DISASTER: Bay Area now twice as affordable – 18% -> 32%
Twice as many in state can now afford a home
A pair of reports released Tuesday highlighted the upside of the real estate downturn: Housing is becoming more affordable for more people across California and the Bay Area.The percentage of households able to buy an entry-level residence in the state reached 48 percent during the second quarter, double the level from a year ago, according to the California Association of Realtors.
The trade group defines a starter home as one priced at 85 percent of an area’s median, which works out to $329,120 for the state. The minimum income needed to purchase such a property is $62,870, down from $101,440 a year ago (assuming an adjustable-rate mortgage starting at 5.69 percent and a 10 percent down payment).
The Bay Area remains the least affordable part of the state, but 32 percent of its households can now afford a first home, up from 18 percent during the second quarter of 2007, the report said.
The minimum income required to purchase an entry-level home, estimated at $582,130, is $111,210.
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The National Association of Home Builders/Wells Fargo Housing Opportunity Index, also released Tuesday, found that homes became more affordable in 25 of 28 California metropolitan regions during the second quarter. The New York City region took the lead as the least affordable place in the nation, knocking the area comprising San Francisco, San Mateo and Marin counties into a rare second-place spot.
F***! S***!
Just last week we were in the lead. Now, New York with its lack of culture, smart people, tourist attractions, and good food has knocked out Cupertino, Mountain View, and Palo Alto. WTF!!!!!
Does any family seriously not make $111,210? I mean… seriously. A 1 bus driver or 1 cop family easily reaches $100k – throw in some part time work and BOOM you’re at $120k.
How did this happen? What will it take for us to reduce affordability to 9%. 32%! Good grief! Now any family can buy a home here. All you need is 1 cop, 1 bus driver, or 2 teachers and you can afford a starter home.
If this isn’t a freakin’ disaster, I don’t know what is.
I guess on the upside, house prices should start to soar as thousands suddenly realize that housing is now affordable and swarm in.
Damn you New York. Damn you!
BTW, I love the first comment in that article:
What is CAR smoking, how can someone with a $62,870 per year income afford a $329,120? Give up food? Only wear loincloths? By my calculation you would need a minimum of $109,707. Then again I shouldn’t expect a bunch of realtors to understand that people need to make enough money to actually save some and not just count on their houses increasing in value so they can use them like an ATM. Car broke down? No problem, buy a new one with home equity! Want granite counter top? No problem, finance it with home equity! Buy, buy, buy, you can always refinance later. What a load of crap.
Can you say “whiner”? Someone clearly doesn’t understand that when you get a home loan, you get richer.
August 20th, 2008 at 11:58 am
Our neighborhoods are clearly in danger of being invaded by cops, bus drivers and teachers. No more hiding after you’re done backing up your car over that small baby. Your neighbors will rush with shackles, sermons and dunce caps.
Oh well it could be worse: plumbers, carpenters and tree maintenance folks would probably cut you to pieces.
August 20th, 2008 at 12:13 pm
Wow, you’ve really outdone yourself this time burbed!
Now take a deep breath. Ahhhhhhhhhhh, calm….
August 20th, 2008 at 12:52 pm
I nominate this article for BEST OF BURBED.
Bus drivers and teachers and cops, oh my!
August 20th, 2008 at 1:06 pm
Don’t worry, this is the Bay Area at large, not the RBA, you can be certain that RBA cities will remain free of teachers, and cops, and firefighters!
They can stay in East Bay, and RBA residents will be safe from these people. Just in case though you can start a new grassroots, call it something like “Price the teachers out of Cupertino!”, “Residents for a Teacher Free Palo Alto!”.
August 20th, 2008 at 1:15 pm
Well, the lucky thing for the BA is that even though 30% is better than 9%, 30% still means that all those cops, teachers, and firemen still can’t afford because they don’t earn in the top 30% of the earning public. So you’re safe for now…
August 20th, 2008 at 1:17 pm
Right, after the witch hunts, KKK and McCarthyism, we all know whose turn it is to not belong.
No, I don’t mean civil servants. I mean… Engineers! Engineers, stay away from the RBA!
August 20th, 2008 at 1:25 pm
Well now some people might be able to pay for a house with just 1 income. This in turn will zap the productivity that Silicon Valley has enjoyed. It will bring back things to middle class households, like the “stay at home mom”. This will depress economic activity in the Bay Area, and potentially shut down the house from the other day, as day care might not be desired.
Recession might be just around the corner if this continues. Then the collapse of civilization, obviously.
August 20th, 2008 at 1:28 pm
Wow. I’m an economic terrorist. I had no idea.
