SAN JOSE, Calif. -- Silicon Valley's robust economy has added jobs for the last eight years in a row, but the region's rising wages have failed to keep pace with skyrocketing home prices, a new economic study revealed Wednesday.
A population surge is underway in Silicon Valley, with a net gain of one person every 46 minutes -- 32 people a day -- but the huge housing and living costs are making life difficult for many, according to the Silicon Valley Index, released by Joint Venture Silicon Valley's Institute for Regional Studies.
In 2017, Silicon Valley's per capita personal income was $93,707, far higher than the California median of $56,374. But the 4.4 percent increase in the region's incomes last year failed to keep pace with home prices, which soared 7.4 percent during 2017, the report stated.
Home prices have continued to rise even though multiple economic reports document that employment growth is slowing in Silicon Valley.
"Our spectacular success has somehow created a harsh environment," Russell Hancock, president of Joint Venture Silicon Valley. "Housing is out of reach for all but a very few. Those who can't afford it are living challenging lives, or commuting in from far-flung places. Most people don't find transit options compelling, so we spend ghastly amounts of time in traffic."
The Valley's median sale prices for homes are 2.1 times higher than they are statewide; apartment and home rental rates are 1.3 times higher; and child-care costs are 1.2 times higher, the report stated.
"Fewer than 34 percent of first-time homebuyers can afford a median-priced home in Silicon Valley, compared to 49 percent statewide," the report stated.
Combined, Santa Clara and San Mateo counties added about 47,000 jobs in 2017. But that employment boom occurred as those two regions together launched 12,000 residential units, the report stated.
"We are falling further behind," Hancock said in an interview. "Wages are not keeping pace with the growth in home prices. We are not building enough homes to keep pace with the jobs we are creating."
Still, the pace of housing construction is picking up. The 12,000 residential units initiated in 2017 doubled the 6,000 that were launched in 2016, Hancock said.