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Richard Rider

The U.S. LEAST affordable housing markets for middle class? #’s 1, 2, 3, 5, 6 & 7 all are in California

For most individuals, California’s expensive home prices are a far bigger problem than our highly progressive tax structure. For the really well-to-do who carry most of the CA income tax load, housing costs are a secondary problem.  But for the middle class, it can be a dream killer.

Below is a key excerpt from a current, informative article comparing the affordability of homes for the middle class in 100 national markets — recently summarized in a U-T article I can’t replicate here.  Not surprisingly, California ranks poorly.  We have the worst local market in the nation by far (San Francisco).  But we also have the 2nd (Orange County), 3rd (Los Angeles), 5th (my San Diego), 6th (San Jose), and 7th (Ventura County) worst housing markets.


What makes theses homes so expensive is the subject of another post.  But suffice it to say that intense government opposition to housing (reflected in VERY limited available land), massive housing “fees” and environmental regulatory and litigation madness make California housing anything but a free market.


What makes this housing survey particularly germane is that it takes into consideration just how much income constitutes the “middle class” within a local market.  California’s middle class is better paid than most other states, but our sky-high housing prices MORE than offset this advantage.


Two other disturbing aspects of this study worth noting:

1.  The average home square footage of a California affordable home in these terrible markets is from 1,000 to 1,200 sq. ft.  My San Diego market  average is 1,056 sq. ft.  Such modest CA homes are significantly smaller than the “middle class affordable” square footage in other markets.  And not included is the amount of LAND one acquires with the home, but almost surely CA lots are much smaller.

2.  In the past 12 months, there has been a dramatic drop in the number of homes for sale that meet the middle class affordable home classification.  More than likely this has to do with the housing recovery, coupled with higher mortgage interest rates.  Check out the chart below.  San Francisco dropped from 24% to only 14%.  San Diego dropped dramatically from 46% to 28%. These percentages dropped in almost all the markets this past year, but the drop is far steeper in the CA markets.

Note that the chart below includes a link to the full 100 markets in either Excel or PDF format.  Knock yourselves out!


Where Can the Middle Class Afford to Buy a Home?

. . .


The least affordable housing market in the U.S. is San Francisco. Even though the median household income is 60% higher in San Francisco than in Akron – which means San Franciscans can afford more expensive homes – the median price per square foot in San Francisco is close to seven times higher than in Akron. As a result, just 14% of the homes for sale in San Francisco are within reach of its relatively well-paid middle class.

Least Affordable Housing Markets for the Middle Class

# U.S. Metro

% of for-sale homes affordable for middle class, October 2013

Median size of affordable for-sale homes, October 2013 (square feet)

% of for-sale homes affordable for middle class, October 2012

1 San Francisco, CA




2 Orange County, CA




3 Los Angeles, CA




4 New York, NY-NJ




5 San Diego, CA




6 San Jose, CA




7 Ventura County, CA




8 Fairfield County, CT




9 Honolulu, HI




10 Boston, MA




Find out how affordable each of the 100 largest metros are for the Middle Class: Excel and PDF