Home Affordability | November 2024
Silicon Valley home affordability
By Heidi Young
Over the past two decades, housing costs have surged significantly, contributing to a decline in housing affordability in Santa Clara and San Mateo counties. These high costs have exacerbated disparities in homeownership by race and ethnicity, with particularly dramatic impacts for first-time homebuyers. This downward trend in affordability is widespread throughout the Bay Area and California as communities struggle with the dynamics of a constrained housing market.
According to the California Association of Realtors (CAR) September 2024 market statistics, the median sale price for existing single-family homes was $1.9 million in Santa Clara County and $2.1 million in San Mateo County – more than double the median price statewide ($868,100) and more than four times the U.S. median home sale price ($416,700). CAR’s Affordable Inventory tool shows that in the two counties combined, only one out of 805 active listings is affordable for households with an annual income of $100,000. In conjunction with Silicon Valley’s rising median home sale price, the estimated share of first-time homebuyers able to afford a home has declined – down by 17 percentage points in Santa Clara County (to 25% in Q2 2024) and 10 percentage points in San Mateo County (to 23%) over the past decade. These numbers compare to 26% statewide and 51% throughout the United States.
Additionally, significant disparities exist in Housing Affordability by ethnicity in Santa Clara and San Mateo counties, with the share of Black (9% and 8%, respectively) and Hispanic/Latino (8% and 10%) households able to afford a median-priced single-family home well below the share of White, non-Hispanic (21% and 19%,) and Asian (25% and 20%) households. These disparities are also reflected in markets throughout California.
