The 1 Place Facebook and Apple Employees Can Barely Afford to Live
Owning a home is a big part of the American dream. Having a place you can call your own is great, but some states and other locations are too expensive for most people. Even high-paid tech workers have a tough time living near their jobs. As we are about to see, there is the one place Facebook and Apple employees can barely afford to live.
Tech jobs pay well
- A lot of jobs in the tech sector pay more than $100,000 per year.
Working a tech job pays well. According to the Bureau of Labor Statistics, software developers earn $102,000 a year, data scientists $111,000, and hardware engineers make $115,000 a year. As we are about to find out, some tech jobs pay even more.
Next: A tech company where the money is even better.
Apple employees are well compensated
- Some Apple workers make almost 3.5 times the national median.
Aside from Apple Store geniuses, most Apple employees earn more than $100,000 a year. According to Payscale, Apple senior software engineers make an average of $152,000 each year, which, as we will discuss in a minute, is nearly 3.5 times more than the national median. That’s not including some of the added unique perks you get for working at the Cupertino, Calif., headquarters.
Next: The pay up the road is pretty nice, too.
Facebook employees make a bundle
- Even Facebook interns get a nice paycheck.
The average Facebook salary is well into six figures, according to Glassdoor. The average base salary for a software engineer is $127,000, and research scientists earn $138,000. Even the Facebook interns make more than $7,000 a month. Google pays well, too, with the average senior engineer hauling in more than $160,000 per year.
Next: Tech workers earn much more than the national median.
Google, Facebook, and Apple employees are paid well…
- Full-time tech workers make a lot more than the national median.
If you haven’t figured it out yet, tech jobs are hot. In fact, they’re some of the hottest jobs out there. Facebook, Microsoft, and Amazon need workers, but they can never find enough qualified employees. That’s why so many tech jobs pay six figures while the national median is $44,564. Yet those big salaries can’t pay for everything in the one place Facebook and Apple employees can barely afford to live.
Next: The one place Facebook and Apple employees can barely afford to live.
…but they can’t afford to live here
- Silicon Valley is off-limits to even the highest-paid tech workers.
We’ve heard before about how expensive it is to live in Silicon Valley, and everything we’ve heard is true. According to data from HSH Associates, to buy a house in San Jose you need to make $235,646, which is more than four times the national average of $54,570.
Things aren’t much better up the road in San Francisco, where you need to make $176,121 to afford a house. It’s all very similar to one of the depressing secrets of working at Disneyland.
Now let’s find out why Silicon Valley is the one place Facebook and Apple employees can barely afford to live.
Next: You definitely have to meet this one criterion to get a home loan.
One reason banks won’t provide a loan
- Housing costs shouldn’t exceed 28% of your income.
Banks can’t give you a mortgage if your payments exceed 35%, according to Forbes, but they look for a much lower number. Ideally, housing costs shouldn’t be any more than 28% of your income. Only approving loans that meet the 28% rule is a smart move for banks, but it means Silicon Valley is the one place Facebook and Apple employees can barely afford to live.
Next: Even high-paid tech workers can’t meet banks’ criteria.
In Silicon Valley, tech workers shell out a lot more
- The median home price is more than $1 million.
The HSH Associates data reveals the median home price in San Jose, the heart of Silicon Valley, sits at $1.2 million. A little further north in San Francisco, the median is $920,000. Putting it bluntly, the Silicon Valley housing market is out of whack, so it’s the one place Facebook and Apple employees can barely afford to live.
OpenListings did the math and discovered that a 30-year mortgage at 4% interest keeps most tech workers from being able to afford average houses in Silicon Valley. Most of them wouldn’t come close to meeting the 28% threshold lenders look for.
- Apple employees need to use 33% of their income to buy a house within 20 minutes of the Cupertino, Calif., headquarters.
- Reddit and Google employees would spend 32% of their income to live close to San Francisco and Mountain View, Calif., respectively.
- Twitter (30%) and Facebook employees (29%) might get mortgage loans to live near San Francisco and Menlo Park, Calif., respectively, but strict lenders would say no.
Next: One company is chipping in to help solve the problem.
Tech companies are part of the problem, and 1 is helping solve it
- Cisco is donating $50 million to fight homelessness in Silicon Valley.
Tech companies such as Apple, Facebook, Google, and Twitter helped create the Silicon Valley housing crunch. They need employees and offer fat paychecks to lure the best of the best, but the cities they call home can’t handle the influx.
California needs 180,000 new houses a year to keep up demand, according to Palo Alto Online, and the state falls woefully short. The ripple effect? Homelessness is out of control in Silicon Valley. TechCrunch reports Cisco is donating $50 million to help fight homelessness in the area, where Santa Clara and San Francisco counties have about 15,000 homeless, combined. Maybe Mark Zuckerberg and some of the area’s other rich Americans will follow Cisco’s lead.
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