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SF Is the Third Least Affordable Major City in the Entire World
Scott Lucas | Photo: Courtesy Wikimedia Commons | January 21, 2014
You thought you had it bad before. You won't believe how bad you have it.
It feels like it's gotten so bad that the only people who can afford to buy mansions here are Danielle Steel and Mark Zuckerberg. Now we have the data to back it up. A worldwide study of 360 urban areas in nine countries found that San Francisco was the third most expensive major market to buy property. Not third in California. Not third in the country. Third in the entire world. Well, it's good to be on the top, we suppose, but this isn't a competition that anyone wants to win.
That's according to the Demographia International Housing Affordability Survey, which found that the only major cities in which it was more expensive to buy property were Hong Kong, at number one, and Vancouver, at number two. The researchers used a metric called a median multiple, which compares the average home price to the median yearly income for an urban region. By that measure, Hong Kong's average home price was 14.9 times its median income. Vancouver clocked in at 10.3, and San Francisco had a whopping 9.2. That's up sharply from 7.8 last year. What was number five? San Jose.
Perhaps worse, eleven of the nation's most unaffordable cities are in California, leading the report to conclude that, "there are indications of a substantial worsening housing affordability situation in California, which was the core of the U.S. housing bust of the last decade that precipitated the Great Financial Crisis."
There's plenty of ammunition for both sides of the debate here in the city as to what has caused the un-affordability. The report notes that SF has among the world's most restrictive land use policies, but it also notes that "the extraordinary returns arising from the rigged markets of urban containment have, understandably, attracted additional investors (pejoratively called "speculators")"—including here in San Francisco.
The most affordable major market cities to buy property in the US? Pittsburgh (which was also number one in the world), Detroit, and Grand Rapids. If you're looking to move outside the US, your best major market bet is the Osaka-Kobe-Kyoto region of Japan. Tell them hello from San Francisco when you get there.