The Bay Area housing market is pricey and rents here are steep. But how bad is it really?
One study says San Jose and San Francisco-Oakland rank fourth and fifth, respectively, in a list of the least affordable housing markets in the United States and in the top 12 among 337 markets in Australia, Canada, China (Hong Kong), Ireland, New Zealand, United Kingdom and the U.S.
The 9th annual Demographia International Housing Survey rates cities' housing markets on a range from "affordable" to "severely unaffordable."
San Jose and San Francisco also are among top five least affordable major metropolitan markets (those with a population of 1 million or more) in the countries studied. They are pricier than London and only more affordable than Hong Kong; Vancouver, BC; and Sydney, Australia.
The math is complicated.
The survey uses a methodology called the "median multiple." That means the median house price divided by gross before tax annual median household income to rate a country's housing affordability, the Sydney Morning Herald explained in this article that challenges Australia's poor showing in the study.
The Bay Area has seen its housing market rebound in recent months, with median home prices increasing and the number of homes sold on the upswing, according to figures released by DataQuick this month.Demographia Housing Market Affordablity Study City Median Multiplier Median Home Price Median Household Income Hong Kong 13.5 $3.81M $282,000 Vancouver, BC, Canada 9.5 $621,300 $65,200 Honolulu, HI 9.3 $627,200 $67,200 Boumemouth & Dorsett, UK 8.7 $215,500 $24,900 Port Macquarie, Australia
8.6 $387,200 $44,800 Sydney, Australia 8.3 $642,700 $77,400 Santa Cruz, CA 8.2 $523,300 $63,600 Sunshine Coast, Australia 8.0 $430,000 $53,900 Coff's Harbour, Australia 8.0 $383,600 $48,100 Santa Barbara, CA 7.9 $485,600 $61,500 San Jose, CA 7.9 $673,000 $85,400 San Francisco-Oakland, CA 7.8 $568,000 $73,200
Demographia pulled figures from Q3 of 2012.
The study is authored by Wendell Cox, a conservative who is opposed to urban growth boundaries.
Coldwell Banker’s annual Home Listing Report recently ranked 10 cities in San Mateo and Santa Clara counties as part of the top 20 most expensive markets in the country.
James Lee of Redwood City commented "Redwood City is somewhat cheaper than many other Peninsula cities and towns to live in, but for the average folks who actually live here, the rent is way too high."
Another commenter "Rex" was a little more neutral and stated, "Depends on how much you make. For some, yes, for many others, no."
Do you agree that the housing market on the Bay Area is "severely unaffordable?" Tell us in the comments below.