The Real Deal
Affording a home becoming less likely
Every month the California Association of Realtors (C.A.R.) measures the percentage of households that can afford to purchase the median-priced home in California. In July, that number dropped to its lowest point. Only 31 percent of the population can afford the average-priced home in the state. Nationwide, the affordability index was 51 percent in July, down 4 percent from last year.
According to C.A.R., the index is the most fundamental measure of housing well-being in the state. By tracking this number month-to-month, the association determines what, if any, measures should be taken to improve the housing situation.
San Francisco, once again, came in as the least affordable county in the state with only 12 percent of households able to afford city life. Contra Costa and San Mateo were not far behind with a 13 percent rating. Santa Clara County came in at 16 percent for the month of July.
Southern California fares a little better with numbers ranging from 23 percent in San Diego to 30 percent in Ventura. The only area to realize an above-average affordability was the high desert country. With 69 percent of households able to afford to live there, perhaps the next big move will be to cactus country.
In addition to the housing affordability study, C.A.R. released the second quarter statistics on the median home price. Statewide the average home price rose to $240,760 for April-June, representing the highest median price on record. Santa Clara County rose 38.9 percent from second quarter 1999 to bring the median price to $558,920.
Similar to reports recorded over the past year, the 10 cities and communities with the highest median homes prices in California were all in Northern California with one exception, Malibu. The cities ranked in the following order: Atherton, $3,375,000; Los Altos Hills, $2,462,500; Hillsborough, $2,010,500; Monte Sereno, $1,725,000; Belvedere/Tiburon, $1,451,000; Woodside, $1,437,500; Saratoga, $1,300,000; Los Altos, $1,287,500; Malibu, $860,000; and Palo Alto, $829,000.
One interesting statistic posted for July is the number of sales recorded in relation to the median home price. Sales of existing homes decreased almost 15 percent during July while the median home price rose 10.3 percent for the same period.
According to C.A.R. President Richard F. Gaylord, "There are plenty of buyers out looking, but the number of homes for sale remains low, so this is continuing to drive prices higher." Low inventory plus high demand means rising prices.
Most homes sold within 30 days of being put on the market which was a decrease of seven days for the same period last year. Homes in highly desirable neighborhoods, or in good school districts, tend to sell faster than the one-month average.
Information in this column is presented by the Silicon Valley Association of Realtors. Email questions to: ppompei@siliconvalleyrealtors.org.
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Los Gatos, California Since 1881
