This says more about the arbitrary nature of using city boundaries for studying home pricing than anything else. San Francisco certainly has high prices, but it also has one of the smallest footprints of any major city, and has lots of nearly-indistinguishable residential areas that are adjacent but fall outside its boundaries, particularly to the South and East. If you look just at pricing within the city boundary, it's going to be inflated by the fact that such a large percentage of that area is still relatively close to the "city center" and benefitting from the value that creates.
Meanwhile, "New York City" (which ranked lower on median price) includes large residential expanses that are much further away from the city center, including Staten Island. (Not to mention Los Angeles, which is what, 50X the size of SF proper?)
I'd like to see this comparison done for say, Manhattan island vs. San Francisco - that would be a much more apples-to-apples compare.
One of the interesting bits then is the differences between the common meaning of a city and the statutory boundaries.
What people mean when they say "New York City" and what it actually is are more or less the same thing (though most people are surprised at how big and diverse the 5 boroughs actually are). People don't really count the NYC Metro area in the equation. Nobody who visit Trenton or New Haven comes back home and says "I went to New York".
When people say lots of other cities, they really mean the metro area. "Washington D.C." refers colloquially to the 7th largest urban area in the country. People can make regular repeated visits to Arlington, or Fairfax or wherever and still go back home and say "I just went to D.C.".
I suspect SF is the same. People can visit anywhere in the Bay Area and go back home and credibly say "I visited San Francisco" even if they never actually stepped foot in the city proper.
edit I notice everybody who disagrees with this premise lives or is from the Bay Area where these things matter. On the other side of the country, all of California north of Monterrey is basically "San Francisco", most people think Oakland is part of L.A. and nobody could pick out SV on a map if their life depended on it.
I think the exact boundaries to use for comparison are really difficult to pick, and vary on an individual level. For instance, the superb connectivity of the public transportation makes me feel as if Brooklyn, Queens, the Bronx (sorry Staten Island) are very much a part of NYC. I did not feel this way living in Mountain View; SF felt like a major chore to get to and a different world of its own. Plus it helps that the boroughs have the urban amenities I associate with a city that the suburban Bay Area towns like Mountain View lack.
So, while you might personally want to compare SF to Manhattan (which is totally fine based on what you value), when I think of my own quality of life metrics, I consider the NYC boroughs (excluding Staten Island) a cohesive unit that the SF Bay Area is not.
This was the metropolitan area, though. If you look at the chart, the top-left column states "Top 25 metropolitan areas, by population". After all, everywhere in Silicon Valley is expensive, not just SF proper. San Jose is not itself cheap.
That's absolutely right, and in the few articles I've seen that break out Manhattan, it's still significantly more expensive than SF. Of course, that's old news, right? And being old news, "Manhattan is the most expensive place to live" doesn't fit into the current tech boom, linkbait narrative that all the blogs and news outlets are exploting.
That's funny, because I often make the opposite point about SF. Living in the Boston area, there are areas of Boston that are as expensive as SF (Back Bay, South End), but I can go a very short distance out of the city (Somerville, Medford) and find considerably cheaper housing.
I feel bad for the people who grew up in the area and feel connected because of family or whatnot. As a software engineer NOT from SF, it's probably the last place in the country I'd move to - we have such a relative abundance of remote opportunities compared to other professions. I don't really see why I'd be willing to pay maybe up to 4x+ my housing cost for perhaps a 15% increase in pay. It's a nice place and all, but geez.
>I feel bad for the people who grew up in the area
The people who grew up there (whose parents owned homes) are doing quite well (at least their parents are) because of the vast appreciation of their homes. Among some of my wealthy friends that have paid ridiculous prices for real estate in SF, I have heard the rather condescending term "thousand dollar millionaires" used to refer to these long-term homeowners that did nothing to create a $1M+ net worth other than pay their mortgage and live in the same place for decades.
