Silicon Valley’s Middle Class

I don’t normally write about bay area real estate, you should visit my friend Trang’s blog for that, but this NYT article has got many folks talking.

Jeremy is disgusted by these folks who are complaining and that are are financially better off than 99.99999% of the rest of the planet.

Silicon Valley is not just about money

There’s a lot of other reasons people come to Silicon Valley, and it’s not just to make money, there’s culture, great consistent weather, lots of education access to just about everything (Woods, mountains, tropics in Hawaii and Mexico) and of course a thriving tech community.

National Average home prices June 2007
(Zip Realty)

Cupertino: $1,213,063 (Silicon Valley)
San Francisco: $983,611 (Silicon Valley)
Washington DC Area: $598,222
Chicago: $349,433
Dallas: $221,954
Houston: $219,668
Phoenix: $393,740
Los Angeles: $809,065
Beverly Hills: $1,442,500
Las Vegas: $354,335
San Diego: $771,576
Chelmsford: $351,953
Laguna Hills: $439,500
Sacramento: $410,630


What’s middle class in Silicon Valley?

I’ve a lot of friends in real estate, and if the average home is a 3 bedroom with 2 baths and a garage, then you’re looking at aprox $650,000-700,000 for a old shack. What should be the combined household income? Go to MLS listings to see what $700,000 will buy you, on average it will be 1000-1800 square feed, built in 1960s. These may not be in cities that are highly desired due to location, school district, or other environments.

Income needed to be Middle Class
$150,000 of combined income will be needed by most lenders to afford such a home, keep in mind this is for that 3 bedroom older home, this doesn’t account for any expenses like children, education our luxuries. So when the millionaires are done complaining “You’re nobody here at $10 million,” Match.com CEO Gary Kremen told the New York Times, we can stop to realize that total assets for many middle class folks in the Silicon Valley are indeed already over million.

Summary
1) Not everyone in Silicon Valley is here just for money
2) To live here requires a significant amount of money to be middle class, a million in assets may be close to average.