Affordability rises in California
Real estate brief
By Inman News, Thursday, November 20, 2008.A growing number of households were able to afford an entry-level home in California in the third quarter, as recent declines in home prices and mortgage rates have brought housing into better alignment with incomes.
According to the California Association of Realtors, 53 percent of households statewide earned the minimum household income needed ($56,100) to purchase an entry-level California home at $287,760 in the third quarter, based on an adjustable interest rate of 5.91 percent and assuming a 10 percent down payment. The monthly payment including taxes and insurance was $1,870 for the third quarter.
A year ago, only 24 percent of households could afford such a purchase, when households needed $100,500 to qualify for a loan on an entry-level home.
The High Desert region was the most affordable area in the state, with 73 percent of households able to buy an entry-level home, followed by Sacramento County at 71 percent.
The San Francisco Bay Area region was the least affordable in the state at 35 percent, followed by the San Luis Obispo County region at 38 percent.
| Housing Affordability Index | Entry-Level Price | Monthly Payment Including Taxes & Insurance | Minimum Qualifying Income | |
| California | 53 | $287,760 | $1,870 | $56,100 |
| California - Condos | 57 | $260,070 | $1,690 | $50,700 |
| United States | 68 | $170,430 | $1,110 | $33,300 |
| C.A.R. REGION | ||||
| Central Valley | n.a. | n.a. | n.a. | n.a. |
| High Desert | 73 | $143,900 | $930 | $27,900 |
| Los Angeles County | 42 | $332,680 | $2,160 | $64,800 |
| Monterey Region | 51 | $313,510 | $2,040 | $61,200 |
| Northern California | 51 | $278,430 | $1,810 | $54,300 |
| Northern Wine Country | 49 | $327,850 | $2,130 | $63,900 |
| Orange County | 43 | $439,660 | $2,860 | $85,800 |
| Palm Sprgs/Lwr Desert | 59 | $187,270 | $1,220 | $36,600 |
| Riverside/SBernardino | 66 | $193,130 | $1,250 | $37,500 |
| Sacramento County | 71 | $180,170 | $1,170 | $35,100 |
| San Diego County | 51 | $320,710 | $2,080 | $62,400 |
| San Francisco Bay | 35 | $523,310 | $3,400 | $102,000 |
| San Luis Obispo County | 38 | $356,120 | $2,310 | $69,300 |
| Santa Barbara Area | 45 | $335,000 | $2,180 | $65,400 |
| Santa Clara County | 39 | $552,500 | $3,590 | $107,700 |
| Southern California | 52 | $289,650 | $1,880 | $56,400 |
| Ventura County | 50 | $392,310 | $2,550 | $76,500 |
| COUNTY | ||||
| Alameda | 39 | $445,860 | $2,900 | $86,860 |
| Contra Costa | 30 | $598,640 | $3,890 | $116,630 |
| Fresno | 65 | $161,240 | $1,050 | $31,410 |
| Marin | 24 | $805,050 | $5,230 | $156,840 |
| Merced | 75 | $120,200 | $780 | $23,420 |
| Riverside | 66 | $195,150 | $1,270 | $38,020 |
| San Bernardino | 68 | $178,470 | $1,160 | $34,770 |
| San Francisco | 26 | $645,050 | $4,190 | $125,670 |
| San Joaquin | n.a. | n.a. | n.a. | n.a. |
| San Mateo | 29 | $661,210 | $4,290 | $128,820 |
| Santa Cruz | 33 | $489,180 | $3,180 | $95,300 |
| Sonoma | 52 | $323,280 | $2,100 | $62,980 |
| Stanislaus | n.a. | n.a. | n.a. | n.a. |
***
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Submitted by Sean OToole on November 20, 2008 - 3:29pm.
This is great news, especially if you understand that people by homes based on affordability (payment) not price.
Mapping this to median incomes throughout the state will give you a clear road map to the areas that have finished correcting, and those that still have a ways to fall.
The return to affordability, while painful, will be looked back on as the best thing to happen to real estate in a long time. Hopefully we don't lose site of the importance of affordability ever again and work hard to ensure that area prices are supported by area incomes using traditional financing at reasonable rates.
Sean O'Toole
Founder / CEO
ForeclosureRadar.com
ForeclosureTruth.com
Submitted by Christy Leavine on January 18, 2009 - 4:41pm.
What is sad is that an entry level home will run you almost 300k, and even though people made at least the minimum amount, doesn't mean that they could afford to purchase a 300k home.
Are you interested in getting a california real estate license, I can help.