According to the California Franchise Tax board, the median household income for married couples filing joint returns in the county of San Francisco was $71,529 in 2006. That’s 22% less than in Contra Costa, 33% less than in San Mateo, and 63% less than in Marin.
And assuming a 20% down payment, that $71,529 in income would most likely qualify said couple to purchase a home worth somewhere around $300,000.
Bay Area home to the state’s elite – 8 counties place in wealthiest dozen [SFGate]

41 thoughts on “Being Median In San Francisco Doesn’t Afford Anyone Much Of A Home”
  1. it would be interesting if someone were able to find the median income of HOMEOWNERS or even recent homebuyers.
    it doesn’t seem like it would be all that hard.
    go the the records of all new transactions.
    look at the income for the new buyers
    create a median.
    sure, there would be flaws, but it might show us something.
    as they say,something like only 33% of San Franciscans Own… and likely they have a higher median income than the renters…

  2. Given that 70% of SF residents are rentals, the median income vs median price means nothing.
    Look at all the other cities on the list. Which one has so many rental residents?
    A more meaning number may be the median income of the top 30% households.

  3. $300k for a 2bedroom house, or condo for that matter, is, no matter how much the economy and housing market slides, completely unrealistic and nothing more than a fantasy. We’re 7×7 miles at the tip of the most beautiful peninsula in the nation. People will always want to live here no matter how much the Dalys, Peskins, Ammianos and McGoldricks of the city try to screw it up.

  4. Looks like fluj is right, it is very different in CoCo…the median married couple earns 22% more than in SF.

  5. LL Possee .
    thanks for that link. it is very useful info.
    San Francisco County
    median $65,497
    Top 20% $242,318
    Top 5% $424,799
    Even though the difference between the top 20% and the median is pretty big, the funny thing is that the top 20% can barely afford a median priced condo. For $242K/yr, you can afford maybe a $800K condo mortgage papyment.
    I guess everyone buying the last 5 years has been in the top 5%

  6. “Forgive me if this comes across as insensitive, but $70k should be considered the poverty line for SF.”
    Foolio: I understand your point is tongue in cheek (since half of San Franciscans make less than $70k)… but that said, one can easily live in SF at a reasonable salary once you make a few easy concessions:
    1) rent
    2) especially if you rent in non-central locations (like outer sunset)
    3) forego eating out and doing expensive stuff (opera, Giant’s games, etc)
    4) decide to be born so that you could buy before the big run up (if you were born in the 50’s and 60’s as example)
    the problem is that people have “normalized” living in the nicest parts of town in the nicest condos/apartments and shopping in Union Square and all that.
    it’s an epidemic around the entire country.

  7. This US Census Bureau info is a year old, but relevant to the conversation.
    Data Set: 2006 American Community Survey
    Survey: 2006 American Community Survey
    San Francisco city, California
    Median household income in the past 12 months (in 2006 inflation-adjusted dollars) —
    Total: $65,497 +/-$2,833
    Owner occupied $98,054 +/-$3,884
    Renter occupied $50,329 +/-$1,873

  8. @ex SF-er:
    Yes, the normalization point is an excellent one. Still, I think that if my partner and I made $70k there’s absolutely no way we could afford to live here. And that’s just assuming two incomes and no kids. Add child costs into the equation, and it’s even worse.
    Oh, and to your list, I’d also add:
    5. Sell your car and take MUNI and Zipcar (sparingly).

  9. $70k combined income is very doable in San Francisco if you rent and do not own a car or have children. I should know, my partner and I do it. We don’t save like we should but we have a lot of room to downsize our style of living should the need arise.
    For us – not having a car is how we’re able to make it work. Having a car would take all our disposable income to the point where we’d have nowhere to drive once we got it! Parking, if it can be found, is going for $200-$300/mo in our neighborhood (Ashbury Heights) and parking tickets would be another $100-$200, plus insurance, plus gas. That’s assuming we bought a used car with cash. Right now we spend $100/mo for our City CarShare usage and that’s perfect.

