An annual income of $140,000. This figure is nearly double the national median household income of $78,538.

That's quite high. It means each household is earning around 200 million won.

This is why San Francisco is not just a wealthy city. The income structure is on a different level compared to other cities.

When I first encountered this figure, compiled based on the Census ACS 2023, I was once again surprised, even from my perspective as someone who has been observing this market for a long time.

Why is it so high?

It's because the expansion of Silicon Valley has spread into downtown San Francisco. Major tech companies like Salesforce, Twitter (now X), Airbnb, and Stripe are concentrated in the city, and many startup employees earn salaries of $150,000 to $200,000 or more while living in the city.

Their incomes significantly raise the overall median. However, it's hard to say that this number represents the reality for all residents of San Francisco.

Immigrant households in the Mission District and low-income households in the Tenderloin area are far from this average. It's essential to consider that the income distribution in this city is extremely polarized.

So, what impact has this income level had on the real estate market? The median price of single-family homes in San Francisco currently ranges from about $1.3 million to $1.6 million. Condos typically range from $700,000 to $1 million, and it's not uncommon for Victorian-style single-family homes to exceed $2 million.

If a household with an income of $140,000 buys a $1.5 million home, the mortgage burden, excluding a 20% down payment of $300,000, could reach $8,000 to $9,000 per month. This situation results in a housing cost burden ratio exceeding 40-50% relative to income. High incomes push up home prices, and in turn, those high prices leave only people with high incomes able to remain.

I've observed a pattern over more than ten years in this city. During tech booms, home prices rise sharply, and during tech downturns, they adjust quickly. The case of San Francisco condo prices dropping by over 20% during the interest rate hikes and large-scale layoffs in tech companies in 2022-2023 is evidence of this.

In other words, the real estate market in this city acts as a thermometer for the tech industry. With the ongoing AI boom, it seems to be under upward pressure again.

The rental market is similar. It's common for two-bedroom apartments to rent for between $3,500 and $5,000. Thanks to rent control policies, long-term residents maintain rents much lower than the market rate, but for new tenants, the entry barrier is very high. This paradoxical structure reduces the fluidity of the population and increases the gap between long-term residents and new arrivals.

From a real estate investment perspective, viewing San Francisco, a long-term holding strategy seems more effective than seeking short-term price gains. It has maintained a long-term upward trend over the past 20 years, and the city's geographical limitations (located at the end of a peninsula) severely restrict supply expansion. However, administrative burdens such as property taxes, transfer taxes, and various city ordinances are significant, so careful consideration is necessary before entering the market.

Simply looking at the median household income figure of $140,000 and concluding that "everyone is doing well in this city" is risky. The income landscape in this city is complex. The top 20% of households take home more than half of the total income, and it's a place where homelessness and luxury condos coexist on the same block.

If you're considering buying or renting a home in this city, I believe you should first read the context hidden behind the numbers.