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The Real Deal
Low rates help offset high price of homes
By Jean Newton
Not all people can afford to obtain the American Dream of owning their own home, but at least the affordability index continues to remain steady. The percentage of households in California able to afford a median-priced home was unchanged in April, compared to a year ago, according to the most recent report released by the California Association of Realtors.
The April 2001 housing affordability index stood at 32 percent, unchanged from April 2000, according to the California Association of Realtors. The index also was unchanged compared to March 2001. February 2001 marked the first improvement in year-to-year affordability in 23 months, when the index rose by 1 percentage point to 35 percent compared to February 2000.
"Affordability has stabilized over the past several months after declining for nearly two years, in part because of lower mortgage interest rates, compared to a year ago," said California Association of Realtors President Gary Thomas. "But the effects of lower rates are being offset by continued increases in the median price of a home in California."
The median price of an existing, single-family detached home in the San Francisco Bay Area during April, rose to $483,850, a 3.1 percent increase over the $469,250 median for April 2000, the California Association of Realtors reported. The median price of an existing, single-family detached home in Santa Clara County during April, fell to $530,000, a 5.4 percent decrease from the $560,000 median for April 2000.
The California Association of Realtors' monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. The association also reports housing affordability indexes for regions and selected counties within the state. The index is the most fundamental measure of housing well-being in the state.
At 10 percent, San Francisco remained the least affordable county in the state, followed by Santa Cruz at 12 percent, Contra Costa at 13 percent and Marin at 14 percent. For the San Francisco Bay Area, affordability was 19 percent.
In Southern California, San Diego and Orange counties were the least affordable at 24 percent, followed by Ventura County at 35 percent. In Los Angeles County, affordability was 37 percent. With housing affordability at 65 percent, the High Desert remains the most affordable region in the state.
In Santa Clara County, 22 percent could afford to own a home, compared to the state of California where 32 percent can afford a home. Nationwide the affordability percentage was 56 percent.
The California Association of Realtors' regional housing information is compiled from Multiple Listing Services data, representing the most current indicator of the home-resale dynamic in the San Francisco Bay Area Region and Santa Clara County. Previous affordability indexes also are archived on the California Association of Realtors' website devoted to the state's housing affordability crisis at www.car.org/affordability.
Additional information about local housing prices and other statistics and demographics can be found at the Silicon Valley Association of Realtors website at www.siliconvalley-realtors.org.
Although the housing market is opening up slightly to new buyers, sadly the American Dream will remain a dream for many wishing to own their own home.
Silicon Valley Association of Realtors. Send questions on any topic to: Real Deal, c/o SILVAR, 345 San Antonio Road, Los Altos, CA 94022; call 650-949-9115; or email to ppompei@siliconvalley-realtors.org.
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Saratoga, California Since 1955
