Joint Venture Silicon Valley: Housing affordability has become ‘significantly worse’ in Santa Clara, San Mateo counties

by Embarcadero Media staff
November 14, 2024 12:39 am
https://www.paloaltoonline.com/housing/2024/11/14/only-1-out-of-every-805-homes-for-sale-is-affordable-for-silicon-valleys-middle-class-study-shows/

An aerial view of Silicon Valley. Photo courtesy Getty Images.

Silicon Valley housing at a glance

• The median price for single-family homes in both Santa Clara and San Mateo counties is more than double the state’s median home price of $868,100 and more than 4x the U.S. median home price of $416,700.

• In the two counties combined, only one out of 805 active listings is affordable for households with an annual income of $100,000.

• Only a quarter of first-time homebuyers in Silicon Valley is able to afford a home, while more than half (51%) can afford one nationwide.

• The sales of single-family homes priced under $1 million have accounted for only 1% of all transactions statewide each year since 2021.

• Less than 10% of Black and Hispanic/Latino housholds can afford a median-priced home in Santa Clara/San Mateo counties, while 19% to 25% of  white/non-Hispanic and Asian households can afford one.

Housing affordability has become significantly worse in Santa Clara and San Mateo counties – so much so, that only one out of every 805 homes listed for sale is affordable for households with an annual income of $100,000, according to a new report from regional think tank Joint Venture Silicon Valley.
Over the past two decades, housing costs have surged significantly, contributing to a decline in housing affordability in the region. These high costs have exacerbated disparities in homeownership by race and ethnicity, with particularly dramatic impacts for first-time homebuyers, the Home Affordability report states.

The report concludes that the downward trend in affordability “is widespread throughout the Bay Area and California as communities struggle with the dynamics of a constrained housing market.”

Home prices 4x higher than national market

The median price for single-family homes in both Santa Clara and San Mateo counties is more than double the state’s median home price of $868,100 and more than four times the U.S. median home sale of $416,700, the report highlights.
According to the California Association of Realtors September 2024 market statistics, the median sale price for a home in Santa Clara County was $1.9 million and $2.1 million in San Mateo County.

Buyers in the greater Bay Area need a minimum qualifying income of $214,800 annually to afford a median home, according to the association’s statistics. In San Mateo and Santa Clara counties, the qualifying annual income is above $500,000. The median household income in Silicon Valley, according to Joint Venture’s Silicon Valley Index, is $149,600.

First-time homebuyers getting priced out

In conjunction with Silicon Valley’s rising median home sale price, the estimated share of first-time homebuyers able to afford a home has declined, the report states. In Santa Clara County, only 25% of first-time buyers can afford a home, a decline of 17 percentage points since 2014. In San Mateo County, only 23% can afford a home, a decline of 10 percentage points.

In comparison, 26% of first-time homebuyers can afford a home statewide, and 51% can afford one nationwide, according to the report.

Disparities exist by ethnicity

Additionally, significant disparities exist in housing affordability by ethnicity in Santa Clara and San Mateo counties. Only 9% of Black households are able to afford a median-priced home in Santa Clara County,while 8% can afford one in San Mateo County. Only 8% of Hispanic/Latino households (8% and 10%) households are able to afford a home in Santa Clara County, while 10% can afford one in San Mateo County. These numbers are well below the share of White, non-Hispanic households that can afford a home (21% in Santa Clara County and 19% in San Mateo County) and Asian (25% and 20%) households.

These disparities are also reflected in markets throughout California, the report concludes.
This report was first published on SiliconValleyIndicators.org. Read the original report by Heidi Young here.