Anyway, it's not the people who grew up there that you should feel bad for. It's the people that need to be there for one reason or another and can't afford a living wage with the incredibly inflated prices and taxes associated with living in SF and California in general.
I grew up in the area, and I no longer want to go back; and neither do most of the friends I grew up with. It has not only gotten more expensive, but the culture has changed significantly.
The intransigent "family farm" that is ingrained in the American psyche is being eroded by a practical reality - and on some level everyone feels it. The newer generations are increasingly less attached to their place of birth. The Bay Area is rapidly changing, and I'm happy for all the people that now live there and call it their home.
It's no longer my cup of tea, but I'll find my place somewhere else. Please don't feel sorry for me =)
Well, that's my family. Grew up in the East Bay and my family has been there for 4 generations. My dad bought the house in '81 for ~60 and now the house next door is in negotiations for about 600. That's a 1000% increase. Compare this to wages, and it's still bad. These are 1 bath, 3 bedroom single story 1.5 acre plots. Basically, Levittown houses. Granted, the elementary is 3 blocks away.
But still, it's insane in the Bay property market again. Anyone from the Bay knows a bubble when we see one by now. When all the hipsters and their credit-cards run out, the market will crash and the locals MIGHT be able to buy something again. There is also the elephant in the room called Prop 13 that is not mentioned here. That, among all other bubble ingredients is the main reason why property in the Bay is the way it is.
The pay differential for software engineers in the SF Bay Area is much more than 15%. The average adjustment for all jobs in San Francisco is about 40% higher than the national average.
Looking at BLS data, jobs for Software Developers in San Jose-Santa Clara are actually about 15% higher than the next highest municipal area in the US (Seattle-Bellevue). The average Software Developer job in San Jose-Santa Clara makes $28,000 more than the same job in the New York Metropolitan Area.
Still cheaper than Vancouver with a $922K benchmark house price[0] ($847K USD) in Greater Vancouver area, or $2.1M in Vancouver West. Factor in Vancouver's lower salaries and higher mortgage costs, and SF looks particularly cheap in comparison!
I thought much the same thing. While it is high it is relative to global demand areas for houses (units and apartments are in a different category for a reason). Demand is high in SF and it isn't just because of the tech industry.
Some stats for Australia just to put another perspective into the mix.
This doesn't take into account median salaries. It's possible that the median salary in SF is $200k and everything is OK (it isn't $200k though). While it doesn't really affect the results of this article, it's important to always consider that like-for-like comparisons are being made.
Like I said, the numbers don't change much but if you're curious, here are the results:
San Francisco-Oakland-Fremont metro area 8.84
San Diego-Carlsbad-San Marcos metro area 7.52
Los Angeles metro area 6.98
New York metro area 5.87
Miami (FL) metro area 5.25
Seattle-Tacoma metro area 5.11
Boston metro area 5.10
Riverside-San Bernardino-Ontario metro area 4.71
Washington (DC) metro area 4.10
Phoenix-Mesa-Glendale metro area 3.57
Baltimore metro area 3.52
Philadelphia metro area 3.46
Houston metro area 3.17
Tampa-St. Petersburg-Clearwater metro area 3.06
Chicago metro area 3.05
Dallas-Fort Worth metro area 2.99
Minneapolis-St. Paul metro area 2.95
Atlanta metro area 2.48
St. Louis metro area 2.41
Detroit metro area 1.29
Interesting numbers (I live in San Diego-Carlsbad-San Marco metro). I make 3x+ the median income of my hometown in Maine, but here I only rent a single bedroom in a larger house. I'd love to own....but I've known for a while that my options are either move or make more.
Would you happen to have a source for the numbers? Thanks!
Not SF, but my wife and I are trying to buy a house in Silicon Valley. I can't imagine how this market is sustainable, but all the evidence is that there is no hope for improvement. It's disheartening to say the least.
My wife and I are ~30 years old, have $500k in cash saved, and our combined salary is ~230k. So we are in the upper upper range of earners, and not looking for sympathy. But even with that, we are unable to buy a house or townhouse in mid-range neighborhoods here. The houses all go for 1.3-1.5 M. I don't see that ever being feasible for us.
