I was just digging thru some data on California and thought it was insightfull. The average home price is $467,000 while the average family income is only $61,021. This means the average home costs 7.65 times the annual average family income. The rental rate that my father used to charge was 1% per month of the value of the rental home. It took 1% to make any money on the rental property. Now if you look at what the $467,000 home as a rental, it would rent for $4,670 per month. That works out to $56,040 per year. That means the average family in California would have to spend 91.8% of their gross annual compensation. Given deductions from their gross pay, the rental cost of their homes would take over 100% of their pay. Now, maybe you can see why California is so screwed up financially.
I could not believe these numbers, so that is why I did this blog.
