Even though the average San Francisco-area resident earns a six-figure salary, median home prices are so expensive that only a small percentage can afford to buy a home there. That makes San Fran the least affordable major housing market in the nation, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index.
Blame part of it on tech riches. All of those IPOs (Twitter, Facebook) have generated a lot of wealth for company insiders and these tech millionaires are bidding up the prices on the most coveted single-family homes.
Yet, something else is at play. Strict underwriting standards are making it tougher for first-time and low-income buyers to get a mortgage, said NAHB's chief economist David Crowe.
That means fewer starter homes are being sold compared to the larger, more pricey ones, pushing overall median home prices higher, he said.