Marcus Hiles: The Climbing Housing Market Is Exceeding Incomes and Growing Nationwide
SAN FRANCISCO, March 26, 2019 (GLOBE NEWSWIRE) -- San Francisco, one of the country’s most well-known Californian cities is sitting among the top-priced housing markets that are continuing to outpace the median income of their residents. The topic and forecast of home ownership have been fluctuating month after month as many popular areas have hit, and even far exceeded market value in just the last two years. What analysts are seeing is a willingness from buyers to pay top dollar for properties that may have surpassed their true market value.
It could stem from the entry of a new generation into the buyers’ market that has grown accustomed to exceeding previously established financial guidelines of decades past. With more emphasis on supplemental funding, including higher loans and larger mortgages; now more than ever home buyers are seemingly valuing popularity and opportunity over financial sacrifice. “This may come as a move to position oneself ahead in terms of prime real estate location for career, education, and community rather than focus on short-term financial gains. But even as home buyers are willing to take out higher loans and pay, in some cases, inflated market rates, the majority of residents aren’t getting any closer to catching up with the financial demands popular locations are continuing to require,” shares property developer and CEO of Western Rim Properties Marcus Hiles who has tapped into the demand for rental properties as an alternative to high-priced home ownership.
San Francisco has always been a city whose property market catered to higher income demographics able to meet the nearly million+ price range for what is considered in most US locations to be middle class accommodations. In fact, a recent study done by NY-based Smart Asset, an online financial advisor site, reports the average median home in the California city comes in at just under $960k. This is a staggering difference between other cities studied in their 2019 Edition study, “Salary Needed to Afford Home Payments in the 15 Largest U.S. Cities” which noted San Fran as the most expensive of the three Californian cities analyzed which included San Diego and LA.
The big question answered by the report: does the average annual income of residents in these top cities match up with the current housing market? With the report concluding findings based on the current market and financial demands of home ownership, it seems the answer is pretty clear for residents of San Francisco. A minimum of $176,000 annually is reported to be just the baseline necessary to purchase and maintain a home while staying afloat of monthly housing costs, that include mortgages, utilities, maintenance and property tax.
Comparative to the average annual income reported by the city in 2018 of a single-person household bringing in $82,900 each year, while a family of four pulled in around $118,000 it seems to be a market that not many can compete with. With the predictions of analysts forecasting the housing market soon reaching its peak, it will be up to residents of these high-priced areas to ensure their property investments are setup for future success not just immediate reward.
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