Houses in San Francisco earn more per hour than most of their owners – or anyone else, for that matter, – do at work, a new report finds.
The study by real estate site Zillow finds that houses in the Bay Area city typically appreciate at a rate of $60.13 for each working hour, calculated based on a 40-hour work week.
Minimum wage workers in San Francisco currently take home $14 an hour, rising to $15 an hour this summer. And the average hourly wage in the San Francisco-San Mateo metro area was $36.61 in 2016, reported the U.S. Department of Labor. The national average hourly wage was $23.86.
In nearby San Jose, Calif., meanwhile, homes typically appreciate $98.81 per working hour, Zillow reports. The city has a minimum wage of $13.50 an hour.
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The typical U.S. homeowner earns $7.09 in equity for each working hour, compared to the federal minimum wage of $7.25 an hour, according to the report.
The Zillow report compares the average equity gain per working hour to the minimum wage in 50 U.S. cities. Of course, housing prices and hourly pay aren’t exactly equivalent, the study concedes. The comparisons are more of a number-crunching exercise.
“It is not money that accumulates directly into a checking account or that can be spent on daily needs,” wrote Zillow senior economist Aaron Terrazas. “Equity is only available once a homeowner chooses to sell a home, and even then is often subject to various taxes and other expenses.”
Housing prices continue to skyrocket in San Francisco and the Bay Area, and they’re not expected to slow down any time soon.
San Francisco and San Jose are poised to be among the most expensive markets in the nation throughout 2018, reported Zillow, with median home values of $1.1 million in San Jose and $893,000 in San Francisco. A renter or prospective buyer would need to earn at least $170,000 a year to live comfortably in either market, according to HSH.com.
“The way the economy in the Bay Area is right now, it’s like the demand is on steroids,” Michael Rawson, director of the Public Interest Law Project based in the Bay Area, told Newsweek. “It drives the land prices through the roof.”
In Silicon Valley, a home that burned down two years ago just went on the market for $800,000, though real estate agents say the price reflects the value of the lot in San Jose, Calif., more than the uninhabitable home.
In March, a two-bedroom, one-bath home near an Apple campus in nearby Sunnyvale sold for $2 million – a record $2,358 per square foot, reported KPIX. And in 2017, a fire-gutted house in San Francisco’s Bernal Heights neighborhood sold for $700,000, according to Fortune.