Saving for a down payment can often be challenging for first-time homebuyers, particularly in high-cost areas like Northern California, and it is likely an issue that most consumers carefully weigh before the housing hunt begins.

A recent report outlined just how much homebuyers would need to save for a 20 percent down payment in major metropolitan markets across the country. Not surprisingly, some of the largest down payments are required in markets throughout California.

A median-priced home in the U.S. is $192,500, which means buyers need $38,500 for a 20 percent down payment, according to the report by Zillow. But in most market areas in California, the down payment cost is much higher and the income burden is greater. In fact, metro areas in California were among the cities where homebuyers needed to save the highest percentage of income to cover a 20 percent down payment.

For homebuyers in areas like San Jose, San Francisco and Los Angeles, saving a year’s worth of income wouldn’t even cover a 20 percent down payment, according to the report. Buyers in those markets need to save at least 180 percent of the average income in those cities.

In San Jose, for example, the median 20 percent down payment translates to $192,320. That represents 182 percent of the average income and is roughly the same as the median price for a home in the U.S.

San Francisco-area buyers are faced with a median 20 percent down payment of $164,920, which is 180 percent of the average income.

Buyers in Sacramento need $70,040 for a 20 percent down payment, which is about 108 percent of the average income.

The down payments are particularly steep when compared to the nation as a whole: the average American homebuyer sets aside two-thirds of his or her annual income to make that 20 percent down payment.

“It’s a big number,” Zillow Senior Economist Aaron Terrazas told CNN Money. “Very few are saving for a down payment in one year, it’s something they do over multiple years. And for renters who have been faced with rising rent and health care costs, it’s very difficult to put away any money at all.”

There are programs to assist first-time homebuyers, particularly those that offer smaller down payment requirements. While it is possible to put down less than 20 percent, that often translates to a higher interest rate and the extra cost of private mortgage insurance for homebuyers.

“Saving enough cash for a down payment is a major barrier to homeownership, especially in expensive markets, where a 20 percent down payment can cost nearly $200,000,” said Zillow Chief Marketing Officer Jeremy Wacksman. “While it’s possible to buy a house with a smaller down payment, 20 percent ensures the best rates. As important as it is to find a monthly payment you can afford, some buyers’ budgets will come down to the amount of cash they can bring to the table.”

Here’s what our local Northern California offices had to say about market conditions as we started the new year:

East Bay – The East Bay market has had limited inventory and steady buyer demand and sales activity. Almost every property is receiving multiple offers because of the low number of homes available for sale, our Oakland manager reports, and buyers are eagerly waiting for more homes to come on the market. In fact, the office had 5 multiple offers. Sales associates have multiple buyers and many of them are looking for the same home, she added. The Oakland office has observed that many properties are being repaired and staged to be listed in the future, possibly by March.

Monterey County – Rain was a big factor in the area in the first weeks of January, but that hasn’t deterred sales associates and consumers. Buyers are looking in all price points and “sellers that have been waiting for the new year seem to be ready to get serious about selling,” says the manager of our Monterey Peninsula offices. A $10 million-plus property went into escrow this past week. There is limited inventory in the mid-level million-dollar price point.

North Bay – Pent-up buyer demand and low inventory continue to affect the North Bay area. However, a “surge” of new listings is expected in the Greenbrae and Southern Marin offices in coming weeks after the Super Bowl, our office managers report. The market is so short on supply that it has created an “off market” supply that is equal to almost 25 percent of all transactions in January, our Southern Marin manager reports. The office had 18 open houses and 10 properties under contract. Many buyers missed out on the opportunity to buy last year in Marin County, our Greenbrae manager said, so there could be a bump up in sales as new inventory comes on the market. The Greenbrae office had 7 open houses and 8 properties under contract. The high-end sector has also seen some activity, with new multi-million dollar listings coming on the market in January and February, and 2 $5 million homes going into escrow during the last week, said our Southern Marin office manager.