  10. @Eric:
    Yes, the car costs are key. I also should have been clearer; for me, not saving is not an option. A “luxury” of making more than $70k, I suppose. I tend to think of saving as a necessity, whether I live in SF or IA.

  11. i would guess the standard deviation of income in SF is high too – i.e. the median is a pretty meaningless measure since there are more super-rich and more super-poor people in the city. Other counties are more homogeneous.
    funny, those other counties don’t have rent control. neither should we. sure, some poorer people would be forced to move to the other areas which would bring their statistics down, but overall the housing stock in SF would become more affordable for more “average” income people.

  12. “$300k for a 2bedroom house, or condo for that matter, is, no matter how much the economy and housing market slides, completely unrealistic and nothing more than a fantasy.”
    This wasn’t a fantasy until about 7 years ago at which point prices started appreciating at unrealistic levels. I think if you trend 1999 prices at a normal appreciation rate to today, you’ll realize this isn’t necessarily fantasy.
    Guess we’ll find out over the next 24 months won’t we.

  13. I recently checked my annual budget — 30K on taxes, 40K in expenses. We rent in the SOMA, have 2 kids, 1 car. Having 2 young kids pretty much force us into frugal mode since there’s no opportunity to go out/eat out/discretionary spending with 2 crying babies/toddlers to drag around. Certainly can be done if you don’t expect a certain lifestyle.

  14. re: poverty line comment:
    “A family of four in the Bay Area with two working adults must earn $77,069, equaling an hourly wage of $18.53, just to pay for basic necessities, a study released today calculates. If only one adult works, that figure falls to $53,075, largely because the family doesn’t have to pay for child care, according to the report by the California Budget Project, a liberal Sacramento research group. But that one wage-earner must make $25.52 an hour.”

  15. @onkrak It was a fantasy 7 years ago. You are right that condos are still overvalued in SF and have some more to fall. You are wrong to assume (hope) that they will ever come back down to where average income sf residents will be able to buy. Like NYC SF is going to be a city of renters for ever. 1090 page st, a standard family-size condo, just sold for $707k. It last sold for $409k in 2001. Inflation adjusted that is 499k in 2007 dollars. So assuming that SF real estate should be pacing inflation its STILL too expensive for most people. The last time that neighborhood median sales price was under $300k was in 1998. But the last time it was under $300k in real dollars was in 1991, just after the bottom of the early 90s bust.
    In 1988 the median price in that neighborhood was $342k in real dollars. The fact is that SF is now, and barring a major disaster, always will be an expensive place to own a home. Sure the super-sf boosters are wrong and the prices are going to keep falling for a couple of years. But if you think you can wait around for condo prices in SF to be the same as Denver you are going to be waiting a long time.

  16. What people seem to be overlooking is that much of the money people are using as a down payment often comes from the sale of another property, help from parents, stock options (my case), etc. Even at a 200K HHI, it would take some years before someone could afford to save up enough for a good sized down payment. But people sell in one place (Marin, NY, where ever) and then roll the money into a property here. Or they start small and trade up over the years. I don’t think it matters all that much how much the high end units are, it’s the fact that SF, unlike many other places, has a very small starter home market. If I was buying now, even making a good income, I’m not sure how I’d do it.

  17. ex SF-er:
    I don’t know that anyone has normalized living in the nicest areas of sf. up until just the past few years, normal people could afford to live in nice parts of sf… noe valley, nob hill, lower pac heights, etc. but even the less nicer parts of the city have been exponentially appreciating. the character of the western addition and the mission have changed less than the disproportionate ratio of income/price appreciation.
    a family earning the median income can’t afford to buy anything, other than maybe a 1 bedroom basement unit in a tic. you need to be in the top 20% to afford to buy in visitacion valley or bayview. that’s a major, historic shift in the dynamic of the city, and seemingly a potentially cascading displacement of 80% of the city’s population.

