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Old 02-18-2014, 03:57 PM
 
Location: Oakland, CA
28,226 posts, read 36,889,363 times
Reputation: 28563

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Average home price is $682k, and you need an income of $115k to afford that. It also assumes a 20% downpayment. So you need to save up $126k (so 2 years of take-home pay).

How much income do you need to buy a home in the Bay Area? - Kathleen Pender – Net Worth Plus

Obviously, $115k is no where near enough money to afford that home.....
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Old 02-18-2014, 04:10 PM
 
Location: oakland / berkeley
507 posts, read 917,895 times
Reputation: 404
The article doesn't include tax and insurance in their calculations. Awesome.
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Old 02-18-2014, 05:03 PM
 
Location: Oakland, CA
28,226 posts, read 36,889,363 times
Reputation: 28563
Quote:
Originally Posted by wooliemonster View Post
The article doesn't include tax and insurance in their calculations. Awesome.
Hilarious right. So go ahead and increase that income by 75%.
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Old 02-18-2014, 07:19 PM
 
12,823 posts, read 24,409,113 times
Reputation: 11042
We are killing the goose that laid the golden egg. We can only go so far if upper middle class people cannot afford the CoL. The core middle class are already toast. It's getting to where non C-levels can only afford to live out in the middle of mod cut nowhere or in a bad hood. You can't run a company where there are only C-levels. There need to be worker bees. No worker bees, no company.

Last edited by Sam I Am; 02-20-2014 at 05:28 AM.. Reason: language filter
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Old 02-18-2014, 07:44 PM
 
Location: East Bay, San Francisco Bay Area
23,546 posts, read 24,049,201 times
Reputation: 23977
Sorry, Jade. Median is the mid-point of a statistical distribution and not "average", which is "mean". Keep in mind that some high priced homes (which we have here) can skew a median distribution upward much more than it can an "average" distribution.

Example: three homes that sold at the following prices:

#1 -$1.00
#2 - $500,000
#3 - $500,000

median is $500,000 (#2), while mean (average) is: $333,333 ($1,000,001 / 3)

I agree that homes have gotten way out of price for most, but the average (mean) in the Bay Area is probably around $400,000-$450,000.
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Old 02-18-2014, 11:21 PM
 
Location: Oakland, CA
28,226 posts, read 36,889,363 times
Reputation: 28563
Quote:
Originally Posted by ccm123 View Post
Sorry, Jade. Median is the mid-point of a statistical distribution and not "average", which is "mean". Keep in mind that some high priced homes (which we have here) can skew a median distribution upward much more than it can an "average" distribution.

Example: three homes that sold at the following prices:

#1 -$1.00
#2 - $500,000
#3 - $500,000

median is $500,000 (#2), while mean (average) is: $333,333 ($1,000,001 / 3)

I agree that homes have gotten way out of price for most, but the average (mean) in the Bay Area is probably around $400,000-$450,000.
I doubt it. Not many houses on the market under $500k. And even fewer of those are actually being sold to individual owners.
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Old 02-18-2014, 11:27 PM
 
Location: SF Bay Area
18,982 posts, read 32,668,735 times
Reputation: 13635
Quote:
Originally Posted by ccm123 View Post
Sorry, Jade. Median is the mid-point of a statistical distribution and not "average", which is "mean". Keep in mind that some high priced homes (which we have here) can skew a median distribution upward much more than it can an "average" distribution.

Example: three homes that sold at the following prices:

#1 -$1.00
#2 - $500,000
#3 - $500,000

median is $500,000 (#2), while mean (average) is: $333,333 ($1,000,001 / 3)

I agree that homes have gotten way out of price for most, but the average (mean) in the Bay Area is probably around $400,000-$450,000.
A mean value is going to be skewed a lot more by higher priced homes, an incomes as well, than a median will. Median is the most realistic way to look at typical home prices. I'm guessing in the Bay Area where there are a lot of million dollar+ home sales the average is definitely higher than the median.
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Old 02-18-2014, 11:45 PM
 
Location: SW King County, WA
6,416 posts, read 8,281,603 times
Reputation: 6595
Keep in mind that 400-500k won't buy you a home in a DESIRABLE Bay Area neighborhood too.
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Old 02-19-2014, 06:54 PM
 
1,021 posts, read 1,665,769 times
Reputation: 1821
The only reason prices of bay area home are up so much now is because the interest rates are still very low wait until the rates are in the 5.5% to 6.5% historic range.
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Old 02-19-2014, 08:36 PM
 
Location: oakland / berkeley
507 posts, read 917,895 times
Reputation: 404
mod cut median value is used precisely because it's more informative for distributions with long tails, such as income or real estate. After all, you don't normally see sales with negative values or people reporting negative incomes.

Last edited by Sam I Am; 02-20-2014 at 05:29 AM.. Reason: unnecessary
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