I don't know that I have a point, other than an anecdote of what this looks like on the ground. I know we could commute or move to a lesser area, but how are there enough people to maintain the volume of ongoing purchases of all these $1.5M houses?
You don't need a 200k a year job to buy a house here. What you do need to do is be practical about where you are buying and have about 10% of the purchase price in your savings account. For someone in the low six figures, it is possible to buy, but it will be in the up and coming parts of town, like Ingleside, Bayview, and Visitation Valley.
There is also a reverse advantage of making too little. The mayor's office of housing offers first time buyers condos below market rate. The cap is about 90k for a single person, depending on the property, and works out to about 33% of that person's pre-tax income for a mortgage payment plus HOA dues. There is a lotto to get in on this deal, and there are some steep re-sell restrictions, but for those who want to own it is a real option. For those who make even less, under 60k, the city will help out with an interest free loan up to 100k.
Owning in SF is very possible for those who are willing to put in the work and deal with the red tape.
Wait, there is really a way to get an interest free home loan to buy in SF? What are the criteria? Do the terms change if your employment status changes? This screams manipulation to me: Take a $59K job no matter what your qualifications. Get the home loan. Buy. Begin applying for better jobs. Even if you can't resell, a below market home and an interest free loan is incredibly valuable, and if it's in an area you don't want to live, just rent it (under the table if need be).
Do you have a link to the details on this? I'm curious.
Yep. Almost everyone I know who has bought in the Bay Area (including myself) has gotten help from relatives to come up with the down payment.
Nowadays, you pretty much need all cash to have a chance at a decent place; money is flowing in from China and investment firms like Blackrock, who are buying up all the properties they can get and turning them into rentals.
Shouldn't you be able to buy a house alone? And shouldn't you be able to work part-time and pay for college? What you're missing is that you used to be able to do these things but inflation has far outpaced income in certain areas of the economy, and now it's much harder.
The water is getting hot slowly and the frogs can't tell that the water is starting to boil.
Renting in SF comes with its own set of strings and scams/opportunism, for example a lot of condos set out an attractive initial rent, but then either (a) tack on ridiculous extras like paying for water, and/or (b) raise your rent by a ridiculous amount after your first year.
Renting in SF is a strong value if you plan to live here for a while, but the property needs to be protected by rent control, otherwise you'll get wiped out during the booms and busts this city has.
Owning is also a strong value over the long term, but it is more complicated between taxes, mortgages, and city ordinances; it also comes with a lot more risk and way more upfront costs.
For people just moving to the city and haven't established any roots, don't rent or own: be a roommate. It is the best deal possible and you'll be own your way to making this place your home, if you want it to be.
Buying in SF is currently cheaper then Renting[1] not to mention its one of the best investments out there (better then apple stock over the past 2 years) [2]
I don't really think throwing away $3k+/month for a small 1 bedroom is a better option. At least have that money go towards a mortgage and get the tax deductions on interest...
I see a lot of posts about 'incredible' prices in SF and The Bay. But I'm living in Paris and a medium apartment (1400-1600sq ft) here is around €800-1M (±$1-1.3m). And we have 45% taxes ...
... and I did think SF is expensive ... average semidetached house with small garden in a suburb of Munich, Germany (1h commuting): 950k USD, quite an average price here. And the salaries are lower than in SF while cost of living is higher. 770k USD in SF looks like a bargain :-)
A simple and obvious problem is that elementary and high school teachers in SF are making $40k-60k/year. So even if you and your spouse are making >$100k/year and living comfortably in your sf apartment the teachers teaching your kids can barely afford to live in the city.
[+] [-] tomkarlo|11 years ago|reply
Meanwhile, "New York City" (which ranked lower on median price) includes large residential expanses that are much further away from the city center, including Staten Island. (Not to mention Los Angeles, which is what, 50X the size of SF proper?)