  18. To contrast the real estate bubble over the last 7 years, here is my rental story:
    July 2001 to Nov 2003: $1250/ month studio in Nob Hill – at some point I got a reduction in rent to $1100/mo.
    Nov 2003 to Mar 2007: $1100/ month studio in Marina – when I moved out the new tenant paid $1500/mo.
    Mar 2007 to current: $2000 / month for a 1-bedroom I share with my g-friend in the Marina, of which I pay $1250/mo.
    My situation hasn’t benefited much from rent control, so it is interesting how renters have been sheltered from the nonsense of irrational exuberance.
    And lastly, the only way I have been able to justify living in the city is that I don’t have a car.

  19. The top 20% of family income in SF starts at $250k/yr. You can certainly afford a better neighborhood than VV at $1/4M/yr income.

  20. All about knowing what the median income is for the prospective real buyer, not the median income of a city where 70% are renters.
    Go to any Venture Capital or Private Equity shop. If you have 8 years experience, you’re making alone $500K-1mil++/yr add a spouse and you can see why 1-3 million places have so much demand.

  21. Notice that those numbers spencer posted are the *average* incomes in those brackets. So, it is not that 20% of the households in SF make $242k or more. It is that among the top 20% the average income is $242k.
    Only 9.2% of households in SF earned more than $200k in 2006 according to the US Census ACS.

  22. I find it interesting that I don’t find mention that the median income qualifies for a BMR unit in one of the new developments in many cases…. And oh, those nasty market rate units subsidize the cost on these units, so those paying market, here’s what your housing cost pays for.
    From the Mayors Office of Housing:
    2008 Qualifying Income Maximum Amounts
    (Your household must make no more than these amounts by household size)
    100% of Unadjusted Area Median Income (AMI) for HUD Metro fair Market Rent Area (HMFA) that contains San Francisco 2008
    For most new units, your household must make no more than the following amounts per household.
    A one person household can make no more than $66,000
    A two person household can make no more than $75,450
    A three person household can make no more than $84,850
    A four person household can make no more than $94,300
    A five person household can make no more than $101,850
    A six person household can make no more than $109,400
    A seven person household can make no more than $116,950
    (Please contact us for information on larger households.)
    100% of Median Income for the City and County of San Francisco 2008
    For some new units, however, your household must make no more than the following amounts per household. These units will be priced using a new San Francisco-only income table. Again, we will clearly note on each new unit announcement which table we are using.
    A one person household can make no more than $58,050
    A two person household can make no more than $66,300
    A three person household can make no more than $74,600
    A four person household can make no more than $82,900
    A five person household can make no more than $89,550
    A six person household can make no more than $96,150
    A seven person household can make no more than $102,800

  23. so if only 9.2% of households make over $200k, but (according to a story in the chron this week) you need an income of $170k to afford the median $700k home in SF… isn’t that a little strange? That’s what I don’t get. In the 700k range, you’re looking at a ground floor unit in in a TIC, or a single family home in the southeast part of town. it makes no sense. there are one bedroom units, and rundown shacks, but you won’t find any of those for less than 400k, and you would need a six figure salary as an individual or couple to buy one of those. it seems like the city has to be due for a correction. the price of housing is way out of scale, and the city is never going to be comprised almost entirely of people in the top 10$ of the income distribution, because there are many options for those people.

  24. hj:
    it doesn’t make sense because SF went through a RE bubble, just like almost every other major city in America save Detroit.
    housing is simply unaffordable. The monthly payments were brought down by exotic mortgages. This is why 70%+ of mortgages in SF are Alt A now. (and many are ARMs) 3-4x the number of ARMs in 2000. People can’t afford traditional financing.
    if one was prudent with their money they have a choice: rent, or go “all in” and take an ARM to compete with the financially reckless.

