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Teachers Can Afford More Homes in L.A. Than in Salt Lake City

Home prices aren't the only factor in an affordable place to live. Zillow analyzed median incomes and budgets for various occupations to learn where workers could find the most homes within their budget.

-- Teachers searching for a home in the Salt Lake City or Portland area would find fewer listings within their budgets than teachers searching in San Francisco, Boston, or Los Angeles.

-- Firefighters in the Riverside, Calif. metro can buy a $653,000 home if they make the median local firefighter income of $107,000 and spend the historical average of 26 percent of their pay on their mortgage.

-- Construction workers will find less than 10 percent of listings within their budget in Portland, Ore. but can afford almost two-thirds of the homes for sale in Buffalo, NY.

Oct 8, 2015

SEATTLE, Oct. 8, 2015 /PRNewswire/ -- Teachers budgeting the historical normi for housing will have an easier time finding a home in some parts of California than in Salt Lake City or Portland, Ore., according to new Zillow research.

Homes are cheaper in the middle of the country, but wages are lower, too, and people who live there are accustomed to putting a smaller percentage of their monthly income toward housing. That means the markets with the cheapest homes aren't necessarily the most affordable for every worker.

In Bakersfield, Calif., the median home value is $166,300ii, and the average annual teacher salary is $61,000 a yeariii. Since people in Bakersfield are accustomed to spending 22 percent of their income on a house payment, a Bakersfield teacher could afford a $310,000 home. In today's market, that includes about 86 percent of the homes on the marketiv – more than anywhere else in the country. 

Contrast that with a teacher in Salt Lake City, Utah, where teachers make $38,000 a year and people historically spend the same share -- 22 percent -- of their incomes on a mortgage payment. There, teachers could buy a $195,000 home – meaning only about a quarter of the homes on the Salt Lake City market would fall within their budget.

"There's a lot more to home buying affordability than just the cost of the home. Incomes vary a lot across the country – even within the same occupation," said Zillow Chief Economist Dr. Svenja Gudell. "There's also the question of how much of your paycheck you're willing to put toward a house payment, and finally, whether you can find a home in your price range. Many potential buyers are checking all the right boxes prior to buying a home – saving a healthy down payment, organizing finances and qualifying for a loan – only to find there are few homes available within their budget and close to their job."

Zillow's analysis of affordability by occupation found that lawyers and judges could affordably buy almost every home on the market in Buffalo and Syracuse, NY, but could afford only about 66 percent of the homes for sale in Stockton, Calif.

Firefighters, whose average salaries range wildly depending on geography, could afford a $583,000 home in Seattle – or a $167,000 home in Little Rock, Ark. Part of the reason for the big difference is that people in Little Rock have historically spent a smaller share of their income on their house payment.

In the notoriously expensive San Francisco metro area, food-service workersv could afford less than 10 percent of the homes on the market, even if they spend the market-norm of 37 percent of their income on the monthly payment. Teachers could afford about a third of the listings, while firefighters – who make almost as much as the average lawyer there – could afford three-quarters of the homes for sale in the area.

