Here’s an interesting perspective for you.  A 20% down payment on a home in Silicon Valley could almost buy you an entire house most anywhere else (except the San Francisco metro area) in the country. Specifically, according to Zillow’s latest Group Report on Consumer Housing Trends, a 20% median down payment on a home in Silicon Valley comes to approximately $192,350.  Compare that number with the median nationwide value of $192,500. for an entire house.

The average buyer in the Silicon Valley metro area with a median yearly income of approximately $105,500 has to save almost two years worth of his/her salary or 182% of her/his annual income to come up with a 20% down payment for a home in Silicon Valley.  That’s because the median home value in the area is approximately $961,600. (The San Francisco metro area which includes San Mateo, Marin County, Alameda, Contra Costa County also comes down to a similar 180% annual income requirement to get to a 20% down payment.)

Compare these numbers to the numbers in the nation as a whole where a 20% down payment on a home averages approximately $40,000…or 2/3 of a person’s annual income.  Pittsburgh, Indianapolis and Kansas City are the three metro areas where only 48% of a person’s annual income is required for a 20% down payment on a home.

With these kinds of numbers, how do people, say two teachers, do it?  Short answer…they can’t…without help.  Zillow says that 25% of first time buyers anywhere in the country have to rely on gifts from family and/or friends in order to buy a house.  Zillow also says that saving for a down payment for a house anywhere in the country is the biggest worry 20% of all first time buyers have.

For Silicon Valley home buyers, “It’s becoming more and more difficult to buy a home, a first home, here now,” says Margaret Garber Teeter, an agent with Alain Pinel Realty in Walnut Creek, CA.  “Unless they’re earning top tier incomes, they’re getting help from somebody or something, whether that ‘help’ comes from inheritance, stock, money from some other piece of real estate.  Somehow, they’ve been given a lump sum of money.”  No ‘help,’ no Silicon Valley.


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