SAN FRANCISCO -- Spoiler alert: This story will make you cry.
First the good news. The median price of a house in the San Francisco Bay area fell to $742,900 at the end of last year, according to analysis released last month from mortgage adviser HSH.com. Even better, you only need to earn $142,448 to buy it.
Why is that good news? For the San Francisco Bay area -- known for its sourdough bread, well-paying tech jobs and, yes, expensive housing -- those pricing and salary numbers are at bargain basement levels.
That median price, for instance, is about $1,500 less than it was in September, while 30-year fixed mortgages are at a record low of 4.02 percent.
"Affordability improved pretty much everywhere, largely because of unexpectedly low mortgage rates," said Keith Gumbinger, vice president of HSH.com, which factored in housing prices, a standard 20 percent down payment and mortgage rates to find home buyers' minimum qualifying salaries across 27 metropolitan areas.
It's probably no surprise the San Francisco area (encompassing San Francisco, Oakland and San Jose) ranked as the least affordable of the regions HSH analyzed. In comparison, house hunters in No. 2 ranked San Diego need to make only about $95,000 to qualify for the $493,100 median price there.
Despite those high costs, tech professionals around San Francisco shouldn't have too much trouble buying into the American Dream. Last year, for example, Silicon Valley tech workers earned an average $205,044, according to Joint Venture Silicon Valley, which analyzes the region's economy. That figure skews to the low end because it also includes salaries for janitors, cafeteria workers, gardeners and other low-wage service employees who work for tech companies, said Rachel Massaro, who heads the organization's research efforts.
Now for the bad news (remember, it's been good news until now): It's nearly impossible to find anything at or below the $743,000 median that isn't 60 miles from where you work, tiny to the nth degree, always covered in fog or just flat-out unlivable.
Case in point: A 500-square-foot (one bedroom/one bath) house in San Francisco just sold last month for a little more than $600,000.
"We just don't have very much to sell, and there are so many buyers just wanting to own something in San Francisco," said Dan Mclean, a real-estate agent with Coldwell Banker in San Francisco. "I'm about to offer a 630-square-foot cottage at $725,000, and I expect multiple offers, which will drive up the price."
Without question, the city of San Francisco is one of the hottest places to live. As a result, the median price here is $1 million -- well above the overall region. Nearly every house receives multiple offers and about a third get sold for all cash.
"I'm very frustrated to be honest," said Stefano Acerbetti, a software development manager for a startup in the city. Despite earning much more than the average tech salary, he's still had to make more than 10 offers in the past two and a half years.
"I feel other buyers are willing to do more than I am -- and paying $1 million with no contingencies just feels crazy," said Acerbetti. "Right now, you feel you have all the money you need to do crazy investments, but you open a loan for 30 years and things could change. I want to feel I could walk away if I need to."
Others have adopted a more anything-goes approach. Brandon Wright and his wife Leila had their hearts set on the affluent suburb of Burlingame, about 20 miles south of San Francisco, where the median price is $1.5 million. For almost a year and a half, they hit every open house they could and bid on every property within their budget of $900,000 to $1 million.
"When the price point is so low, you have to bid on any house -- and we bid on some terrible ones," said Wright. The couple finally bought their Burlingame home seven months ago. Its value has appreciated 7 percent since then.
And that's the thing about this insane real estate market. It just keeps going up.
"Shy of an earthquake or worldwide economic disaster, I don't think prices will change," said Judy Citron, with Alain Pinel Realtors in Menlo Park. "Low interest rates just continue to fuel the frenzy."
That's good news for people who already own homes throughout the region. It's not so great for people house hunting in the heart of Silicon Valley. In Palo Alto, for example, the median price is $2.18 million; in Menlo Park it's about $1.7 million; and in Atherton the median price for a single-family house is $4.45 million.
It's no wonder only 21 percent of Bay area residents can afford to buy homes, according the California Association of Realtors.
"I think Austin or Seattle would be better places to buy," said Acerbetti, though he has no plans to move away from San Francisco.
He's probably right. In Seattle, home buyers need to earn about $73,000 to qualify for the $352,000 median, according to HSH.com's analysis. And in San Antonio (the closest metro area to Austin it looked at), HSH found a $45,000 salary is enough to afford the $185,500 median price.
"The American Dream is not dead," said HSH's Gumbinger. Except in San Francisco, that is.
Ready for that tissue?