Living here swallows more of your money

Whether you own your home or rent, living in San Diego County is swallowing up more of your income, according to a study released Thursday by Zillow.

In San Diego County, a typical renter has to pay 42.6 percent of his or her income to afford a median-priced unit at $2,231 a month. Typically, it takes 33 percent of income.

It’s not much more affordable for a homeowner, who would have to spend 35.5 percent of his or her income to buy a house worth a median $467,700. Historically, measured from 1985 to 1999, it would cost someone earning the median income 32.9 percent of their money to buy a median priced home.

The figures earn San Diego County the distinction of the nation’s seventh least affordable housing market. In the last year, county home prices rose 9 percent, rents rose 3.9 percent, but incomes were only up about 2 percent, hurting affordability. Skylar Olsen, an economist at Zillow, said California was hit hard during the Great Recession, and that led to the patterns the Golden State is seeing today in its housing market.

“You’ve got a lot of people who would like to buy a home, they can’t, so they’re turning to rental markets. You’ve also got people who lost their homes, they are turning to the rental markets,” she said.

Each of the five least affordable housing markets were in California: Los Angeles, Santa Cruz, Santa Rosa, San Jose and San Francisco. Additionally, eight of the 12 least affordable are in The Golden State.

“We simply do not supply enough units to keep pace with the demand,” said Marney Cox, chief economist at the San Diego Association of Governments.

Zillow reports that affordability is worse for renters because unlike the for-sale housing market, rents didn’t experience a crash during the Great Recession. They just kept climbing, as demand increased among former owners, newcomers to the region, and those who didn’t have a down payment, Olsen said.

Olsen said housing prices increased because California has low supply and attracts investors. Across the nation, a median priced home of $174,900 would take 15.3 percent of a person’s income at the median $53,216, while renting a place for $1,318 would take 29.5 percent. Olsen said in more industrial and inland parts of the country, affordability has increased for home ownership, thanks largely to currently low interest rates and less investor activity.

In Los Angeles and Orange counties, where the median income is $59,424, a person needs 42.6 percent of that money to afford a median home at $529,200, and 47.9 percent to lease an apartment at the median $2,392 a month.

In New York and Northern New Jersey, a person earning the median $68,625 needs 25.8 percent of their income to afford a home priced at $374,700 (that’s about 6 percent more affordable than the historical average). That same person would need to spend 40.2 percent of his or her income to rent an apartment at $2,316 per month, up from the 23.6 percent historical average.