MercuryNews.com | 05/11/2006 | Study: State is one of poorest in U.S.
Critics have long complained that the federal government uses an outdated formula to calculate the official poverty standard, which determines individual eligibility for welfare and other programs, and is also used by the federal government when it allocates money to state and local agencies.

The formula is based on income levels and the cost of food, but does not take into account housing costs that vary greatly from one region to another, said Deborah Reed, who wrote the PPIC report.

For example, the federal poverty level for a family of four in 2004 was $19,157. But the U.S. Department of Housing and Urban Development estimated that fair market rent for a two-bedroom apartment that year in Santa Clara County was $21,852. That means a family earning $20,000 was above the poverty level, yet potentially homeless.

“There are people living just above the federal poverty level in California who are not doing as well as people who are officially living in poverty in Mississippi and Louisiana,” Reed said.

Using the official federal standard, California has the 15th-highest poverty rate in the country, with 13.3 percent of its residents living below the poverty threshold.

But when Reed adjusted the formula to reflect the cost of housing, California’s poverty rate rose to 16.1 percent. That gave it the third-highest ranking in the country, Reed said — behind only Washington, D.C., and New York.

Using Reed’s calculations, 15 percent of Santa Clara County residents live in poverty, compared with 12 percent nationally.

Wow… I never thought about this.
I love how people say “Oh, other than the cost of housing, living in the Bay Area isn’t that expensive.”

Does that make sense to you? Isn’t that like saying “Oh, other than the radiation, it’s pretty safe here.”

Region’s median income on the rise – Sacramento Business Journal:
Median family income rose 3.15 percent over the past year in the Sacramento area, based on Department of Housing and Urban Development figures for 2006.

Median family income for the Sacramento Metropolitan Statistical Area is $65,400, up from $63,400 in HUD’s 2005 estimates.

The median means that half the households in the region make more and half make less.

The highest median-income metropolitan area in the country is San Jose-Sunnyvale-Santa Clara, with a median income of $97,100, up 3.4 percent from the previous year. The second highest in the country was Bridgeport-Stamford, Conn. which had a median income of $95,900.

The median income in San Francisco-San Mateo-Redwood City was $91,200. Santa Barbara-Santa Maria’s median income is $65,800. The median in San Diego-Carlsbad-San Marcos was $64,900.

Wow… a median income of $97,100. No wonder real estate is so expensive. Maybe prices will never fall!

Home sales, published April 15

• 1435 Oak Rim Drive $2,000,000, 3,080 SF, 4 BR, Berry Trust to M. Tsang; 1971:$85,000
• 1456 Montego Drive $1,200,000, 2,849 SF, 6 BR, Paiga Trust to K. & M. Morrison; 1977:$123,500
• 5125 Devon Park Court $870,000, 2,533 SF, 5 BR, Bulder Trust to J. Adame; 1973:$43,000
• 4880 Rue Calais $660,000, 1,446 SF, 4 BR, Pham Trust to B. Hernandez; 1979:$71,900
• 3989 Twilight Drive $1,100,000, 2,561 SF, 5 BR, Barker Trust to J. & C. Weisenfeld; 1977:$105,800
• 250 Abbot Ave. $740,000, 1,290 SF, 3 BR, J. Tong to J. Tong; 1979:$76,000
• 3353 San Onofre Court $655,000, 1,500 SF, 3 BR, Gonzales Trust to E. Ayala; 1976:$31,900
• 2509 Bluestone Court $662,000, 1,189 SF, 3 BR, C. & L. Bernardo to J. Vera; 1977:$50,800
• 1061 Pizarro Lane $1,195,000, 2,360 SF, 4 BR, Vickers Trust to M. Boschetti; 1976:$88,600
• 250 Sandpiper Court $890,000, 1,640 SF, 3 BR, Hughes Trust to A. Bharwani; 1975:$59,000
• 35466 Eden Court $714,000, 1,669 SF, 2 BR, R. & B. Nichols to M. & A. Campos; 1978:$79,500
• 25960 Vinedo Lane $2,225,000, 2,175 SF, 3 BR, Barbara Trust to Vinedo Lane Property; 1972:$68,500
• 308 Bean Ave. $891,000, 1,160 SF, 2 BR, O. Kennedy to C. Lauren; 1978:$101,000
• 1010 Almanor Ave. $995,000, 1,620 SF, 3 BR, Livermore Trust to L. Joyce; 1978:$86,500
• 2188 Petersburg Drive $738,000, 1,796 SF, 4 BR, J. Lavigne to F. Mendez; 1972:$33,000
• 1112 Glacier Ave. $740,000, 1,240 SF, 3 BR, V. & M. Kangas to T. & K. Amborski; 1974:$44,000
• 410 Redwood Ave. $842,500, 2,060 SF, 4 BR, H. & T. Wilson to M. Galea; 1977:$70,000
• 690 Port Drive $1,020,000, 1,800 SF, 3 BR, J. & J. Freeman to R. Ives; 1976:$81,000
• 3238 Agate Drive $600,000, 1,040 SF, 3 BR, E. Loy to P. Gamino; 1971:$24,000
• 3344 Princeton Way $742,000, 1,442 SF, 3 BR, Carpenter Trust to P. Rayala; 1976:$66,500
• 12622 Kane Drive $1,420,000, 2,329 SF, 4 BR, Carlson Trust to S. & T. Fong; 1977:$123,000
• 509 Diamond Ave. $780,000, 1,140 SF, 3 BR, M. Beller to J. Kwan; 1977:$66,000
• 3641 Sawtooth Court $490,000, 1,461 SF, 4 BR, J. Reyes to J. Yost; 1979:$179,700
• 787 North Fairoaks Ave. #2 $409,000, 926 SF, 2 BR, Bickelman Trust to A. Tejeda-Ortiz; 1979:$69,000
• 619 North Henry Ave. $786,000, 1,431 SF, 3 BR, Leverett Trust to R. & E. Wright; 1974:$46,500
• 1549 Dry Creek Road $1,085,000, 2,333 SF, 4 BR, Murphy Trust to R. Sanchez; 1972:$60,000
• 1445 Minnesota Ave. $1,128,000, 2,245 SF, 3 BR, M. & L. Miller to U. & M. Guzman; 1976:$60,000

