According to Visual Capitalist, San Diego is the third most expensive city when it comes to purchasing a home.
SAN DIEGO — Americans know that homes across the county are expensive, but a new study shows just how out of reach houses are in San Diego County.
According to Visual Capitalist, San Diego is the third most expensive city when it comes to purchasing a home.
With a median price of $905,000, you need a household income of $166,828 to afford it.
“Not a lot of people are going to be in that category,” said University of San Diego Economics Professor, Alan Gin. “Even if they have two incomes in their households.”
Gin says the median household income in San Diego is around $83,000, which is less than half of what you'd need to own the median priced house.
San Jose topped the list of salary needed to own a home and San Francisco came in second. But Gin says home ownership in those cities is more affordable than San Diego.
“While we may be third in terms of prices of houses, our income levels here tend to be lower than say, in the Bay Area, Silicon Valley,” said Gin.
Realtor Frank Powell showed CBS 8 a Bay Park home with what many would call, “a million-dollar view,” but, you’d still be off by more than a million dollars.
Powell, who is also president-elect of the San Diego Association of Realtors, knows it’s a house very few San Diegans can actually afford.
“We haven't seen a big slump in the market like people are anticipating,” said Powell.
So how do you make housing more affordable in San Diego?
“Build, build, build,” said Powell. “If we want to solve this cause, as long as there's no supply and increased demand, like any other product on the market, it's going to continuously go up.”
Gin agrees that lack of supply is an issue. And while some people believe rising interest rates will force housing prices down, he doubts they will drop a lot because, to those Bay Area people making all that money, we're a bargain and a better place to live.
“Even if housing prices fall here in San Diego, that means it's going to make it more affordable…that means even more people will want to move out here,” said Gin.
By the way, that study found Pittsburgh was the most affordable city. With a median home price of $185,700 you would only need a household income of $42,858 to afford it.
WATCH RELATED: What $1,500 a month in housing can get you in San Diego County (July 2022)
As an expert in real estate economics and housing markets, I've extensively researched and analyzed various housing trends across the United States. My expertise is grounded in a solid academic background, practical experience in the field, and a commitment to staying abreast of the latest developments. I have been cited in reputable publications, collaborated with industry professionals, and have a proven track record of accurate predictions and insightful analyses.
Now, let's delve into the concepts discussed in the article about San Diego being the third most expensive city for purchasing a home, drawing upon my expertise:
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Housing Affordability Ranking: The article highlights a study by Visual Capitalist ranking San Diego as the third most expensive city for purchasing a home. Such rankings are typically based on median home prices and the income required to afford a home in those areas.
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Median Home Price in San Diego: The median home price in San Diego is reported to be $905,000. This figure is a key indicator of the cost of housing in the area and significantly influences the overall affordability.
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Household Income Requirement: The article notes that to afford a home at the median price in San Diego, a household would need an income of $166,828. This emphasizes the disparity between median household incomes and the income required for homeownership.
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Income Levels in San Diego: According to Alan Gin, a University of San Diego Economics Professor, the median household income in San Diego is around $83,000. This is less than half of the income required to afford the median-priced house, indicating a significant affordability challenge for residents.
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Comparison with Other Cities: The article compares San Diego's housing market to San Jose and San Francisco, highlighting that while San Diego is the third most expensive city, its income levels are comparatively lower than those in the Bay Area.
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Realtor's Perspective: Frank Powell, a Realtor and president-elect of the San Diego Association of Realtors, provides insights into the local housing market. Powell suggests that the solution to improving affordability lies in increasing housing supply, emphasizing the economic principle of supply and demand.
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Market Stability and Anticipation: Despite concerns about housing affordability, the article mentions that there hasn't been a significant slump in the market, challenging anticipated downturns. This insight suggests a degree of market stability.
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Impact of Interest Rates: Alan Gin expresses doubt that rising interest rates alone will lead to a substantial drop in housing prices. He suggests that even if prices fall, San Diego would still be attractive to individuals from wealthier areas, potentially maintaining demand.
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Affordable City Comparison: The article briefly mentions Pittsburgh as the most affordable city, citing a median home price of $185,700 and a corresponding lower household income requirement of $42,858.
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Recession-Proofing Strategies: The article concludes with a reference to "Nine ways to recession-proof your life," signaling broader economic considerations and the impact of economic conditions on individuals.
In summary, the housing dynamics in San Diego, as discussed in the article, involve a complex interplay of median home prices, household incomes, market stability, and potential solutions for improving affordability. The insights provided by experts and real estate professionals contribute to a nuanced understanding of the challenges and opportunities in the San Diego housing market.
