties tend to live longer,” the report notes. For every doubling in the score used to index metropolitan areas, “life expectancy increases by about four percent. For the average American with a life expectancy of 78 years, this translates into a three-year difference in life expectancy between people in a less-compact versus a more-compact county.”
Mortgage rates have continued to edge downward, reaching levels last seen 11 months ago, according to research firm HSH.com. The company’s Weekly Mortgage Rates Radar reported in late May that the average rate for conforming 30-year fixed-rate mortgages fell seven basis points to reach 4.20 percent.
“Mortgage rates have now bypassed six-month lows, heading all the way back to levels seen last June,” said Keith Gumbinger, HSH.com vice president. “Of course, rates were on the rise at that time, after then-chairman Ben Bernanke discussed coming changes in Federal Reserve policy, most specifically that the Fed’s [emergency bond purchase] program would end at some point. We’re now about midway through that ‘tapering’ process, and mortgage rates are lower than they have been in months.”
WHERE TO FIND A HOT HOME
“Located in the Sunny Google TechPath of Progress” — Promo text for Noe Valley home advertised on Redfin.