The hefty salaries Apple pays its software engineers are no longer enough to buy a home within a short commute of their campus in costly Cupertino, according to a new study by Open Listings, an online real estate brokerage.
The median home price within a 20-minute commute of the Spaceship campus is over $1.16 million, according to Open Listings. Meanwhile, the average annual salary for a software engineer at Apple is $188,000, public salary data from Paysa states.
Using the 28-percent rule that most lenders use in assessing a buyer’s ability to afford a mortgage — that their monthly housing payment, including principal, interest, property taxes and insurance, should not take up more than 28-percent of their income before taxes — the study found that an Apple engineer might not be able to afford a home near their workplace on their salary alone.
The monthly home cost for an Apple software engineer earning the above-stated average salary would account for 33-percent of their paycheck, above the 28-percent threshold for lending, according to the study’s calculations.
“Somewhat surprisingly, those needing to spend the most of their paycheck on housing aren’t in the heart of San Francisco, but rather in Cupertino and nearby Apple’s office where home prices have gone up 20-percent over the last year,” according to an Open Listing blog on the issue.
The study’s authors added, “With limited supply in Silicon Valley, prices here are being driven by bidding wars and buyers are being increasingly priced out of neighborhoods.”
And due to those skyrocketing prices, “things have gotten so bad in Silicon Valley that schools are closing as families can no longer afford to have children within certain school districts,” they said.
As can be seen in Open Listing’s chart below, the study found tech workers are facing similar affordability issues around the Bay Area and Los Angeles area.
For this reason, Open Listings is among those tech companies supporting Sen. Scott Weiner’s proposed bill to spark more housing.