Placer County – Open house activity was slow in the first two weeks of the year because of the heavy rains and flooding, our Auburn manager explained, but listing inventory is steady and there were 3 multiple offers and 7 homes under contract. A majority of buyers are coming from the Bay Area, especially San Jose and Marin, because Auburn and the surrounding communities offer more affordable housing options, she said. Conditions in the Previews® luxury market are basically unchanged since December. High-end properties are being shown although the majority are overpriced, according to the Auburn manager, and several luxury listings will be hitting the MLS in upcoming weeks and months.

Sacramento County – Listing inventory is on the rise and sales are declining, according to both our Folsom and Sacramento Fair Oaks managers. However, the Fair Oaks office reported 6 multiple offers and 7 properties under contract. The office also had 19 open houses. The offices in the region are gearing up for the spring selling season.

San Francisco – The start of the new year was marked by a bump-up in listings. Total inventory was 30 percent higher compared to a year earlier, shares our Lombard office manager, but sales and buyer traffic have lagged. Entry-level priced homes and fixer uppers are seeing the biggest demand, while the mid- to upper-priced condos have seen the largest number of price reductions, he said, with two-thirds of closed condo transactions selling at or under asking price.  The Lombard office had 2 multiple offers and 3 properties under contract. With mortgage interest rates expected to climb this year, open houses and broker tours have been well attended, and sellers are noticing increased demand and not waiting until the Super Bowl to sell in hopes of “catching a more-than-ready and able buyer,” according to our Market office manager.

San Francisco Peninsula – There was a significant slowdown in activity, due in part to the holidays and inclement weather, with our Burlingame, Burlingame North, Half Moon Bay, Palo Alto Downtown, and Redwood City managers reporting that sales activity decreased. Several offices in region held open houses during the last two weeks – 6 in the Burlingame office, 4 each in the Burlingame and Half Moon Bay offices, and 2 in the Palo Alto Downtown office. Demand seems to be healthy. Our Redwood City manager says there are still a lot of buyers, with very limited inventory, and both the Half Moon Bay and Burlingame offices dealt with multiple offers (2 each).

Santa Cruz County – The Santa Cruz area has seen a decline in overall sales but an increase in sales activity in the high-end market. Inventory is steady when compared to the level of listings a year earlier, however sales are off by about 25 percent. Previews® luxury property sales, on the other hand, have climbed, with 15 more unit sales recorded compared to the same period last year. Open house activity is on the rise in the region.

Silicon Valley – The new year has started off on a strong note, with sales activity and prices picking up in some parts of Silicon Valley. Gains in inventory are starting to emerge, but inventory is still not sufficient to meet the robust buyer demand in most areas. There are currently only 32 active listings in all of Willow Glen with only 3 of those listings priced under $1 million. Sales associates are reporting heavy traffic at open houses and strong buyer demand, says the San Jose Willow Glen manager. Many of the homes that had been lingering on the market have either gone off the market or have been absorbed, said our Los Altos office manager, and there is a little more than a month’s worth of inventory. With such a limited number of homes available for sale, properties are still receiving multiple offers and some are going for over the asking price. Average sales prices climbed in multiple communities, according to our San Jose Almaden office manager. The average sales price so far for January in Almaden is $1,216,000, which is 4 percent higher than January 2016 ($1,169,000).  Blossom Valley’s average sales price is up 9 percent to $695,000 in January 2017 compared to $633,000 in January 2016.  Santa Teresa had the largest increase of average sales price in January.  It is currently $829,000, which is 23 percent higher than the $674,000 average sales price recorded a year earlier.  Cambrian was down with an average sales price of $883,000 from $1,024,000 in January 2016 ( -14 percent).  The luxury market — homes priced over $3.5 million — is steady but somewhat flat with days on market and inventory creeping up; frenzy bidding and/or multiple offers is the exception as opposed to the rule, shared our Los Gatos manager.

South County – Listings are down and sales have been slow and flat since the beginning of December in South County. The holiday season, coupled with the election and economic uncertainty that goes along with it, and the perception that mortgage interest rates are on the rise, has caused sellers and buyers to postpone or delay their real estate decisions. “The old saying that the real estate market doesn’t hit its stride until after the Super Bowl seems to ring true this year,” says our Gilroy & Morgan Hill manager. The office had 7 open houses and 10 properties under contract.

Market Watch is a bi-weekly column exploring the Northern California housing market. Click here to view past issues.