How is median income so low and median house price so high? (San Diego: apartment, to rent)

[Lorax]

I don't understand something about San Diego. I have read that the median household income is $42,000 per year. But the median house price is $400,000, and it seems like to rent a decent apartment with at least two bedrooms it would cost about $1,500 a month in rent.

How do people afford to live there only making $42,000 (maybe $84,000 with two incomes) a year?? Does the majority of the population live in poverty???

[tande1n5]

I'd say that, unfortunately, yes, a good amount of San Diegans are house-poor, living off of payments that they can barely afford to make.

[Sassberto]

Median income buyers don't buy median priced houses. Median income is not necessarily relevant to the price of a home. This is true in all the major coastal cities.

[shannon94]

Originally Posted by Lorax

I don't understand something about San Diego. I have read that the median household income is $42,000 per year. But the median house price is $400,000, and it seems like to rent a decent apartment with at least two bedrooms it would cost about $1,500 a month in rent.

How do people afford to live there only making $42,000 (maybe $84,000 with two incomes) a year?? Does the majority of the population live in poverty???

Alot of people took out loans they really couldn't afford.... and now that the equity is drying up..they're loading up their credit cards!! Looks can be deceiving.

[vfrpilot]

I don't understand something about San Diego. I have read that the median household income is $42,000 per year. But the median house price is $400,000

That stat is a little misleading. A lot of homeowners could not afford to buy their own house back. We were in that category when we lived there. We had bought a few years back and the value of our house far exceeded any kind of 'reasonable' loan I would've been able to qualify for. I would like to see the median income of just home-buyers. I'll bet that it's higher than 42k.

[newportbeachsmostwanted]

Why? because people are willing to go out on a limb in order to live here.

That's usually something that most people, in other locations, can't comprehend.

[nevercoldcall]

Let's not forget that many small business owners, myself included, have a very low reported income. We own corporations that make a lot of money but we withdraw low salaries in order to keep our personal taxes down. That really skews the median income down, especially in places with lots of business owners like Newport Beach where I now live.

[shannon94]

Originally Posted by newportbeachsmostwanted

Why? because people are willing to go out on a limb in order to live here.

That's usually something that most people, in other locations, can't comprehend.

I'm from SD and I still can't "comprehend" it. lol

[Lorax]

Let me ask this, then. Is it possible for two people (no kids) with a combined income of around $100,000 to purchase a modest house in a nice neighborhood and live comfortably within their means? I mean, still have money left over for car payments, utilities, food and the occasional vacation?

[Sassberto]

Originally Posted by Lorax

Let me ask this, then. Is it possible for two people (no kids) with a combined income of around $100,000 to purchase a modest house in a nice neighborhood and live comfortably within their means? I mean, still have money left over for car payments, utilities, food and the occasional vacation?

In a nice neighborhood (and even some funky ones), you'll be looking at a condo.