MOO HOO HOO HOO HA HA HA!
August 20th, 2008 at 1:45 pm
madhaus,
Didn’t you know everytime you do something yourself that you could outsource you are helping the economy come to a halt.
Do you wash your own car? BAD, you need to spend $12 at the car wash, adding $12 to the GDP.
Do you cook your own food? HORRIBLE, you need to take your family out all the time, you are depleting the economy. GDP +$40-$100.
Don’t paint your house, have someone else do it. Don’t mow your lawn, don’t do your own taxes. Are you still deciding what furniture to buy, and what colors to paint your rooms? HIRE AN INTERIOR DESIGNER.
But your most horrible sin is raising your own children. The GDP is tanking because of that. You could be earning $50k, $60k, $120k easily, and paying some stranger $30k/yr or more to raise your children, adding both those salaries to the GDP, not to mention your commuting costs, but no, you add nothing to the economy.
Note just in case it is not coming off I’m being sarcastic.
August 20th, 2008 at 1:54 pm
cardinal2007 – Good heavens, and all this time I thought you weren’t sarcastic! You nearly had me there.
August 20th, 2008 at 1:56 pm
NY Rocks!
August 20th, 2008 at 1:58 pm
This in turn will zap the productivity that Silicon Valley has enjoyed.
Seriously. Think of the children. What kind of message will we be sending them.
How will we compete with China?
http://sports.espn.go.com/oly/summer08/news/story?id=3543618
August 20th, 2008 at 2:00 pm
At least we don’t have the Knicks.
August 20th, 2008 at 2:03 pm
Adult diapers, now why hasn’t Dilbert’s PHB thought of that yet
August 20th, 2008 at 2:08 pm
Speaking of diapers,
I was at Kragen Autoparts yesterday. They almost always have knick-knacks at the checkout counter. The latest thing was this sort of super-absorbent pad that you were supposed to pee into in case you got into trouble on a long road trip. WTF? Just pull over and go on the side of the road!
August 20th, 2008 at 2:13 pm
I know people who even go as far as to ground their own coffee instead of buying pre-ground. Of course that is already bad enough, Starbucks is already closing over 600 stores, and these geniuses are grinding their coffee!
The poor baristas.
Everytime you do something yourself you should think. Who am I going to have fired by doing this? That will stop you and put you on the right track.
As you start cooking dinner, think of the guy at Jack in the Box, or the In-n-Out, what will they do on the streets?! Are you really that selfish?
Okay, now do your patriotic duty, and spend! Oh, and if you can, overbid on a house.
August 20th, 2008 at 2:37 pm
cardinal2007 – You are making sense. I will now endeavor to pay someone every morning to grind my coffee while I watch and count to 13.
August 20th, 2008 at 2:56 pm
Just pull over and go on the side of the road!
Most of the roads here don’t have shoulders.
Actually, I was once very surprised at how I-95 (especially the NJ Turnpike) has so many rest stops.
August 20th, 2008 at 3:16 pm
I’ve got a better pee collector invention idea: 2 liter coke bottle. Just slap a label on it and call it the “auto urinal” or something. On second thought, that was my idea and I intend on making a social networking web 2.0 site around it and become filthy rich, so none of you had better steal the idea.
August 20th, 2008 at 3:42 pm
bob, I’m shocked at you! You live in the East Bay. When I worked in Hayward I used to count the pee-filled bottles strewn by the side of 880 all the time. The truck drivers have already figured that one out.
It’s quite a vile practice – especially when you toss ‘em out the window.
August 20th, 2008 at 3:55 pm
Clearly we need some green way of recycling those pee-filled bottles, preferably employing all those laid-off Starbucks barristas.
I also wash and fold laundry, keeping dry cleaners everywhere from achieving the American Dream. Also I figure I should have traded up at least twice more since buying this house 15 years ago, so that’s two big commissions we haven’t paid.
I wonder if I can find an avatar where I’m cooking while reading Karl Marx or something, as long as I can still fit the guitar in somewhere. I see it as greasy as the TV over the stove in the Palo Alto house thread.
MOO HOO HOO HOO HA HA HA!
August 20th, 2008 at 4:10 pm
I had a friend back home who worked in the summers for Tendot- the equivelant of Caltrans. She mentioned how unpleasant it was to pick up plastic gallon jugs full of urine in 90 degree heat.
You know, perhaps a better idea would be to have a rubber hose that you could pee in that would drain to a tank under the car or something. Of course the possibilities for creating a big mess is a problem.
