Posted on 01/08/2005 8:18:52 PM PST by Citizen James
California is now home to the 11 least-affordable housing markets in the entire nation, according to a new report, the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
"It used to be that California dominated the 'bottom 10' list of least-affordable metropolitan areas. Now we are the bottom 10 -- and then some," said Robert Rivinius, chief executive officer of the California Building Industry Association. "What's worse is that even in California's most affordable market -- Tulare County -- less than half of the county's residents can afford a median-priced home."
The index found that during the third quarter of 2004, 19 of the bottom 25 housing markets nationally were in California. And of the 43 least affordable markets in the nation, more than half -- 25 -- were in California.
The least-affordable market out of 162 metropolitan areas nationwide was Santa Barbara County, where a family earning the median income could afford only 4.9 percent of area homes. The next four least-affordable areas were San Diego County, Monterey County, Los Angeles County, and Orange County.
In comparison, the NAHB survey found that in the nation's most affordable market, Lima, Ohio, 90.5 percent of homes sold during the third quarter of 2004 were affordable to families earning the area's median income.
The median price for a home in Santa Barbara County in November 2004 was $668,750, according to the California Association of Realtors. At the same time, the median priced home in Lima, Ohio, was $66,722.
Among larger metro areas nationwide, the most affordable were Grand Rapids, Mich., where 86 percent of the homes were considered affordable, and St. Louis, Mo., where the affordability rate was 83.7 percent, the report said.
The Housing Opportunity Index calculates the share of homes sold in an area that would have been affordable to a family earning the median income. For income, NAHB uses the annual median family income estimates for metropolitan areas published by the Department of Housing and Urban Development. NAHB assumes that a family can afford to spend 28 percent of its gross income on housing, a conventional assumption in the lending industry. That share of median income is then divided by 12 to arrive at a monthly figure. On the cost side, the monthly principal and interest is based on a 30-year fixed-rate mortgage with a 10 percent down payment. The interest rate is a weighted average of fixed and adjustable rates during that quarter. The cost also includes estimated property taxes and property insurance.
You need to write a book. Is there anything you do not know? Anything? :-)
Properties like that are being purchased by a GROUP of people. Most are being grabbed with the hope of "flipping" the property in 2 years to yield new equity for future investment. In some cases, the property values are accelerating so quickly that the tax penalty for selling before the 2 year point is worth taking the hit.
My son sells real estate in San Diego. He sees this behavior every day. Some buyers are exchanging inflated equity in an existing California property to "buy up".
After living in So California for 26 years we moved to Tennessee. It is the climate from hades. It is always hot and wet or cold and wet or just plain WET WET WET.
Nothing wrong with a mobile home or Jim Walter style inexpensive prefab if that is what someone can afford.
I have seen some decent mobile home parks...especially in Florida for retirees on a budget.
Nashville is high for the South but a bargain compared to the Kali coast. I did not see it on the list but 700K to 1M still buys a McMansion here.
But there are a slew of multi-million dollar homes popping up all over the place or very fancy built homes asking 400-500 per foot.
Beats me.
Angry are we? Bet you live in one of those places that have those nasty flying bugs as big as sparrows and cows flying over the barn in twisters. Cheer up, maybe when the wind dies down, your house will land back on the same spot.
It is pretty disgusting to see what kind of house I could've gotten for the same price in a state where the cost of living is much lower. Perhaps the investment will pay off someday...
Those new homes are all that is being built here on Long Island. No matter single family style homes. Big tremendou cape cod style, ranch whatever they call it.. the types that only two income with three jobs a piece families can afford OR OR OR OR a lot of illegal immigrants piling money together to afford the $700K.
I know, it can rain there for weeks on end. I have a co-worker that was raised there, and move to Cal about 25 years ago. He's told us about it.
You need a king's ransom to afford a family home today in California. I'm inheriting mine from my parents; I couldn't afford to go out and buy my own where I live these days since renting is cheaper than buying your first home that costs more than a palatial mansion.
Yep. I believe a house like that would have been a cool $50,000 in the 70s. Talk about an overheated real estate market.
I assume you've inherited yours right?
Amazing!! We are building homes on a golf courses in So. Oregon for less than that. For a little while longer anyway. Lot prices have gone ballistic and are hard to find because of all the Californians fleeing places like THAT for gorgeous homes for less money. WHO is buying those??
Worth $15,000 maybe in the 60s. This is getting ridiculous.
Yes it belongs to my mother and I. No mortgage (THANK GOD).
What's property tax on a million dollar home there dear?
Here in Nashville I pay 5000/year on a home valued at 460K. Course, public schools here suck so one peels off 7-10K/year for that per spawn if possible.
3400 sq ft in one of the top Nashville proper zipcodes bordering Belle Meade, the nation's fifth wealthiest town (of those with a pop of over 1000.)
I feel blessed. Course, I could buy the same home in Little Rock or Louisville for half the money.
Man...wish I was a neighborhood developer in SoKali...lol...actually it's not funny. How do regular young folks stay there? Or can they?
You can have the house in Tucson insulated so you can cut down on the need to run the A/C. On the other hand, the heat's dry so unlike in the Southern U.S, summers are bearable. I like my heat bone dry. :)
I lived in Manhattan hon....and I knew people....and DeMeo and his crew were extraordinary...to put it politely.
They made the Westies appear civilized.
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