How is median income so low and median house price so high?

[EscapeCalifornia]

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?

My wife and I make about $85k. We can barely afford the $550k house we bought two years ago that's probably worth over $600k today. Its nearly 40 years old and smaller than a Texan's guest house but its in a nice neighborhood with good schools. We have no kids, two paid-off cars, and very little other bills. Is still tough. Housing cost is the #1 reason we're looking to leave. Even given a 5% annual growth rate in our income, it would be about 12 years before my house price to income ratio came down to 4:1, a commonly quoted upper limit of how much house you can afford. I don't want to be 46 before I can afford both a house and kids. Condos really aren't much cheaper, especially once you factor in the often high monthly association dues and random special assessments.

[socketz]

Living in San Diego is a choice people make. Not only are salaries lower, but career opportunities are limited. So the people that live there are often ok with what they have and cherish the fact they get to enjoy some of the best weather on the globe; maybe this is what creates the laid back attitude.

Work to live, not vice versa.

For me, I did this for over a decade, banging my head against the wall in several careers, moving up the ladder then quickly hitting the ceiling. It was time for a change. Professional growth is still more important to some than the weather...at this point in life. However, I know I'll return in a few years. I may even rent. Rents are not that bad in San Diego (about the same as Dallas, but 3x the housing costs). I was an owner there a couple of times and it's not the panacea that many make it out to be. 3-4k mortgage payments really limit what you can do in life.

[Tool Shed]

People here tend to finance most every aspect of their lives. 100% financing, interest only loans, and teaser loans run rampant in this area. To learn more about the RE phenomenon in SD check out www.piggington.com

[andtm66]

This disparity has been the case for many, many years in SD. I'm not sure why, either ... or how people can afford to live there on what the salaries are. The first year I lived there (94/95), I made $8.00/hour ... I didn't own a car and basically walked to work and took the bus everywhere else. My studio only cost $400 a month at that point. Now it would easily be over $1000 ... if not converted to a condo for who knows how much! ... The place I worked at then still isn't paying much more than about $10-$12/hour now for the same type of position. I have been making about $16/hour doing the same thing in Portland.

I'm looking to move back to SD sometime this year and, again, the salaries are pathetic. They are significantly less than what I can find in Portland and the cost of housing is at least 3 times what it is in Portland.

I figure, though, that my quality of life is more important ... so I will find a way to make it on what I can get (salary-wise). But, I know that I will never be able to afford to buy anything is SD. I just have to accept that.

A good number of my SD friends bought their homes YEARS ago. They are VERY modest homes and quite small. They would like to move to something larger, but could never afford to do that. Their modest 1000-1200 sqft house is worth over $450,000 ... and I'm sure they paid less than $100,000 ... possibly even less than $50,000 ... but they still couldn't afford to get something bigger. So, most of them just do some remodeling and settle for staying where they are. Most people who don't make much either rent (like my friend and her daughter that share a SMALL 1-BR apt of about 400 sqft) ... or have owned their homes for many, many years.

I'm not sure what you could buy on $100,000 a year ... but it will be SMALL.

[socketz]

On 100k you could probably squeak into a 500k home if you could put about 20% down. It would be a 3kish mortgage, but you'd do ok.

100k is alot for San Diego though....most people I know there don't make this kind of money. It's a 60-80k town on the high end town.

It's been like this since I've lived there...salaries have never seemed to adjust over the years.

The jobs where you can make that kind of money (mostly sales related technical) require a little travel because San Diego is never a good sales territory by itself, you'll need to bring in the rest of the SW to build a customer base.

Nonetheless, it is a great place to live, you just have to be ok with limited career choices/paths. It's not a workaholic kind of town, so this suites most people there just fine.

[Pointer]

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???

Because everyone wants to live here, including tons of Illegal aliens who drive up rents. Im retired living on 1800 a month in a 700,000 house, Go figure