Ah… to have bought a place in California before 1980. Better than working.

Nothing like the ol’ generational transfer of income. Massive mortgages, peak oil, falling incomes, implosion of social security – interesting times ahead!

Let’s compare two counties: Nassau County (outside of New York City) and Santa Clara County (you know where that is!)

First, a quote from the WSJ about Nassau County:

WSJ.com – Mixed-Use Project Aims to Revitalize
Nassau County, which stretches just east of John F. Kennedy International Airport to the less densely populated Suffolk County, is home to about 1.3 million residents. In 2005 an estimated 17.5% of Nassau County households — or 78,816, the seventh-highest county total in the U.S — had net worths of $1 million or more, excluding the value of their primary residences, according to a division of TNS, a London-based research firm.

Nassau’s median home price rose in December to $482,000, well above the national median of $213,000, according to Moody’s Corp.’s Economy.com. Nassau’s employment level fell in June by 0.1% from a year earlier compared with the national gain of 1.5%, according to the Bureau of Labor Statistics’ most recent data.

Nassau County has the 7th highest number of millionaires, and the median home price is $482,000.

So where is Santa Clara?  The median home price is $670,000
- $188,000 more than Nassau. Actually, a more fair median home price for Santa Clara would be $740,000 as most homes in Nassau are houses. That makes the delta $258,000 – a quarter million.
Well the answer is here:

Report: Number of U.S. millionaires reaches record – Mar. 28, 2006
The millionaires next door
Ten counties across America with the highest number of millionaire residents.

Rank County No. of millionaire households
1 Los Angeles County, CA 262,800
2 Cook County, IL 167,873
3 Orange County, CA 113,299
4 Maricopa County, AZ 106,210
5 San Diego County, CA 100,030
6 Harris County, TX 96,593
7 Nassau County, NY 78,816
8 Santa Clara County, CA 75,371
9 Palm Beach County, FL 69,871
10 Middlesex County, MA 67,552

Bottomline: Santa Clara has fewer millionaires (especially by %), but has a median home price that is $258,000 more than Nassau County. And according to most cost of living calculators, the basics are more here in Santa Clara as well.
So does it make financial sense to live in the Silicon Valley?

Well, I guess you can’t put a price on sunshine.

Continuing with the value theme… what’s the Cheapest House in Santa Clara County? (excluding Morgan Hill – let’s try to limit our daily commute to just 2 hours)

It looks like this is the winner:

MLSlistings Property Detail for MLS number 615527
109 ROBERTS CT
San Jose, CA 95110

$425,000
Cozy Bungalow
This cozy home features recently remodeled bathroom & kitchen with granite floors, dual pane windows, wood floor in living room & dining area, marble shower, Sunroom added with permit not in sqft, Laundry in utility room in Backyard

This Single Family Residence has the following features:
MLS#: 615527 Approx Age: 66 Years Approx Sq Ft: 520
Detached Single Family 1 Story Cottage/Bungalow
1 Bedroom 1 Bathroom 1 Stall Shower

And, convenient access to empty warehouse fields! All for $817 per square foot!

Let’s look for some deals… for example… what’s the cheapest condo in Santa Clara?

MLSlistings Property Detail for MLS number 612153
932 KIELY BL #C
Santa Clara, CA 95051

$259,000
Homeowners’ Association Fee:$302

This Condominium has the following features:
MLS#: 612153 Approx Age: 43 Years Approx Sq Ft: 440
Condominium 51-100 Units Low Rise (1-3 Stories)
Contemporary 1 Level 2nd Floor Unit

Wait a minute… that’s $588 a square foot! More than than a typical house! On the other hand, you do get to live next to a hospital…