What to Know
- San Francisco and San Jose are the top two most expensive cities to live in California, followed by Los Angeles, San Diego and Long Beach.
- In some markets, people are forced to spend more than the government-recommended 30 percent of their monthly gross income on housing.
- Berkeley researchers report 48 percent of California's registered voters say the housing affordability issue is "extremely serious."
As high as home prices are in 2019, a new report suggests future prices are going to be staggering and Generation Z should begin saving now if they hope to afford a down payment.
“I remember when I bought my first house and I remember how actually easy it was,” real estate agent Frank Powell purchased a home in San Diego in 1997.
He was in his 30’s and was working as a lifeguard with the city of San Diego. He admits he wasn’t bringing home an impressive salary but he could still afford to purchase the home he wanted.
Today, Powell said, it’s a different ballgame for the generation that will reach adulthood in the 2020's.
For example, a La Mesa home with two bedrooms, a man cave, a Jacuzzi balcony and waterfall is on the market for about $700,000. That’s just above the median price for homes in San Diego.
A new report by Realtor.com suggests if a “Gen Z” teenager wants to eventually settle in San Diego and buy a home before the age of 30, he or she will have to start saving a lot and start saving now.
The report said if the teenager wants to put down a 10 percent payment on a median home in San Diego in 2031, they will need to start saving more than $860 a month.
Powell’s brother, Mark, also sells real estate. He said the salary needed to purchase a median-priced home in San Diego is well into the six figures.
“To purchase a median-priced home in San Diego, you have to make roughly $140,000 a year,” Mark Powell said. “Which is a lot.”
That figures a median price home that’s currently close to $600,000. In 12 years, Realtor.com estimates San Diego’s median home price will cost over a million dollars.
“Ten percent down of a million is $100,000,” Mark said. “You have to come up with $100,000."
The Powells’ advice for Gen Z is to start saving now and keep an eye on credit scores. They also suggest not losing hope.
“There are other places in the country where you could live for a lot less,” he said, adding, “But who would want to live anywhere else?”