2022 minimum wage and home prices. (Sacramento: for rent, how much, homes)

[49erfan916]

Very quick question for you economists. When the min. wage rises to $15 per hour in 2022, what do you think would happen to price of homes in California, specifically Sacramento? Do you think it's going to sky rocket, rise slowly over time, or would we see a recession? I'm thinking that if the min. wage goes up, rent prices goes up. If rent prices goes up, then home prices usually goes up. If the interest rates continue to be this low OR gets even lower, a family of two earners would have at least have an income of 60k. And with more money a buyer has, the demand for homes would go up, am i right?

I'm just worried about my property taxes. I don't want them to skyrocket to the moon if that happens.

[nightlysparrow]

Originally Posted by 49erfan916

I'm just worried about my property taxes. I don't want them to skyrocket to the moon if that happens.

You do understand how Prop 13 works, right?

[Majin]

Home prices and rent prices are already way past what even a $15 minimum wage can pay for. It will have no effect.

[dspurs]

A question with MANY possible answers...on one hand, if workers are earning more income, in theory, demand for homes should increase, but that is likely a very simplistic view. If the cost of production is rising, it's likely the buying power of a dollar is decreasing. We could see a decrease in the demand for home ownership and a rise in the demand for renting as the cost of owning increases (not just mortgage, but all the associated costs of owning a home - repairs/services, taxes, etc). As Majin stated, home prices (ownership) in this area are typically already beyond the affordability of $15/hour. Even with a two income household, a buyer would likely be limited in which areas they may be able to afford to purchase with 60k income.


It will be interesting to see how much new construction is built during the next six years. As you'll see on these forms, many bay area people are turning inland for more affordable housing. If prices do continue to rise, we may see an increase in demand her in Sac, which would drive our pricing up as well.

[Ultrarunner]

Originally Posted by Majin

Home prices and rent prices are already way past what even a $15 minimum wage can pay for. It will have no effect.

One of our posters said a household with two incomes would need $30 and hour or about 120k combined... to realize expectations in much of California...