FastCompany:
Engineers at five major SF-based tech companies would need to spend over the 28% threshold of their income to afford a monthly mortgage near their offices.
And:
Apple engineers would have to pay an average of 33% of their monthly income for a mortgage near work. That’s the highest percentage of the companies analyzed, and home prices in Cupertino continue to skyrocket.
This housing market is a chaotic bubble. But it continues to inflate, money continues to pour in.
I don’t know about housing prices in general in the US, but in Toronto, it seems pretty normal to pay 33% of your income towards your mortgage.
I pay more for mine. Which is like working to survive than living.
Is it a bubble? Or is supply insufficient to meet demand? That certainly is the case in SF itself. I wouldn’t be suprised if NIMBYism that makes it so in SF, is shared by other communities.
Then again, what does the sudy mean by “near”? A couple of miles? An hour’s commute away?
It could be that living a little further away and adding a communte would reduce housing costs.
The obvious question is, since Apple and Google can attract people to pretty much anywhere with their prestige-factor and pay…
Why are both of them still in The Valley?
It means “20 minute commute time”, per their description at the source.
Which is pretty reasonable for any context that isn’t The Bay/Silicon Valley, where somehow hour commutes are “normal”.
They aren’t exclusively. Google and FB both have significant engineering offices in Seattle (and probably elsewhere) and Apple is expanding here. The challenge is that they can’t really attract people anywhere – most A level talent wouldn’t move to, say, North Dakota.
What I don’t quite understand is the insistence on the primacy of central offices. Give someone a fast enough net connection and a secure VPN and a coder can work at home, an hour or more away from the offices and come in only part of the time.
Aside from Sigivald’s point, remember that the Bay Area expands north and south for the most part. You have the ocean on one side and the bay on the other. If you locate offices in the East Bay, you’re dealing with cross bay traffic which means the bridges. And they can’t really expand north of SF proper because that’s wine country and people won’t sell. They could expand up the SE part of the bay near Milpitas, but then any company with existing offices in the Mountain View area has to commute through San Jose to get between them.
Keep in mind that they’re talking about incomes in the $150k range and not particularly great homes. So people are paying 40-50k for what most would consider to be pretty modest, middle income style houses.
Indeed. It’s by no means a bubble if supply is low and demand high. The obvious solution is to build for high density rather than low. But… NIMBY NIMBY NIMBY. I can relate, I like where I live but wish they’d closed the doors after I moved in.
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My mom still lives in the house in South San Francisco that we moved to in 1968. When they bought the house, she and my dad were afraid they wouldn’t be able to cover the $160/month mortgage payment.
If you look at the article (and specifically employees who work at Apple), it says they are paying on average $1,163,750 for houses on an average salary of $188,000. The 33% figure refers to mortgage payments as a percent of monthly income. (That may be what you meant, but it looked from your comment as though you were saying they were buying houses for 50k.)
You are probably quite right though that the homes themselves are nothing special. Nonetheless, I wouldn’t complain about having a ~$10,000 monthly net income after paying for housing.
… Rather obviously, 40-50K PER YEAR. And go look at what $1m buys in that area.