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updated 3/6/2007 2:20:32 PM ET 2007-03-06T19:20:32

America's five most expensive markets to own a home have something in common. They're all located in California.

The San Francisco-Oakland area is saddled with the nation's costliest housing, according to a new Bizjournals study. And the situation is nearly as bad in Los Angeles, San Diego, Oxnard-Thousand Oaks and San Jose.

"California has a lot of strengths, but even so, we're seeing more of our young people relocate out of state," says Leslie Appleton-Young, chief economist of the California Association of Realtors. "And more and more, their decisions are based on housing prices. How can you even imagine a starter condo at $600,000?"

Bizjournals compared housing costs and income levels in the 95 U.S. metros with populations above 500,000. The study used statistics from the 2005 American Community Survey, conducted by the U.S. Census Bureau. From our study, bizjournals identifies the 10 most affordable markets to own a home and the 10 costliest markets to own a home.

The median owner-occupied home in the San Francisco-Oakland area was valued at $655,300 in 2005. A 6-percent mortgage on such a house, with a 10 percent down payment, would run $3,536 per month. Taxes would drive total expenses up to $3,815.

Such a bill would consume 70 percent of the San Francisco-Oakland area's median household income of $5,449 per month. (Median is a midpoint, with half of all households being higher and half lower.) That's more than two and a half times the national average of 27 percent.

Cost pressures have forced lenders and purchasers to take unusual steps. Fifty-year mortgages are now available in some California markets. One-fifth of the state's home buyers last year took out mortgages with no down payment, and two-fifths relied on a second mortgage, according to the California Association of Realtors.

"Everyone talks about housing prices," says Appleton-Young. "People who don't own, they wonder if they should buy now, and whether they can afford it. On the other side of the divide, many homeowners are seeing great gains. They're benefiting from high prices."

Los Angeles and San Diego — where housing expenses respectively consume 69.8 percent and 67.8 percent of monthly income — were nearly as bad as San Francisco-Oakland. Even Bakersfield, the cheapest of the 10 California markets in the study, was 10 points above the U.S. average at 37 percent.

Housing prices at these high levels could act as a drag on the state's business climate, says Stephen Levy, director of the Center for Continuing Study of the California Economy.

"So far, we've been able to weather these great disparities, but I think that era is coming to an end," he says. "Our analysis shows that high housing prices are increasingly going to be a competitive disadvantage."

Housing costs in 16 U.S. markets — including nine in California — ran higher than 40 percent of the median household incomes for those areas, according to the study.

Prominent non-California metros in that expensive group were New York City (57.5 percent), Honolulu (50.7 percent), Boston (46.9 percent), Miami (42.8 percent) and Las Vegas (40.8 percent). All but Vegas are located along the Atlantic or Pacific oceans.

The housing picture is much brighter in Augusta, Ga., a manufacturing, military and health-care hub of half a million people located about 150 miles east of Atlanta. It easily took first place as the most affordable metro to own a home.

The typical house in the Augusta market was valued at $103,300. Mortgage and property-tax payments for such a home, based on Bizjournals' estimates, would be $613 per month.

Those expenses would consume just 17.4 percent of the monthly income for the area's typical household. No other major market had housing costs below 18 percent of income. Only 12 of the 95 metropolitan areas in the study group did better than 20 percent.

The study found that reasonably priced homes are concentrated in inland regions of the South, Midwest and the industrial Northeast. Joining Augusta in the top five were Wichita, Kan.; Little Rock, Ark.; Baton Rouge, La.; and Birmingham, Ala.

Bizjournals estimated that the nation's average tab for a mortgage and property taxes would run $1,039 per month. That would eat up slightly more than one-quarter — 27 percent — of America's median household income of $3,854 per month.

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