According to the California Association of Realtors, the median sales price for homes in San Francisco has fallen 0.5% on a year-over-year basis (up 2.1% for the greater Bay Area).
In related news, CAR’s new and improved “First-time Buyer Housing Affordability Index” indicates that affordability in San Francisco has fallen from 21% in Q3 2005, to 17% in Q3 2006 (but up from 16% in Q2 2006).
October 2006 Median Home Prices [CAR]
Affordability Is Up! (But Not Really) [SocketSite]
Housing affordability at 24 percent for first-time buyers in California [CAR]

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Comments from “Plugged-In” Readers

  1. Posted by badlydrawnbear

    does anyone know what the affordibility index would be under the old system. I know in LA it was something ridiculous in the low single digits and the new index put it up in double digits.
    Did something similar happen in SF?
    [Editor’s Note: Yep.]

  2. Posted by Dude

    I think the old index here was around 11% before they changed it. Don’t remember where I saw that. [Editor’s Note: Under the old index it was 9% in San Francisco. And you might have seen it here…]
    Old index was 20% down with a 30 year fixed. Median home price in SF is $750K, so a “starter home” here would be 85% of that per CAR guidelines, or $637,500. Assuming 20% down, you carry $510,000 at 5.87%. That’s a payment of $3,015 per month.
    Most SF couples could probably swing that payment since our median salary is around $75K/year. The question is who has $128K to put down on a place?

  3. Posted by badlydrawnbear

    Well that might be affordable for you two income hetro couples but what about us single income homos in SF. Makes my ‘household’ income half of alot of people in SF.

  4. Posted by Anonymous

    Dude–
    Coming from out of state (somewhere with a dose of sanity in real estate prices), I have a hard time understanding how a HH with $75k income could pull off a place with a mortgage of $3000+ per month. That’s half of gross pay going to residence before any other costs or taxes.
    I know lenders will go 50%+, but it doesn’t make any sense to me. And the herd mentality around it seems to only create/exacerbate/sustain a bubble effect (v. other areas where 28-36% of income is devoted to housing as a standard).
    It just doesn’t make a lot of sense…

  5. Posted by Dude

    I totally agree with you – and I don’t think the bubble will be sustained here or anywhere else. Real estate moves in long cycles – been going up unsustainably for nearly 5 years (double digit appreciation), so it makes sense it’ll take 3-5 years to get back to normal. Once defaults ramp up, lending standards will tighten and the price drops will be more evident….patience. But I digress.
    To clarify my first post, I read somewhere the average San Franciscan makes $70-$75K/year. So a couple would pull in $150K and could easily afford a $3,100 monthly payment. Again, provided they had $130K to put down, which most don’t.
    As for badlydrawnbear, I hear you. Most of my gay friends that own have bought with their partner. SF is too expensive to do it alone for 99% of us, regardless of your orientation.

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