Mark Zuckerberg, the co-founder of Facebook, has now surpassed Warren Buffet to the third wealthiest person in the world. Where is Mark Zuckerberg’s home? The San Francisco Bay Area! (Specifically Palo Alto). We will now rename Palo Alto as Zuckerburgh.
There are a large number of tech firms in the San Francisco Bay Area, including Google, Apple and Hewlett Packard. All these tech companies on a peninsula with tight land use controls makes for ultra-expensive housing. In fact, San Francisco median house prices rose by $205,000 YoY so far in 2008 according to Paragon Real Estate Group.
You know you have an affordable housing problem when the median condo price is around $1.25 million.
How affordable in the San Francisco Bay Area? Only 15% of households in San Francisco are able to afford a median priced house.
How does $8,330 per month in housing costs suit you in San Francisco? Santa Clara County, the home of numerous tech companies, is slightly less costly at “only” $7,110 per month.
How do HUD, Fannie Mae and Freddie Mac encourage “affordable” housing in the mega high cost area? The conforming loan limit for Santa Clara County is $679,650, so Fannie and Freddie aren’t buying too many loans from Zuckerburgh!
According to Redfin, there are not a plethora of sub-$1,000,000 houses for sale in Palo Alto (aka, Zuckerburgh).
Mark Zuckerberg could use some of his substantial wealth to lobby for removal of zoning and multifamily construction limitations if he REALLY wanted to help make housing more affordable. But that assumes that Zuck is not a member of the NIMBY (not in my back yard) crowd.
But at the national level, we see median new home sale prices pulling away from median household income.
Is this a housing bubble or a Michael Bublé?