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by kelly-estately
3766 days ago
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Hi usaar333, We got the median software engineer salary off of Glassdoor for San Francisco. It's possible that this skews lower than the actual median salary in the area, based on the type of people who report their salaries on Glassdoor, but that's probably the case for all the salary information we got. We were plainly looking at software engineers, not senior ones or any unique specialities. From there, we used a typical formula for mortgage affordability to figure out how much they could spend on a home. We compared that with recent sales over the last 6 months to determine what % of those homes they could have purchased. Hope that helps!
Kelly from Estately |
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Thanks for the follow-up. I understand you are pulling the data from Glassdoor, but what I wanted to further understand is:
a) Are we talking about the city limits or metropolitan area or something else?
b) What is the formula used for mortgage affordability? Are we assuming dependents? Debt? Age?
c) How is housing cost determined? The doc implies home sales, but is this reweighed? If a new condo opens up with 400 units, that can significantly distort the "home sales distribution", but insignificantly affects value of housing across the market.
My high-level thought is that is that intuitively the data feels off. i'm not sure if two of the largest issues:
A. Considering sales of larger homes (3 beds+) that would almost always be purchased by dual-income individuals
B. Using salary means to claim occupation X can afford Y% of homes.
"Average salary for occupation X can afford Y%" of homes is different than stating "The average worker in occupation X can buy Y% of homes". (Example: 4 eng make $100k; 1 makes $200k. 1 home in the market costs $400k. Say you use 3x income for affordability standard. Average income is $120k = no one can afford the home (0%). But actually 1/5 engineers can afford the home, meaning that the average worker can buy 20% of all homes)
completely explain the discrepancy from my own world-view (almost every programmer I know could in fact purchase a 1 bedroom condo).