Real Bay Area Income and Home Calculator, 2011 Edition!

October 13th, 2011 by 

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A couple of weeks back, we here at DQYDJ tried to get some Bay Area street cred with our screed on how Bay Area house prices make more sense than one might think (please read that article if you are genuinely interested in our model). After being informed by the readers on the Bay Area home site Burbed that our definition of the Inner Bay Area (the 'Real Bay Area') was too large, we're back for another pass. Thanks to Burbed's super-intelligent head editor Madhaus and a huge amount of comments we're back with two calculators we're titling "The Burbed and DQYDJ Real Bay Area Calculators!". Since all Bay Areans hope for 7.2% annual home value returns (check it - doubling every ten years!), we hope everyone will enjoy this little demonstration of the absurd amounts of wealth that the place we call home generates. (Although Washington D.C. makes more!)

The Real Bay Area Income Calculator

The Real Bay Area Income Calculator takes an income and compares it to the households across the Inner Bay Area using 2010-2011 Census Bureau Data from IPUMS-CPS. The calculator works well for salaries between $0 and about $1.05 Million. The calculator factors San Francisco & San Mateo County, and the San Jose-Sunnyvale-Santa Clara MSA into its model. Please see the IPUMS CPS site for details on what the Household Income figures include. By our model, the Inner Bay Area's top 5% of households make $273,456.52 or more, and the top 1% make $460,495.41 or more. The top 1% country wide come in at $380,354, so this seems a reasonable result.

Household Income Information
Input DataValues
Household Income ($)
Real Bay Area Household Statistics
Calculated ResultsValues
Income Index
Household Income Percentile
Number of Households that Make More
Number of Households that Make Less

Code created with assistance from Political Calculations

The Real Bay Area Home 'Affordability' Calculator

The Real Bay Area Home 'Affordability' Calculator takes a Home Price, Down Payment Information, and a number of input values to come up with a mortgage payment. Using the Front End Debt To Income ratio, it attempts to estimate the number of Bay Area Households which can service the debt on Household Income, using 2010-2011 Census Bureau Data from IPUMS-CPS (but it will not match the true numbers as it can't factor in the down payment saved up by other Bay Areans!).

Home Purchase Information
Input DataValues
Home Price
Down Payment Type (Choose Cash or Percentage)
Down Payment
Mortgage Term (Years)
Mortgage Interest Rate (Percentage)
Front End Debt to Income Ratio (%)
Real Bay Area Household Purchase Statistics
Calculated ResultsValues
Estimated Mortgage Payment ($)
Percentage of IB Households With Income to Cover Payment
Number of IB Households With Income to Cover Payment
House Hunting Rank

Code created with assistance from Political Calculations

The Real Bay Area Household Income Graph

Logarithmic, just like any good income scale (this is plotted directly, but our model is weighted). Median household income for the model was $82,938.50 and average was $107,635.30. Our quintiles cutoff at $35,039.55, $66,509.99, $102,458.32 and $156,491.55. Note that the nationwide median income in 2008 was $33,048.

Real Bay Area Household Income (2010-2011 IPUMS-CPS Data)

The Limits of the Calculators

IPUMS-CPS data was capped at the relatively paltry salary of $971,625.00. Mark Zuckerberg and Larry Ellison laugh at the insolence!

This limitation does hurt the models since only so much extrapolation can be done. Income estimates will break down around the $800,000 range and be unusable around the $1.05 Million range. If you are in a household that makes that much you probably don't care about an affordability calculator, however! Depending on where you set this calculator, this can also affect the numbers you get.

There is no reliable, recent source for 'wealth' in the Bay Area (if you find one please email me). The newest figures come from pre-bubble Real Estate times. As of today, there isn't a good way to estimate the ability of households to make down payments. We hope to rectify this, someday. For now... just enter a good number and be content with the data returned!

Data Sources

San Francisco County, San Mateo County, and San Jose-Sunnyvale-Santa Clara MSA data from 2010-2011 was used for these calculators.

Data was retrieved from IPUMS-CPS.
Miriam King, Steven Ruggles, J. Trent Alexander, Sarah Flood, Katie Genadek, Matthew B. Schroeder, Brandon Trampe, and Rebecca Vick. Integrated Public Use Microdata Series, Current Population Survey: Version 3.0. [Machine-readable database]. Minneapolis: University of Minnesota, 2010.

Ideas and critiques were incredibly helpful. A special shout-out to Madhaus at (with enough wisdom to fill 50 calculators), and the commentators on the thread with the original calculator.

The formula to determine income and the formula to determine income percentile was fit by ZunZun.

Thanks to Ironman at Political Calculations for the calculator template!

All statistical manipulation was done in R, and the graphs in OpenOffice. Free software made this article!



PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK lives in New Hampshire with his wife, kids, and dog.

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