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.
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.
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.