These CA Cities Have Tripled Their Home Prices Since 2000: Report
CALIFORNIA — The median-priced California home crossed the $120,000 mark for the first time in 1985, a year in which most baby boomers were in their 30s. As their children reached that same milestone in 2022, homeownership for many simply isn't within reach.
Home prices have seen a considerable rise nationally over the last two decades, according to new research from Anytime Estimate. In California, prices shot up 277 percent since 2000, the largest increase in the U.S.
"Today, millennials' dollars don't stretch nearly as far," researchers said in a new report.
"To be able to qualify for any of these houses anywhere in the Bay Area, you have to have an average annual income of $235,000," said Tim Yee, a real estate broker and president of RE/MAX Gold Bay Area. "It’s crazy, and for first-time homebuyers, it’s extraordinarily hard unless they have very wealthy parents."
But increases in annual income have barely kept up with inflation over the last few decades.
Since 2021, the inflation rate jumped 7.5 percent, and Golden Staters are feeling the effects on everything from gas to groceries. But last year, home prices rose 20 percent, outpacing the inflation rate.
In the Bay Area in general, households earning $80,000 to $165,000 a year qualified as “middle income” earners, the San Francisco Chronicle reported.
In 1985, 37 percent of California's families could afford to buy a median-priced home, the Los Angeles Times reported then. But from 2016 to 2020, California's median household income was only $78,672, according to the U.S. Census Bureau.
Home prices rapidly increased across the nation over the last five decades. Inflation is partly to blame, but rising home costs have outpaced the inflation rate by 150 percent since 1970, according to Anytime Estimate.
So why is California seeing such steep price hikes?
Over the past year and a half, the Golden State's housing market has exploded with demand in part because of record-low interest rates on mortgage loans, Oscar Wei, deputy chief cconomist of the California Association of Realtors, previously told Patch.
"Way back in 2005, 2006, that's when the housing market was really hot, too. ... At that time, the interest rate was around 6 percent," Wei said. "It really motivated a lot of buyers in the last year and a half to actually jump into the market."
The COVID-19 pandemic also spurred a massive demand from those working from home to find houses with home offices and in less population-dense areas and suburbs, according to Anytime Estimate.
The result: Millennials in their 30s face a 31 percent higher home-price-to-income ratio than did boomers at the same age, according to Anytime Estimate.
"The American Dream has always been expensive, but with an acceleration in house prices and disproportionate increases in annual income over the past few decades, millennials face a much bigger problem than boomers did at their age," researchers said in the report.
Researchers identified 13 U.S. cities where home values have gone up by more than 200 percent. The following California cities made that list.
San Francisco (290 percent increase).
Los Angeles (280 percent increase).
Riverside (278 percent increase).
San Diego (275 percent increase).
San Jose (261 percent increase).
Sacramento (237 percent increase).
See the full list and read the report here.
This article originally appeared on the Across California Patch
