SAN DIEGO (KGTV) - The cost of homeownership is San Diego is nothing new. But the sticker shock of the salary necessary to afford to live in America's Finest City is sure to leave residents speechless.
San Diego recently ranked second among cities requiring the highest salaries needed to afford a home, according to mortgage website HSH.com. Locally, residents need to earn $113,530.43 a year, based on the medium home price of $593,000.
The salary comes in at at least twice the amount of the report's national average of $51,962.53 a year.
San Francisco ranked first at $160,589.84 and Los Angeles placed third with $98,315.22, around San Diego. New York and Boston rounded out the top five metropolitan areas. The report is based on the country's 27 largest metros.
"We used standard 28-percent 'front-end' debt ratios and a 20-percent down payment subtracted from the NAR’s [National Association of Realtors] median-home-price data to arrive at our figures," the report stated. "We've incorporated available information on property taxes and homeowner’s insurance costs to more accurately reflect the income needed in a given market."
The study noted that if a homeowner puts down 10 percent instead of 20 percent, the required annual salary jumps from $113,530.43 to $137,056.40.
San Diego's ranking is also based on a monthly payment of $2,649.04.
"Irrespective of quarterly wobbles, thin levels of unsold inventory continue to press home prices higher. The [NAR] reported tightening supplies of unsold homes during the last three months of the year, with 4.6, 3.9 and 3.6 months of stock available to buy October, November, and December, respectively," the report said.
Check out HSH's map of some of the highest and lowest metros:
The cheapest metropolitan areas Cincinnati, Cleveland, and Pittsburgh, where a yearly salary of $32,373.50 is required to afford a home.
"The prospect of higher mortgage rates and more home shoppers in coming months should be enough of an incentive for those serious about buying to start their search now," NAR President William E. Brown, who is also a California realtor, said.