Housing affordability for teachers is in particularly dire straits in the Golden State, according to a new study by real estate brokerage Redfin. The study found that 83 percent of homes in California are unaffordable on a teacher's salary. Redfin analyzed average teacher salaries in markets in California and compared them with the median home price.
photo credit: woodleywonderworks via photopin cc
Only 17 percent of all homes for sale in the state are affordable to teachers. In some cities, the problem is even worse. In San Francisco, there isn't one house on the market that teachers can afford on their average salary, the study showed.
According to Redfin's data, the median list price in California is $485,000. The state's 300,000 elementary, middle, and high school teachers have an average annual salary of $69,300. Using a general guideline that a monthly home payment should not exceed 28 percent of your gross monthly income, Redfin says that a teacher would likely not want to pay more than about $1,600 a month for a home.
"Given current interest rates, property taxes, home insurance, and home owners association expenses, a teacher can afford a $260,000 single-family home or condo," Redfin says in its report. "Of the 50,559 for sale in California, just 17.4 percent are listed below $260,000."
Redfin says that tight housing inventories are causing home affordability to slip in California. Its report breaks down what teachers can afford by county.