Silicon Valley is so expensive that even Facebook and Apple employees can't afford to live near the office

  • Silicon Valley's housing crisis is serious.
  • A new report from Open Listings reveals that workers at five major tech companies, including Apple, Facebook, and Google, would have to spend over 28% of their salary to pay a monthly mortgage on a home near work.
  • Software engineers at Apple have it worst. They would have to pay an average of $5,211 a month to afford the median-priced home in Cupertino.

Silicon Valley's housing market is so bleak that even tech workers are struggling to buy homes.

A new report from Open Listings reveals that software engineers at five major Bay Area tech companies would need to spend over 28% of their salary to pay a monthly mortgage nearby.

Salaries of employees at 25 top tech companies:

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Salaries of employees at 25 top tech companies
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Salaries of employees at 25 top tech companies

Google

Average annual bonus: $32,478

Average sign-on bonus: $27,547

Average annual base salary: $136,000

Netflix

Average annual bonus: $0

Average sign-on bonus: $3,520

Average annual base salary: $206,000

Twitter

Average annual bonus: $120

Average sign-on bonus: $26,144

Average annual base salary: $149,000

Apple

Average annual bonus: $20,298

Average sign-on bonus: $27,201

Average annual base salary: $102,000

Facebook

Average annual bonus: $33,225

Average sign-on bonus: $45,708

Average annual base salary: $145,000

Oculus VR

Average annual bonus: $395

Average sign-on bonus: $6,926

Average annual base salary: $119,000

Amazon

Average annual bonus: $24,732

Average sign-on bonus: $41,340

Average annual base salary: $118,000

Square

Average annual bonus: $988

Average sign-on bonus: $17,996

Average annual base salary: $134,000

Uber

Average annual bonus: $31,633

Average sign-on bonus: $1,807

Average annual base salary: $117,000

Pinterest 

Average annual bonus: $4,374

Average sign-on bonus: $33,376

Average annual base salary: $151,000

Tesla

Average annual bonus: $4,779

Average sign-on bonus: $19,447

Average annual base salary: $105,000

UnitedHealth Group

Average annual bonus: $7,280

Average sign-on bonus: $118

Average annual base salary: $87,000

Snap Inc.

Average annual bonus: $10,588

Average sign-on bonus: $23,705

Average annual base salary: $127,000

Hewlett Packard Enterprise Co.

Average annual bonus: $10,756

Average sign-on bonus: $8,265

Average annual base salary: $131,000

CSRA

Average annual bonus: $13,732

Average sign-on bonus: $1,186

Average annual base salary: $100,000

credit: Facebook

Capital One

Average annual bonus: $15,114

Average sign-on bonus: $8,568

Average annual base salary: $107,000

Fitbit

Average annual bonus: $18,069

Average sign-on bonus: $25,459

Average annual base salary: $128,000

Pandora

Average annual bonus: $22,316

Average sign-on bonus: $18,886

Average annual base salary: $109,000

Microsoft 

Average annual bonus: $23,224

Average sign-on bonus: $20,191

Average annual base salary: $179,000

Airbnb

Average annual bonus: $23,250

Average sign-on bonus: $23,250

Average annual base salary: $124,000

Arista Networks

Average annual bonus: $27,497

Average sign-on bonus: $18,652

Average annual base salary: $151,000

credit: Facebook

Linkedin

Average annual bonus: $32,216

Average sign-on bonus: $25,418

Average annual base salary: $149,000

Dropbox

Average annual bonus: $32,707

Average sign-on bonus: $32,833

Average annual base salary: $144,000

VMware

Average annual bonus: $33,145

Average sign-on bonus: $18,851

Average annual base salary: $147,000

Salesforce

Average annual bonus: $39,959

Average sign-on bonus: $28,314

Average annual base salary: $142,000

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Open Listings, an online home-buying startup, used its data to look at median home sale prices near the headquarters of some of the largest and most high-powered tech companies in Silicon Valley over the last 12 months. It then gathered public salary data from Paysa to get the average income of software engineers working for those companies in the South Bay.

From there, Open Listings calculated what percent of tech workers' monthly income would have to be put towards a mortgage for a home within a 20-minute commute from the office (based on mortgage payments for a 30-year fixed loan with a 4% interest rate).

The results were not pretty.

Apple's software engineers have to shell out the most. With a median home sale price of $1.16 million in Cupertino, Apple workers would have to pay an average of 33% of their monthly income. That comes out to a monthly payment of about $5,211 on mortgage and property taxes.

Living in a median-priced home near the Google campus in Mountain View would cost Google software engineers 32% of their monthly income ($5,619). A home costs about $1.24 million.

With a median home sale price of $1.23 in Menlo Park, Facebook workers would have to shell out 29% of their paycheck ($5,431) to afford a home within a 20-minute drive of the office.

Software engineers at Reddit would have to put 32% of their monthly income towards a mortgage for a home nearby, while Twitter workers would have to part with 30%.

Their chances of signing a mortgage are bleak

Spending 30% of their monthly income on a mortgage payment "may not sound that crazy," said Judd Schoenholtz, cofounder and CEO of Open Listings.

In San Francisco, some desperate renters pay 50% of their income on rent.

But most lenders have a standard rule that a monthly housing payment — including principal, interest, property taxes, and insurance — should not take up more than 28% of income before taxes. Few lenders will approve a mortgage above that threshold because it would strain the buyer's ability to make payments.

"So when we say workers from Google or Apple would need to pay more than 30% of their income for a home nearby work, the reality is many of these workers wouldn't be approved for a mortgage in the areas we analyzed," Schoenholtz told Business Insider.

"Instead they would be forced further away with their home buying efforts. Or, like many others, they may be forced to rent much longer than they would like to," he added.

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See Also:

SEE ALSO: Silicon Valley is so expensive that people who make $400,000 a year think they are middle-class

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