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New College Grads Can't Afford to Live in SF—or Oakland

But things could be much worse. You could live in St. Louis. 

 

It’s graduation season. Congratulations on that newly-minted degree in engineering, business, or critical anti-(re)ification studies. Enjoy those last few days in school—because here’s some bad news. You can’t really afford to live here. 

The number crunchers at real estate site Trulia have, well, crunched the numbers on which major United States cities are most affordable for new college graduates. Unless you’ve been living entirely in the lab for the last four years, you know the answer: It isn’t San Francisco.

Trulia looked at the median income of new graduates and the median rents in the 25 top real estate markets in the United States. They then calculated a percent of those rentals that were affordable to the new grads, where affordable was defined as requiring 31% or less of monthly median income. Though San Francisco is very expensive to rent in—at a median of $3,500, it’s actually the most expensive market in the nation—we’re counterbalanced by the relatively high median salaries earned by new graduates. At a median of $41,244 per year, our new graduates make more than new graduates in any of the other cities studied.

So that means that the percent of rentals affordable to new grads in SF was 3.9%. That’s far behind the most affordable market, which was St. Louis at 18.6%, followed by Dallas at 14.9%, and Houston at 10.4%, but also far ahead of the least affordable markets, Portland, Oregon at 0.1%, Riverside and Orange County, tied at 0.2%.

Interestingly, Oakland’s affordability for new grads lagged even behind San Francisco. The East Bay city has just 0.8% of its rentals affordable to the group. Oakland is pretty expensive, at a median of $76,971, but more strikingly, its new graduates earn a much smaller median: Only $27,841 per year.

How do people make it work? By taking on roommates, of course. In SF, it takes 2.3 roommates to allow an average new grad to meet median rent. In Oakland, it’s only 1.7 roomies.

So the big takeaways: SF is a tough market for new grads, but the grads themselves are better off economically than you'd think. Oakland, on the other hard, is bad for new grads all the way around.  

 

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