This week I visited my friend Patrick Carlisle, chief market analyst at Compass, to catch up on market talk. He knows Bay Area real estate better than anyone, and three charts from his latest report jumped out at me:
(1) The first one shows the staggering San Francisco home price appreciation from 1990 to present.
(2) The second one shows median home prices for 2Q18 across all Bay Area counties, which are drastically above the national average.
(3) The third one shows minimum qualifying income needed to purchase at current prices. Each person needs to be qualified properly by a lender to truly know what they can afford, but this dataset gives us a feel for market levels.
This last chart is particularly interesting because it shows two things: how badly the Bay Area needs inventory to help control prices, and how much money you need to make to buy a home in the San Francisco Bay Area.
Some explain away inflating Bay Area home prices by saying this is where all the high paying jobs are being created. The job creation is real, but last I checked, employers aren’t looking to pay every employee $219,380.