Teachersvi

Firefightersvii

Metro

Median
Income

Maximum
Home
Price

% of
Listings
in
Budget

Metro

Median
Income

Maximum
Home
Price

% of
Listings
in
Budget

Top 5

Top 5

Bakersfield, CA

$    61,000

$ 310,000

86.4%

Riverside, CA

$ 107,000

$ 653,000

90.9%

Modesto, CA

$    57,000

$ 335,000

84.2%

Cleveland, OH

$   68,000

$ 319,000

89.2%

Buffalo, NY

$    50,000

$ 229,000

79.7%

Sacramento, CA

$ 102,000

$ 715,000

89.2%

Stockton, CA

$    51,000

$ 332,000

79.5%

Toledo, OH

$   77,000

$ 296,000

88.7%

Riverside, CA

$    56,000

$ 339,000

76.3%

Indianapolis, IN

$   68,000

$ 375,000

88.1%

Bottom 5

Bottom 5

Provo, UT

$   32,000

$ 171,000

23.8%

Charlotte, NC

$  41,000

$ 180,000

44.1%

Salt Lake City, UT

$   38,000

$ 195,000

26.3%

Richmond, VA

$  54,000

$ 228,000

49.7%

Virginia Beach, VA

$   41,000

$ 177,000

26.7%

Augusta, GA

$  45,000

$ 148,000

51.0%

Portland, OR

$   40,000

$ 213,000

28.5%

Charleston, SC

$  56,000

$ 258,000

52.5%

Charleston, SC

$   37,000

$ 170,000

30.4%

Nashville, TN

$  45,000

$ 198,000

53.0%

Lawyers and Judgesviii

Construction Workersix

Metro

Median
Income

Maximum
Home
Price

% of
Listings
in
Budget

Metro

Median
Income

Maximum
Home
Price

% of
Listings
in
Budget

Top 5

Top 5

Buffalo, NY

$   89,000

$ 403,000

94.7%

Buffalo, NY

$  35,000

$ 159,000

63.2%

Syracuse, NY

$ 105,000

$ 436,000

94.5%

Toledo, OH

$  37,000

$ 142,000

61.4%

Dayton, OH

$   87,000

$ 351,000

93.8%

Akron, OH

$  35,000

$ 152,000

59.7%

Scranton, PA

$   98,000

$ 414,000

93.3%

Cleveland, OH

$  30,000

$ 141,000

56.7%

Grand Rapids, MI

$ 104,000

$ 405,000

93.3%

Las Vegas, NV

$  30,000

$ 176,000

54.7%

Bottom 5

Bottom 5

Springfield, MA

$   29,000

$ 165,000

36.8%

Portland, OR

$  27,000

$ 142,000

9.2%

Honolulu, HI

$   70,000

$ 601,000

63.4%

Colorado Springs, CO

$  20,000

$ 101,000

9.9%

Stockton, CA

$   37,000

$ 246,000

66.5%

Salt Lake City, UT

$  28,000

$ 145,000

10.9%

Charleston, SC

$   84,000

$ 385,000

66.5%

Houston, TX

$  24,000

$   84,000

12.0%

Worcester, MA

$   58,000

$ 306,000

66.9%

Virginia Beach, VA

$  30,000

$ 128,000

12.1%

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i The study assumed people would budget the percentage of their income that house payments typically cost between 1985 and 1999. It also assumed a 20 percent down payment.
ii The Zillow Home Value Index is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
iii Income data in this study is based on Zillow analysis of data from the U.S. Census Bureau's 2012 and 2013 American Community Surveys, and the 2012-2014 Annual Socio-economic Supplements to the Current Population Survey, made available by the University of Minnesota, IPUMS-USA.
iv This analysis used listings active on Zillow on Sept. 1, 2015.
v Food-service workers in the census dataset include food preparation and serving workers, including fast food, counter attendants, cafeteria, food concession and coffee shop workers, food servers, waiters and waitresses.
vi Teachers are defined in the census dataset as K-12 teachers, including preschool, technical education, and special education teachers.
vii Firefighters are defined in the census dataset as firefighters, fire inspectors and investigators, and forest fire inspectors and prevention specialists.
viii Lawyers and judges in the census dataset include administrative law judges, adjudicators, and hearing officers, arbitrators, mediators and conciliators, judges and magistrates, judicial law clerks and lawyers.
ix Construction workers are defined in the census dataset as boilermakers, brickmasons, carpenters, carpet installers, construction laborers, cement and concrete workers, drywall installers, electricians, floor layers, sanders and finishers, glaziers, insulation workers, operating engineers, painters, paperhangers, pavers, pile driver operators, pipelayers, plumbers, roofers, sheet metal workers, solar photovoltaic installers, stonemasons, structural iron and steel workers, tapers, terrazzo workers and finishers, and tile and marble setters.

 

SOURCE Zillow

For further information: Emily Heffter, Zillow, 206-757-2701 or press@zillow.com


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