I’ve just always done the old fashioned thing and pulled over. I’ve only done it once out here and it was scary with tractor trailers wizzing by at 75MPH.
August 20th, 2008 at 4:40 pm
bob: I’ve just always done the old fashioned thing and pulled over. I’ve only done it once out here and it was scary with tractor trailers wizzing by at 75MPH.
Wizzing by. **snicker** I’m thinking of that post about that trashed SF house from calla (I think) who kept going on and on about it being full of ka and wee.
August 20th, 2008 at 4:43 pm
Burbed, you’re missing the point.
“In July, sales in the nine-county Bay Area posted their first annual gain since early 2005″
THE BOTTOM HAS BEEN HIT!
Everyone can afford houses now. People are buying. The bubble has burst.
August 20th, 2008 at 4:51 pm
Brian -
If we’re bouncing off the bottom, it means the bubble still exists. If the bubble had burst, we’d have crashed through. So go the laws of physics.
Try this at home with a rubber ball from Target if you don’t believe me…
August 20th, 2008 at 5:19 pm
http://www.boingboing.net/2008/07/15/portable-cardboard-t.html
Perhaps this could solve the pee problem?
August 20th, 2008 at 6:55 pm
I was at Kragen Autoparts yesterday. They almost always have knick-knacks at the checkout counter. The latest thing was this sort of super-absorbent pad that you were supposed to pee into in case you got into trouble on a long road trip.
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Not everyone has time to do so. I think the idea came from Lisa Nowak’s Astro Diaper to drive 900 miles non-stop.
August 20th, 2008 at 7:04 pm
If this isn’t a freakin’ disaster, I don’t know what is.
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I don’t understand Burbed’s point. Home price appreciation is 15% in RBA. It really does not matter what your income is. Where is this stupid salary/income factor coming from? You buy with zero down, and before rate resets you either sale or refinance. 15%, OK? 15%. That’s all it matters. Not salary or income.
August 20th, 2008 at 8:28 pm
Burbed: serenity now!
August 20th, 2008 at 9:43 pm
Still not normal, but getting there: The condo I sold in 2002 for a ridiculously overinflated price nearly three times what I paid, has now fallen to within $25K of what it was when I sold it, and is plummeting about $10K a month, according to Zillow. In a year or so, it should be where it was when I bought it (140K in 1994, and I would never conceive of living there again if you gave it to me). The fool who “bought” it must surely be underwater by now, since she needed to rent it for at least $1800 a month then, and probably borrowed against it when it rose to $502K in 2005. I still cannot believe she paid me what she did (and I laughed all the way to the bank with no regrets at not having held onto it longer). I love watching prices plunge. Way, way, way overvalued, beyond reason for years. Depression 2.0 is coming, just watch. Your “home” won’t save you. Happy foreclosure, fools!–Cheers from a very happy renter and cash-heavy, ZERO DEBT smart person.
August 20th, 2008 at 10:16 pm
Drink the housing bubble kool aid if you must, but never, never drink the “Roadside Lemonade.”
August 21st, 2008 at 7:39 am
Thank you for the morning chuckle, Becky.
August 21st, 2008 at 8:07 am
Depression 2.0 is coming, just watch. Your “home” won’t save you. Happy foreclosure, fools!–Cheers from a very happy renter and cash-heavy, ZERO DEBT smart person.
I’m reading a book about the original depression ( depression 1.0) and its pretty crazy how similar in many ways the triggers that caused that depression are to some of those working their way through the system now.Basically, everyone-housewives,shoe salesmen, and teachers- were buying loads of stocks ( just like people were buying houses in the housing bubble) and then suddenly the bottom fell out, which in turn caused banks to fail, credit to dry up, and demand for goods and services to fall.
The cause of both bubble failures, both this one and the one in the 20′s was caused by uneducated masses of people making financially unwise decisions and subsequently bringing down the system with it.
While we have lots of safeguards in place now to hopefully prevent such an outcome, the next shoe to fall is credit card debt, which is apparently the biggest its ever been. If the general public loses the ability to buy with credit, then the system will fail.
August 21st, 2008 at 4:53 pm
If the general public loses the ability to buy with credit, then the system will fail.
GEE, ISN’T EASY CREDIT (TO WAY TOO MANY IDIOTS) WHAT GOT (some of) U.S. INTO THIS MESS?
Since when is a house an ATM? Where is it printed in one’s loan documents that a return on “debt” should be guaranteed? Folks buy cars all the time, and THEY do not appreciate, and they cost thousands of “debt” dollars (for those too dumb to save and pay cash). Folks, if you’re in debt trouble, you get what you deserve. I have zero sympathy for any of you.