Study: Peninsula Housing 'Severely Unaffordable'

Honolulu's housing market is more expensive than on mainland U.S., according to the 9th annual Demographia International Housing Survey. The Bay Area isn't far behind.

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 County 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 Peninsula is "severely unaffordable?" Tell us in the comments below.

Jennifer van der Kleut January 26, 2013 at 04:28 PM
Fixed, thanks for catching that!
John Foley January 26, 2013 at 06:16 PM
One of the reasons Redwood City is cheaper than surrounding areas is its well known poorly functioning schools and the continued vindictive authority at the district office.
Andrew Peceimer January 27, 2013 at 02:49 AM
Why would anyone be surprised? A majority of you vote for School Bonds, Fire services ( I mean their ability to retire at 50 years old with $100,000 per year pensions...police too and city administrators) and more parcel taxes every election. Ever check you property tax bill and notice all the extra charges on your bill? The Burlingame School Board recently spent roughly 100 million making Burlingame homes less affordable. Yea we have great schools but will the students ever be able to live in the city they grew up in?....doubt it.
lloyd huff February 21, 2013 at 05:51 PM
I grew up in Menlo Park and lived there from 1954 to 76. I can remember when you could buy a 4 bedroom 2 bath home on Sherman ave in West Menlo for $26,000.00 My household income is well into six figures but I could never afford to move back. I don't know how you can make a steep house payment and still have a life and raise a family. I now live in New York State and I paid $140,000.00 for my 5 bedroom 3 bath home on a tourment golf course 3500 sq ft. It would be a $3 million dollar home in the bay area. The Bay area market has been driven by greed and demand. If Silcon Valley decided to pick up and leave you would see the housing market plumet like a rock in the water!
Steve Hayes February 21, 2013 at 06:40 PM
Of course it might have more to do with bitter old people who spend all of their time trying to tear away at the school system - RWC has too many people like you and potential home buyers (with school children) are paying attention.


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