California homeowners are feeling the squeeze like never before, with a new ranking revealing that a staggering nine of America's 10 priciest cities to own a home are in the Golden State. The West Coast state is famed for its postcard-perfect views and year-round sunshine, but those perks come with sky-high taxes and eye-popping costs. In fact, the Gavin Newsom-run state is so expensive that it tops the list of the most expensive states to own a home in.
San Jose Leads the Pack
Within California, San Jose leads the pack, with the average income needed to own a home being $501,012, according to a study by Consumer Affairs. This is followed by San Francisco at $358,090 and Santa Cruz at $354,973. The only non-California city on the list is Honolulu, Hawaii, with a necessary income of $255,280 needed to be able to comfortably call it home.
Methodology
Consumer Affairs analyzed Zillow cost data and used the parameters of a homeowner not spending more than 28 percent of their monthly income on housing costs to determine the yearly salary needed to afford a home in a metro area. On average, American households must earn $121,000 to afford a typical home with a $10,000 down payment, which is 48 percent higher than the median average household income in the nation.
The Top 10 Most Expensive Cities
1. San Jose
San Jose tops the list as the most expensive US city to own a home in. The city's average household income sits at a whopping $164,801, which is three times lower than the amount needed to be able to comfortably afford a home in the city at $501,012. San Jose is located between San Francisco and Santa Cruz, both of which are high up on the list, and is home to nearly one million people. The average monthly cost sits at a whopping $11,690 a month. The average home price in the city is around $1.5 million, Consumer Affairs found.
2. San Francisco
San Francisco boasts the picturesque Golden Gate Bridge, stunning coastal views and historic cable cars - but it will cost a pretty penny to live there. The city comes in second place, with an average monthly bill coming in at $8,355, Consumer Affairs found. Homeowners would have to make $358,090 per year to afford to live there. The average household income in the tech-heavy area is $135,590 – roughly 2.5 times lower than the needed income to purchase a home. Meanwhile, the average sale price of a home in the area is $1.1 million.
3. Santa Cruz
In order to buy a home with the parameters Consumer Affairs set, a Santa Cruz resident would need to earn an average household income of $354,973 a year to be able to afford it. That hefty sum amounts to a monthly payment of $8,283. The average home is sold for around $1.1 million in Santa Cruz, which has a median household income of $107,893. Santa Cruz is home to the famous Monterey Bay and is known for being a laid-back beach community.
4. Santa Maria
Santa Maria is home to a thriving wine country with stunning vistas complete with vineyards, mountains and beaches. In order to soak up the gorgeous environment and live amongst its ranks, homeowners would need to make at least $305,535 a year to comfortably live in the city. The monthly payment would be $7,129, according to Consumer Affairs. The average home price sells for just over $1 million, while the average household income is $95,637.
5. Los Angeles
Home of Hollywood, ritzy Bel-Air, and a slew of A-listers, Los Angeles makes for a great place to live for the fame-hungry and those wanting plenty of options on their doorstep. However, to live there costs a pretty penny, with a homeowner needing to make a household income of $301,221 to buy a home, Consumer Affairs found. The average household income in LA is $96,405, while the average home sells for nearly $950,000. In order to comfortably afford a home there, homeowners would expect to pay $7,029 a month for it, the research company said.
6. San Diego
With 25 miles of coastline, San Diego is the go-to place for those looking to stick their toes in the sand. However, like much of California's metro areas, it's not the most wallet-friendly place to do so. Consumer Affairs estimated a household would have to earn at least $293,618 a year to live comfortably in the beach haven, with an estimated $6,851 monthly payment. The average home sells for $880,229, while the average household income is $109,132.
7. San Luis Obispo
San Luis Obispo is located between Santa Barbara and Santa Cruz. The coastal city has a state park along the water and is home to the California Polytechnic State University. To afford a home there, homeowners would have to make $280,591, Consumer Affairs estimated. The monthly payment for the home would come in at an estimated $6,547. The average home sells for $974,518, while the average household income is $100,724.
8. Oxnard
Oxnard is known as the Strawberry Capital of California, as it produces roughly one-third of the Golden State's supply. It's located in Ventura County and has plenty of white sand beaches, making it a beautiful place to live, but in order to buy a home there, homeowners would need to make $276,805, Consumer Affairs estimated. This would make the monthly payment around $6,500. The average home sells for $854,787, while the average household income is $114,238.
9. Salinas
The Salinas Valley is known as the Salad Bowl of the World due to its vast agricultural industry. It is also the home of writer John Steinbeck, where his childhood home remains today. But in order to be hypothetical neighbors with the Nobel Prize winner, homeowners would have to make $262,403 yearly and expect to pay $6,123 a month for their home. The average home sells for $845,535, while the average income is $93,290.
10. Honolulu
The only place not in California on the list is urban Honolulu, where homeowners will have to make $255,280 per year to afford a home. The Hawaii island sees homes sell for an average price of $673,151, which would bring monthly payments to $5,957. However, the average household income on the gorgeous island is $105,205, according to Consumer Affairs.
