Silicon Valley housing prices vs. salaries

It’s ridiculous how much housing costs have gone up around where I live. It doesn’t affect me personally, at least not in the normal sense of my own housing costs, although it influences who is moving in around me, and all the nearby construction. If has the value of my house right, it is now worth over eleven times what I paid for it in 1981. Yes, eleven times! Now I think Zillow may be on the high side. My own estimate would put it at “only” ten times. That’s still outlandish.

How does anyone afford to live here? Well, tech salaries have skyrocketed, too, but not everyone is a tech worker. Even Google and Apple have janitors and cafeteria workers. I couldn’t find any statistics for average salaries for this county or region over that period of time, but the U.S. government figures for average wages nationwide show only a threefold increase in average wage between 1981 and today. So housing costs have gone up ten times while wages have gone up three times. That would mean housing, as a percentage of income, has more than tripled for the average worker around here. Even if we assume wages and salaries have gone up more in this area than the nationwide average, it’s probably still true that housing costs, relative to salary, have at least doubled. For renters, the rule of thumb of spending no more than 30% of your salary on rent would have to change to 60% or more around here.

I started to write about the change in the neighborhood, the traffic and other problems from the economic boom around here, and a bunch of personal blather, but then thought better of it. If you’re thinking of moving here because of a good job offer, perhaps you only need to know two statistics: The average new home purchase price in my city is now over two million dollars. You can probably find an older fixer-upper for $1.8 mil. If you plan to rent, the average monthly rent here for a three- or four-bedroom house is about $9,000. Of course, you can live in an apartment or condo in a cheaper city and fight the commute to your new job at Google or wherever. Good luck with that. I recently read that many tech workers are now choosing to live in trailer parks as the only viable housing option. That salary they’re offering you isn’t as high as you think it is. Do me a favor and just stay away.