MOUNTAIN VIEW, Calif. (KTVU) - A new report from Open Listings highlights how even high-paid tech workers in Silicon Valley are finding it challenging to buy a home and some home buyers are having to change their strategy.
Shankar Iyer works as an IT engineer in Sunnyvale.
The 38-year-old husband and father agrees with a recent report that found while the median salary for software engineers in the Bay Area is $210,000, many of them are unable to afford homes in major tech hubs.
"That's actually a fact. The overall cost of living itself is high. Even if you're well into the six figures and multiple incomes in the family it still is challenging," said Iyer.
He has been looking to buy a home in Milpitas for a year now while prices continued rising.
"A year back when we were looking for say a three-bedroom house with maybe a backyard or something like that. That's now become a pipe dream! Now we're looking for a townhome with maybe no backyard," said Iyer.
Realtors say in San Jose, the median home sale price was $1,060,000 in January, Cupertino was $2,485,000 and Mountain View was $2,400,000 which is up 51% compared to the same time last year.
"In order to purchase a median price home in Mountain View where it's $2.4 million, the annual income needs to exceed $340,000," said realtor Jeff Bell. "And that's not including any consumer debt, car loans, credit cards, etc."
Bell is one of the listing agents on a 1850-square foot home on Springer Road in Mountain View, less than four miles from the Google headquarters.
The house went on the market for $2,198,000 last week and Bell said the open house over the weekend was busy with a lot of prospective buyers wearing clothes with the Google logo.
"We had nearly 80 groups or sets of potential buyers come through each day. All of them were from high-tech and every one of them seemed to be well-qualified, pre-approved, ready to go," said Bell.
Jackie Davison works for the City of Sunnyvale where she grew up, but says she can't afford to live there so she lives in San Jose.
She says a close friend is planning to move out of the area because she can no longer afford the area.
"She makes over $100,000 a year and she's leaving because she cannot afford the rent around here. A 2-bedroom apartment was $3,700. A studio was $2000," said Davison.
Back in Mountain View, Bell says inventory is very low with only six single-family homes on the market.
He says if you break down the cost for the $2.4-million median priced home, the down payment is $480,000.
He calculated with a 30-year mortgage at 4.25% interest rate and adding property taxes and insurance, the cost would be over $12,000 a month.