Espresso, cell phones, brand new tattoos, and the price of a home

In past articles, I’ve illustrated how the cost of housing in California—particularly the San Francisco Bay Area where I live—is beyond out of control. As a homeowner and a guy who manages his own rental properties, I’m especially knowledgeable on the subject and totally understand why so many vehicles with California license plates are pulling into driveways in Texas and other more user-friendly states.

Now a new data point from the California Association of Realtors reveals that the income needed to buy a median-priced single-family home in the 9-counties that make up the Bay Area has nearly doubled in just the last five years! Back in 2012, a minimum annual income of $90,000 was needed to purchase a Bay Area home at the median price of $448,000. Now, based on numbers from the second-quarter of 2017, a homebuyer needs to be bringing in nearly $180,000 to afford a median-priced house because the price has skyrocketed to $895,000!

These figures assume a 20 percent down payment on a 4.09 percent, 30-year fixed loan, and include property taxes and insurance. And what do you get for this kind of money? On average, an older 3-bedroom, 2-bath home under 1900 square feet, on a 50 by 100-foot lot.

In certain Bay Area locations, it’s much worse. In San Francisco County a media home sells for $1.5 million. The next county south, San Mateo, is identically priced. Hippy-dippy Marin County (on the north side of the Golden Gate Bridge) checks in at $1.3 million, and in Santa Clara County (think Google, Apple, Facebook, and the City of San Jose) the median is $1.2 million; slightly lower because of more supply.

So, who’s buying or owning homes in the Bay Area?  According to the report, only 12 percent of buyers in San Francisco can afford a median-priced single-family home. In Santa Clara it’s 17 percent. In the fringe counties of the Bay Area up to 40 percent can afford to purchase a home, but the trade off is an aggravating commute to work and back.

Research also shows that only 13 percent of millennials own a home. This implies that most homeowners have owned their places for quite a while. Those who have owned for nine years or longer are likely sitting on an incredible amount of equity.

Now get ready for the insane liberal solution: guilt the baby boomers into renting their spare bedrooms to millennials. I’m not kidding. A real-estate website, Trulia, crunched U.S. Census data to calculate the number of vacant bedrooms in households headed by people born no later than 1964 (the last year of the baby boomer generation). By identifying the total number of bedrooms, then subtracting the number of inhabitants and one additional bedroom to account for alternate uses such as a home office, Trulia says there are 3.6 million bedrooms vacant in the 100 largest US metro areas. The cure is obvious: rent the rooms to millennials.

Problem is Trulia forgets the fact that we boomers have a social life and like to use those vacant bedrooms for visiting family and friends—not for millennial renters.

Maybe this is a better solution: create a millennial edition of Monopoly where players take Uber rides around the board, eternally pay rent, and never have money to buy anything except pricey espresso drinks, the latest cell phone, and a brand-new tattoo.

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