Housing affordability has been a growing issue across the country for years, with higher interest rates making already expensive homes even farther out of reach for many.
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According to ATTOM, a provider of property data, an annual salary of $75,000 is needed to be able to afford a typical home in more than half of nearly 600 US markets it analyzed for affordability. In its report released in June, it found that the most unaffordable counties to purchase a home were concentrated on the California coast and in Manhattan.
In New York County, an annual wage of more $383K is needed to afford a typical home. Areas surrounding San Francisco are close behind, where annual salaries of around $350K are needed to live in places like San Mateo, Santa Clara and Marin County. Across California, 35 cities in the state have an average price of over $1 million, according to SmartAsset. Palo Alto, the most expensive market in SmartAsset’s rankings, boasts average home prices of $3.2 million.
Often what these locales have in common are a combination of factors including low inventory coupled with high demand due to quality-of-life standards and strong job markets for skilled, well-paying jobs. For real estate agents in markets like these, it has become challenging serving clients of limited means.
“As a licensed real estate broker with 17 years of experience, I’ve witnessed the dream of homeownership fade into a distant dream for many aspiring buyers in the face of skyrocketing prices,” said Teddi Schill, founder of Raleigh Area Property Group in North Carolina.
“The consequences of this crisis are far-reaching, impacting not just individuals but entire communities,” Schill continued. “The lack of affordable housing contributes to economic inequality, social mobility barriers and disenfranchisement among those priced out of their neighborhoods.”
GOBankingRates reached out to real estate agents in some of the most out-of-reach markets to find out more.
Oak Bluffs, Massachusetts
Oak Bluffs is a town on the island of Martha’s Vineyard off the coast of Massachusetts and is accessible only by ferry or air. Grace Hagerty, principal broker/owner of Hagerty Real Estate, says that the island’s reputation as an exclusive destination attracts affluent buyers willing to pay a premium for luxury homes and waterfront properties.
With an average home value of $1.1 million, a recent snapshot of homes for sale in Oak Bluffs listed on Zillow bottomed out at $798K for a 700-square-foot cottage, to more than $11 million.
“Oak Bluffs, like all other towns on island, have strict zoning regulations and a commitment to preserving its historic charm. This results in limited opportunities for new housing developments and drives up prices on existing homes,” Hagerty said.
“Job opportunities on Martha’s Vineyard, including Oak Bluffs, are often seasonal and tied to the tourism industry. This makes it challenging for year-round residents to afford homes, as they face seasonal employment fluctuations,” Hagerty continued. “While there have been efforts to create affordable housing solutions on the island, the demand for such housing often exceeds the supply, making it difficult for many people to find affordable options.”
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San Francisco, California
Rory Donadio, CEO of Tribeca Capital Group LLC, works in the San Francisco area, where the median price of a home now exceeds $1.3 million.
“This escalation in prices has been driven by a combination of factors including limited housing supply, high demand due to the tech industry boom, and geographical limitations that prevent sprawling development,” Donadio said.
“The cost of living also ranks among the highest in the country, making it even more challenging for people to save for a down payment. This affordability crisis has led to a stark income inequality, with a widening gap between the tech affluent and the rest of the population. The high prices are pushing out middle and low-income residents, contributing to an increase in homelessness and an exodus to more affordable areas.”
San Diego, California
California’s southern gem has long been known for its unaffordability.
“Even by California standards, San Diego is notoriously unaffordable both in terms of home prices and cost of living,” said Peter Evering, business development manager at Utopia Property Management in San Diego. “There’s an inside joke here in our San Diego office that living is cheaper anywhere than here in San Diego. And it’s true.”
Typical San…
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