Real Estate Prices in the Bay Area
It is said that the home prices in the Bay Area or Silicon Valley in particular are so out of reach for many families of middle income group. You may be a highly paid engineer of a giant technology company and yet you can barely afford a house in this area. A real estate startup open listings has revealed a study about this observation.
Owning a Silicon Valley home is said to be affordable by these so-called techies employees, more than those workers as teachers, service industry workers and other scores of workers. But lately, there is now a signal of the area’s explosive housing costs that home ownership is not that easily obtainable by these techies or high salaried engineers.
According to a study, the software engineers of big tech companies in the Bay Area, would have to shell out over more than 28 percent of their salaries monthly in order to pay a house that is within 20 minute commuting distance from the place where they work. For example, 33 percent of the $188,000 salary per year of an average software engineer at a high tech company will have to spend this amount just so he or she can afford a home which is a median priced one in the area of Cupertino. Further, around 32 percent or 30 or 29 percent are allotted in their income for mortgage and tax payments by these software engineers in other high tech companies.
But still, these people who are allotting those mentioned percentages of their income for the mortgage payments are still having a hard time in getting a loan for a house. And if they do are granted of the loan, the amount is not the full price, which would need them to save up more for their down payments. Saving up a standard 20 percent reserve for the down payment is still not enough especially for residents there who are already paying the high cost of rentals.
If this is difficult to have a home ownership in the area even for high tech workers, these local tech companies will have difficulty in recruiting and retaining employees then.
This concern is already acknowledged by these Bay Area tech companies, and so their executives supported a bill to make it easier to build near transit stations housing projects.
According to the leaders of these tech companies, this housing problem is a detriment to their ability to hire employees and of the growth of their firms. The leaders expressed to be part of the solution since they recognized the fact that the shortage in housing could lead to displacement, crushing burdens on rent, long commute to work and harm to the environment.
Reference: original site