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California Housing Affordability Increases in First Quarter
Housing affordability in California increased overall in the first quarter of 2010, but 13 of the state’s 28 metropolitan areas included in the report saw decreases.
On a statewide basis, the HOI found that a family earning the median-income could have afforded 60.8 percent of the new and existing homes that were sold during the first quarter, up from 56.4 percent in the fourth quarter of 2009. The report also found that California is now home to seven of the top 10 least affordable markets in the nation.
CBIA President and CEO Liz Snow called the report encouraging for prospective buyers, but she cautioned that more must be done to make housing in California more affordable in the future.
“This is good news for homebuyers eager to take advantage of the recently enacted state tax credits and should encourage more people to enter the market to take advantage of low prices and interest rates,” said Snow. “Recent reports keep showing that most areas in California are seeing price increases, so we don’t expect these affordability levels to last as the housing market continues to stabilize.”
Snow noted that California has been notorious for high-priced homes that keep a number of people priced out of the market.
“The fact that California is still home to over half of the top 20 least affordable markets in the nation sends a clear message that we must look at the barriers to providing housing for California families and come up with ways to better meet the demand,” said Snow. “There has been a significant imbalance in supply and demand for a number of years, which has lead to the huge price increases that we’ve seen in the past.
"In order to avoid this scenario, we must take advantage of this opportunity to work with lawmakers on sound policy that reduces some of the barriers to building homes, as well as policy that provides a dedicated source of revenue for the development of affordable housing, so that we can keep prices more affordable in the long run and help more families attain the dream of home ownership.”
San Francisco, San Mateo and Marin counties once again claimed the distinction of California’s least-affordable metro area, and second in the nation, with just 23.4 percent of the homes sold being affordable to a family earning the median income, up from 22.3 percent in the fourth quarter of 2009. San Luis Obispo County came in third (32.4 percent), followed by Ocean City, N.J. and Santa Cruz County (tied with 34.1 percent). The New York City metro area continued to hold the title of the nation’s least affordable market for the eighth quarter in a row (20.9 percent).
Merced County overtook Stanislaus County for the title of California’s most affordable market with 82.4 percent affordability, down from 83.4 percent in the fourth quarter. Stanislaus County and Yuba and Sutter counties were the second and third most-affordable metro areas in California with 81.5 percent and 79.6 percent affordability, respectively.
Nationwide, 72.2 percent of new and existing homes sold in the first quarter were affordable to families earning the national median income, up slightly from 70.8 percent in the fourth quarter of 2009. Bay City, Mich. was the nation’s most-affordable housing market with an affordability ranking of 98.7 percent, followed by Kokomo, Ind., with a ranking of 98.1 percent.