Affordability Breakdown
The most obvious sign of a bubble in California is the affordability issue. The CAR web site has a breakdown of who can't afford what. "California households, with a median household income of $53,540, are $60,380 short of the $113,920 qualifying income needed to purchase a median-priced home at $488,600 in California, according to the California Association of Realtors."
That's $60,000 each and every year! "The San Francisco Bay Area had the highest gap in the state at $92,930, where potential homebuyers had a median household income of $67,770 but needed qualifying income of $160,700 to purchase a median-priced home at $689,240."
Here is CAR's annual income shortfall by area. Note the state average is about the same as southern Cal.
California ($60,380)
California - Condos ($36,990)
Central Valley ($32,660)
S. Francisco Bay Area ($92,930)
Southern California ($59,320)
13 Comments:
For those below qualifying income will have to settle for condo/townhome which is generally cheaper than single home dwelling.
And for those who can't afford at all will continue to rent.
If they can't afford to rent on their own, they will have to share with roommate(s).
There are many homes in Montery Park/Alhambra/Rosemead where multiple family are sharing. Only way to afford homes in those areas is to subsidize by renting part of the home out.
Nice troll...
85-90% of the population is having to settle for less than median SFH is a sure fire recipe for a robust economy.
What troll? It's a fact if you've ever tried to live in such an area--at least over the short term. I know several people who doing this.
(Not the same anonymous)
Who is this nut who sees trolls all over the place? I've seen so many accusations in such a short period of time!
Affordability and incomes are soooo 1990... This is the new economy, nobody needs jobs or income anymore, just "buy" a house and see your worth quadruple in 5 years.
I agree with the above that you have to be a little creative to get by financially in California. My fiancee and I subleased our couch for awhile...
Still, having your yearly income fall short of being able to afford a house by the rough equivalent of an entire additional wage earner is pretty ridiculous.
goleta
Just curious, do you live in high risk area for mudslides?
Anon complimenting the troll.
I stand by my compliment of the troll. It sounds like a tired old long-time owner in an expensive market. I just hope he/she saved up enough for his kids to buy.
I live in Orange County, CA at the beach, Sunset Beach to be precise.
The rent is affordable but qualifying on a conservative mortgage product is not possible making over 100K.
"I stand by my compliment of the troll. It sounds like a tired old long-time owner in an expensive market. I just hope he/she saved up enough for his kids to buy.
...
The rent is affordable but qualifying on a conservative mortgage product is not possible making over 100K."
There is a supply-and-demand factor nevertheless. Even in the worst recession houses in prime areas are going to keep their position relative to cheaper areas. Sleep on the sofa situations have been going on for a long time in urban CA, pre-bubble or no bubble.
I've been reading this blog-site for several months. I've learned a lot, and especially enjoy postings by Deb, John and BKlawyer.
Now I am feeling personally affected by the bubble. Yesterday, the owner of the house we rent (myself and my partner) told us he wants to sell it. He's asked us before if we'd like to buy it, but houses in our neighborhood have asking prices of up to 700K. that seems steep for a 2 bed 1 bath 80 year old house.
He won't put it on the market right away, and actually we have a lease through September.
I was feeling sad on the way home from work today, but then it occured to me that, well, maybe he won't be able to find a buyer by the end of this summer. Then he would be happy to have good tenants like us.
Anyone dare to venture a guess what the San Diego housing market might look like by September?
Anyone dare to venture a guess what the San Diego housing market might look like by September?
No way to tell, and anyone who says they know is just kidding themselves. The problem with bubbles is they tend to go on longer than anyone expects...look how long it took the NASDAQ bubble to finally pop. This thing could pop next week, next year, or even longer.
I'm definitely not saying I know. Cause I don't. But I'll venture a guess nonetheless.
In September, year over year price changes will be virtually flat, give or take a few percents. Resales volume will be low. New home sale volume will still be decent. You'll see more "for rent" signs than now.
May be the mood will be different too. More cautious buyers, less confidence in the economy.
if you want san diego sales info, try sandicor.com.
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