I'd like to see this comparison done for say, Manhattan island vs. San Francisco - that would be a much more apples-to-apples compare.
[+] [-] bane|11 years ago|reply
What people mean when they say "New York City" and what it actually is are more or less the same thing (though most people are surprised at how big and diverse the 5 boroughs actually are). People don't really count the NYC Metro area in the equation. Nobody who visit Trenton or New Haven comes back home and says "I went to New York".
When people say lots of other cities, they really mean the metro area. "Washington D.C." refers colloquially to the 7th largest urban area in the country. People can make regular repeated visits to Arlington, or Fairfax or wherever and still go back home and say "I just went to D.C.".
I suspect SF is the same. People can visit anywhere in the Bay Area and go back home and credibly say "I visited San Francisco" even if they never actually stepped foot in the city proper.
edit I notice everybody who disagrees with this premise lives or is from the Bay Area where these things matter. On the other side of the country, all of California north of Monterrey is basically "San Francisco", most people think Oakland is part of L.A. and nobody could pick out SV on a map if their life depended on it.
[+] [-] ceras|11 years ago|reply
So, while you might personally want to compare SF to Manhattan (which is totally fine based on what you value), when I think of my own quality of life metrics, I consider the NYC boroughs (excluding Staten Island) a cohesive unit that the SF Bay Area is not.
[+] [-] scythe|11 years ago|reply
[+] [-] defilade|11 years ago|reply
[+] [-] jonnycat|11 years ago|reply
[+] [-] diziet|11 years ago|reply
[+] [-] rscale|11 years ago|reply
[deleted]
[+] [-] mbillie1|11 years ago|reply
[+] [-] downandout|11 years ago|reply
The people who grew up there (whose parents owned homes) are doing quite well (at least their parents are) because of the vast appreciation of their homes. Among some of my wealthy friends that have paid ridiculous prices for real estate in SF, I have heard the rather condescending term "thousand dollar millionaires" used to refer to these long-term homeowners that did nothing to create a $1M+ net worth other than pay their mortgage and live in the same place for decades.
Anyway, it's not the people who grew up there that you should feel bad for. It's the people that need to be there for one reason or another and can't afford a living wage with the incredibly inflated prices and taxes associated with living in SF and California in general.
[+] [-] rdrdss23|11 years ago|reply
The intransigent "family farm" that is ingrained in the American psyche is being eroded by a practical reality - and on some level everyone feels it. The newer generations are increasingly less attached to their place of birth. The Bay Area is rapidly changing, and I'm happy for all the people that now live there and call it their home.
It's no longer my cup of tea, but I'll find my place somewhere else. Please don't feel sorry for me =)
[+] [-] Balgair|11 years ago|reply
But still, it's insane in the Bay property market again. Anyone from the Bay knows a bubble when we see one by now. When all the hipsters and their credit-cards run out, the market will crash and the locals MIGHT be able to buy something again. There is also the elephant in the room called Prop 13 that is not mentioned here. That, among all other bubble ingredients is the main reason why property in the Bay is the way it is.
[+] [-] jlmorton|11 years ago|reply
Looking at BLS data, jobs for Software Developers in San Jose-Santa Clara are actually about 15% higher than the next highest municipal area in the US (Seattle-Bellevue). The average Software Developer job in San Jose-Santa Clara makes $28,000 more than the same job in the New York Metropolitan Area.
[+] [-] JOnAgain|11 years ago|reply
Where are you working? Total comp in the bay is often much higher than other areas (data-points from Seattle, LA, and New York)
[+] [-] biot|11 years ago|reply
[0] http://www.theglobeandmail.com/report-on-business/vancouver-...
[+] [-] jmj4|11 years ago|reply
[1] http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...
[+] [-] Tsagadai|11 years ago|reply
Some stats for Australia just to put another perspective into the mix.
Median house prices for Melbourne: http://www.reiv.com.au/Property-Research/Median-Prices
Median house price for Sydney: http://www.smh.com.au/business/the-economy/sydney-melbourne-...
