The latest housing numbers out of Silicon Valley are absolutely vertigo-inducing. Especially when it comes to how much cash a buyer needs to make a down payment.
According to real estate site Zillow’s latest report, that down payment figure has reached more than $600,000 to buy a typical house in the valley, and that’s before local agents say they expect upcoming tech IPOs to send prices even higher.
The latest report from Zillow spells it out: The median San Jose home now costs $1.2 million. Given that the median household income is about $100,000, one would need a down payment of $614,000 to be able to afford the monthly mortgage on that median home.
“We enjoy living here; there’s certainly something to be said for being able to live in a nice place like this,” San Jose resident Ben Hochman said. “But how much of your pay do you wanna put into a home versus going on vacation or traveling?”
On the other hand, real estate experts say the South Bay is still seeing job growth, and people are still finding their way into seven-figure homes.
“I sold my home, and I’m gonna buy this one,” Holly Barr, of Sereno Group, said she’s hear buyers saying. “Or my parents sold their home, or I got an inheritance, or most likely, I get stock options.”
The city says it’s working on a solution. Kim Walesh, director of economic development, said San Jose has prioritized housing production, with a goal of 5,000 new homes per year, including affordable homes.
“We’re doing everything we can in San Jose, including tax and fee reductions, to make the housing market continue to produce housing for the next two, three to five years,” Walesh said.
Another issue the city is facing is rising construction costs, which make it extra tough in this market to build low-income housing.
This post was originally posted at http://www.nbcbayarea.com/news/local/Down-Payment-For-Median-San-Jose-Home-Now-More-Than-600K-Report-507490721.html.