A research firm says home prices continue to outpace wage growth in the Sacramento region. RealtyTrac's second-quarter data show home prices in Sacramento County are up nine percent year over year, while wage growth is up only five percent.
"And if we look at that back over the past four years since home prices bottomed out in the first-quarter of 2012, home prices in Sacramento County are up a whopping 95 percent, they've almost doubled," says RealtyTrac's Daren Blomquist.
He says the least affordable county in the region is El Dorado County "where, if you're making the average wage there, you'd have to spend 67 percent of your wages to buy a median priced home," says Blomquist. "Sacramento County is actually still the most affordable, average wage earners would need to spend 39 percent of their income."
Real estate agents say one reason local home prices are going up is because retirees from the Bay Area are cashing out of their high-priced homes and coming to Sacramento.
"They call them the Bay Area refugees," says Blomquist. He points out those retirees are not dependent on Sacramento wages.
"So they're able to put in a higher offer than someone in Sacramento could who lives and works there and could put in on a home," says Blomquist. "And that is also driving up home prices."
The data also show it's getting harder for the average wage earner in San Joaquin County to buy a home. RealtyTrac says when home prices bottomed out, in the fourth-quarter of 2011, the median sales price was $145,000. Blomquist says now the median is $290,000.
"During that same time period where home prices have doubled in San Joaquin County, wages have gone up only 12 percent," says Blomquist. "And so what that leaves us at is if you're an average wage earner in San Joaquin County and buying a median priced home you're going to have to put 51 percent of your income toward that home purchase."