[+] [-] msie|11 years ago|reply
[+] [-] martingordon|11 years ago|reply
Like I said, the numbers don't change much but if you're curious, here are the results:
[+] [-] daveslash|11 years ago|reply
Would you happen to have a source for the numbers? Thanks!
[+] [-] shasta|11 years ago|reply
[+] [-] cantbuyahouse|11 years ago|reply
My wife and I are ~30 years old, have $500k in cash saved, and our combined salary is ~230k. So we are in the upper upper range of earners, and not looking for sympathy. But even with that, we are unable to buy a house or townhouse in mid-range neighborhoods here. The houses all go for 1.3-1.5 M. I don't see that ever being feasible for us.
I don't know that I have a point, other than an anecdote of what this looks like on the ground. I know we could commute or move to a lesser area, but how are there enough people to maintain the volume of ongoing purchases of all these $1.5M houses?
[+] [-] poulson|11 years ago|reply
[+] [-] ateeqs|11 years ago|reply
I guess, I would say, you should use your "gut-feelings." If something doesn't feel right, something probably isn't right.
[+] [-] TheCoelacanth|11 years ago|reply
[+] [-] ashayh|11 years ago|reply
[+] [-] pdx6|11 years ago|reply
There is also a reverse advantage of making too little. The mayor's office of housing offers first time buyers condos below market rate. The cap is about 90k for a single person, depending on the property, and works out to about 33% of that person's pre-tax income for a mortgage payment plus HOA dues. There is a lotto to get in on this deal, and there are some steep re-sell restrictions, but for those who want to own it is a real option. For those who make even less, under 60k, the city will help out with an interest free loan up to 100k.
Owning in SF is very possible for those who are willing to put in the work and deal with the red tape.
[+] [-] the_watcher|11 years ago|reply
Do you have a link to the details on this? I'm curious.
[+] [-] mbesto|11 years ago|reply
[+] [-] aresant|11 years ago|reply
[+] [-] duderific|11 years ago|reply
Nowadays, you pretty much need all cash to have a chance at a decent place; money is flowing in from China and investment firms like Blackrock, who are buying up all the properties they can get and turning them into rentals.
[+] [-] aetherson|11 years ago|reply
[+] [-] minimaxir|11 years ago|reply
[+] [-] melling|11 years ago|reply
The water is getting hot slowly and the frogs can't tell that the water is starting to boil.
[+] [-] justizin|11 years ago|reply
[+] [-] free2rhyme214|11 years ago|reply
[+] [-] yid|11 years ago|reply
[+] [-] pdx6|11 years ago|reply
Owning is also a strong value over the long term, but it is more complicated between taxes, mortgages, and city ordinances; it also comes with a lot more risk and way more upfront costs.
For people just moving to the city and haven't established any roots, don't rent or own: be a roommate. It is the best deal possible and you'll be own your way to making this place your home, if you want it to be.
[+] [-] mikeryan|11 years ago|reply
Buying in SF is currently cheaper then Renting[1] not to mention its one of the best investments out there (better then apple stock over the past 2 years) [2]
[1] http://www.trulia.com/trends/category/rent-vs-buy-index/ [2] http://www.businessinsider.com/apple-stock-gold-or-bay-area-...
[+] [-] bicknergseng|11 years ago|reply
[+] [-] aaronblohowiak|11 years ago|reply
[+] [-] fallinghawks|11 years ago|reply
The question to me is why anyone feels they have to live in SF.
[+] [-] justizin|11 years ago|reply
[+] [-] ThibaultB|11 years ago|reply
[+] [-] marc0|11 years ago|reply
[+] [-] buckbova|11 years ago|reply
[+] [-] jgamman|11 years ago|reply
[+] [-] puppetmaster3|11 years ago|reply
I don't see a problem here.
[+] [-] jotux|11 years ago|reply
[+] [-] omilu|11 years ago|reply