Bay Area Housing Trend

In San Francisco, the affordability index dropped to 10 percent in the second quarter from 12 percent in the first. Since 1991, the lowest it has been was 8 percent in late 2007. Its highest was 29 percent in the first quarter of 2012.

Affordability was a little better in other counties. In San Mateo, the index was 13 percent in the second quarter compared with 8 percent at its trough in 2007 and 33 percent at its peak in early 2012. In Marin, the index was 17 percent in the second quarter, compared with 10 percent at its worst and 32 percent at its best.

Affordability now stands at 18 percent in Alameda and Contra Costa counties and at 46 percent in Solano.

Carlisle said the index also understates affordability because it looks only at income. “Besides very large, recent increases in well-paid employment and population, much of the demand for Bay Area housing is being driven by increases in household wealth, which is different from householdincome,” he wrote in a recent report. “Wealth includes gains from a surging stock market and such things as stock options and IPO proceeds at high-tech companies, which have generated huge amounts of new wealth over the past 3 years.”

source: San Francisco Chronicle

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