  25. FWIW:
    I understand that it is impossible to buy making $77k unless you take out a crazy loan… see my post above.
    I just think that people overuse the word “poverty”.
    Poverty isn’t living in Sunset in a 3Br Apartment with 2 working parents and 2 kids in daycare, “only” going to a movie once a month and rarely to Giant’s games.
    Poverty is being on the verge of homelessness, or not having enough food to make it through the month
    If you make $77k in the city you are nowhere near poverty. half of all HOUSEHOLDS make less than that.
    so is SF rich? or impoverished? because half of people make <$77k.
    and less than 10% of people make over $200k.
    You wouldn’t know it though, because people around here say “SF is so Rich. everybody here is so rich. most people here buy Maybachs for their kids they’re so rich… and everyone buys their houses in cash”.
    it’s simply not true. SF is affluent compared to many cities. but it’s a very small segment of the population that is uber affluent… the rest are middle class just like everywhere else.
    the difference: your dollar doesn’t go as far in SF. but that doesn’t make you “poor” it just means you give up a big house and you get a “world class” city.
    you could also move to Iowa. And then you could have 3 cars and a 4,000 sq ft house. but you’d have to deal with colder winters and a smaller city. it’s all a tradeoff.

  26. There was also an article once that showed a large majority of both renters and owners spent more 50% of their income in housing. And the distribution was pretty similar down the percent axis, ie 10% owners spend 15% of income 10% renters spend 15% of income, etc..
    The majority of people cannot afford the current housing market, but that’s been true for a long time. Can a household of $75K really afford a $300,000 home? After all, they’d have to have $60K for down, plus $5,000 for taxes and probably another 10 grand for miscellaneous closing costs, basically nest away a whole years salary. That’s not easy, and nearly impossible for anyone with a family.
    I mentioned once that people have to make sacrifices to live in this City, many attacked and said we should not have to. Regardless, the reality is that we do.
    What I find ironic is that during the dot-com boom, most papers reported about how ‘monied’ all of the young hipsters in the Mission were and there was no other place more expensive to live than SF. All of it sensational and oh so very COOL, all of my friends welcomed the change. I kept thinking this is terrible as I saw Space Lady and all of the other colorful people that used to hang around in the Castro move away, along with many of those involved in the arts. Now we are left with a very different City. But still would’nt live anywhere else.

  27. So I took a look at the listings. How many SFHs are available at $300K or less?
    One.Just this charmer.
    2 Bed, 1 Bath
    900 Sq. Ft.
    1487 McKinnon Ave
    San Francisco, CA 94124
    Property Type: Single Family Home
    Single Family Property, Area: Bayview, County: San Francisco.
    There are also 18 condos available for $300K or less.

  28. According to the census data posted above, the Median income for New York County is $60,017 in 2006. And that’s a huge county with over 1.5 Million people.
    With average rents and housing costs even higher than SFC, how the hell are they doing it?
    750,000 people making less than $60K living in Manhattan. Unfathomable!

  29. to clarify, the $300K reference was meant to go back 10 years ago, although, back then, I’m not sure the avg. income was what it is today.
    I don’t know where space lady went, but she was ‘spacey’, and I’m not sure if you ever heard her sing “la vie en rose” but she confessed to me that she just made up the words to sound french LOL. Times have really changed. That’s life.

  30. logscaler:
    if you look on google maps, it looks like 1487 mckinnon is directly facing the projects in the hunters point area… and just searching for the address brings up news stories of random shootings. scary.

  31. i’ll say it again. RENT CONTROL. what a coincidence – NY and SF both have it. if we got rid of it 1) rents and property values would go down and 2) average income would go up (cuz poorest people would be forced to move). both the numerator and denominator of affordability would look more “normal”. maybe it’s time for a free market economy in SF

  32. In the 700k range, you’re looking at a ground floor unit in in a TIC, or a single family home in the southeast part of town.
    I see 20 SFH for under $700k in The Sunset (District 2). There is plenty of housing for that price outside the Southeast corner of town.

  33. 700K can buy you a nice 2BR condo in S.F. For example, 199 Tiffany Avenue #403 (sorry I can’t figure out hyperlinking).

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