The median price for a single-family home in Marin County, Calif., is more than $1.3 million and at that price only 17% of Marin households can afford to buy, according to a new report by the California Association of Realtors.
In its second-quarter affordability report, the association found that Marin households would require a minimum annual income of $261,070 to purchase a median-priced home in Marin.
The association also reported that Marin's market is among the six least affordable in the state.
San Francisco was the least unaffordable; only 12% of households there can afford a median-priced, single-family home, which is estimated to cost $1.45 million.
In San Mateo County, 14% of households can afford a median priced home, estimated to cost nearly $1.47 million. In Santa Clara and Santa Cruz counties, as in Marin, 17% of households can afford to purchase.
The association said that statewide 29% of households can afford to purchase a median-priced home costing $553,260, down from 32% in first-quarter 2017 and down from 31% in second quarter 2016.
The association said, "Higher home prices resulting from a severe lack of homes for sale and high demand during the hot home-buying season eroded California's housing affordability in the second quarter."
Housing experts said the lack of affordability for people looking to purchase homes is not just bad news for buyers.
"If there are less affordable starter homes on the market, households that would have otherwise purchased homes continue to rent, driving up home prices," said Sydney Bennet, a research associate with ApartmentList.com, a website that tracks the national rental market.
"The lack of single-family home construction, especially at the lower end of the market, is driving up rent prices up in Marin," Bennet said.
Michael Burke, a Greenbrae real estate broker who has studied Marin's rental market, said, "That's a given. As homes become less affordable there is more demand on the rental market and as the law of supply and demand dictates prices have to rise."
Last month, ApartmentList.com reported that an average one-bedroom apartment in San Rafael was renting for $2,470 a month in July, while a two-bedroom cost $3,110. That amounted to a 3.6% rise over rental prices in July 2016.
Those prices far exceed those in many other parts of the country. ApartmentList.com reported the median rent nationwide for a two-bedroom apartment in July was $1,160.
Bennet said, "From 2010-2015 both the San Francisco and Santa Rosa metros added more than six new jobs per building permit, driving both home and rental prices up in the SF/North Bay region."
Despite the lack of affordability, Marin home sales remained strong in June, the most recent month in which data is available. The total number of homes sold in Marin declined 1.6% in June to 367 from the 373 homes sold in June 2016, according to Irvine-based CoreLogic.
But Yoko Kasai, president of the Marin Association of Realtors and one of the owners of the Front Porch Realty Group, said, "It is starting to slow down a little bit. We're seeing some price reductions, especially at the higher end. Homes are on the market for just a little bit longer now.
"I think we're headed toward an adjustment of some sort," Kasai said. "I think sellers need to be cautious where they're pricing their homes."
How have the sales levels remained as high as they have given the low affordability?
Kasai said there is quite a bit of foreign money coming into Marin and buyers coming from San Francisco, where homes are even less affordable. And she said a fair number of buyers are receiving financial help from their parents.
Robert Eyler, the chief economist of the Marin Economic Forum, said Marin's sky-high housing prices will continue to make it tricky for local businesses trying to find workers and guarantee that workers will continue to commute into the county to fill those positions in ever greater numbers.
