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CA 4Q08 Affordability Index Jumps

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March 31st, 2009 by Phil Levy

 

According to the CA Association of Realtors (CAR) the California First Time Homeowner Affordability index climbed 26 percentage points to 59% between 4Q07 and 4Q08.  It also jumped 6 percentage points from the 3Q08.  This means that more than 1/2 of California households are able to buy a home priced no more than 85% of the median price in their locales.  For Los Angeles County the affordability index climbed 19 percentage points year over year to 46% as of 4Q08.  It also climbed 4 percentage points from 42% since the 3Q08.

Affordability is the highest its been since before 2003.  These statistics are quite compelling particularly to first time home buyers since they combine the factors of median prices, existing mortgage rates and current income levels.  

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Sales and Affordability Jump

Categories: Uncategorized
February 16th, 2009 by Phil Levy

The California Association of Realtors quarterly affordability index jumped 20 percentage points from 33% to 53% between 4Q 2007 and 3Q 2008.  For Los Angeles County it increased by 15 percentage points from 27% to 42%.  In general the “affordability index” is percentage of households whose income is less than or equal to 40% of the PITI based upon a 90% loan at 85% of the current median price of homes sold in a particular area.  Here you can find the exact affordability index methodology used by the California Association of Realtors.

The December 2008 market statistics for the Santa Clarita Valley were recently published by the Southland Association of Realtors. Closed sales transactions for all of 2008 increased by 10% and for the month they increased by 68% (year over year). Current inventory was only 4.8 months normally indicating a tight supply – but many of these homes offered for sale were distressed properties (i. e. short sales or bank owned). Median prices of closed sales for December 2008 were $385,000 (down 27%) for single family homes and $225,000 for condominiums (down 35%).

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