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Median-Priced Home Too Expensive For Most California Buyers

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

Higher home prices offset lower interest rates to reduce housing affordability in California during the fourth quarter of 2012, the California Association of Realtors reported Monday.

The percentage of home buyers who could afford a median-priced existing single-family home in California decreased to 48 percent at the end of 2012, down from 55 percent in the last quarter of 2011, according to CAR's Traditional Housing Affordability Index.

The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.49 percent, according to CAR. The effective composite interest rate in the third-quarter of 2012 was 3.72 percent vs. 4.3 percent in the fourth quarter of 2011. --City News Service

awakened February 26, 2013 at 08:07 AM
You gotta be either rich or just plain dumb to invest $ into a home in CA. It's not to 80's anymore. The good ol' days are gone in CA. Be smart invest wisely. CA has become to new Mexico. Littered streets....looking more and more like Mexico (A Toilet) . So sad, but yet, true. :( Let's not mid ourselves, this year Obama will be opening the flood gates. Or in his words will be worded as.... a much need immigration reform. Pfff.
Interloper February 26, 2013 at 03:37 PM
Just wait, with all the high paying jobs mr obama will create with his tax increases soon everyone will be able to buy a house. The question remains whether or not they will be able to make the monthly payments. A full time worker only needs to make about $ 10.44 an hour (after taxes, or course) to make the payment, this would not include ANY other monthly expenses. Just sayin'
Martha L. Bridges February 26, 2013 at 04:53 PM
Caution should be the watchword for anyone thinking about taking the plunge into real estate. What the article doesn't say it that the lending institutions and the cash based investers are manipulating the market. They have created a shortage of homes by holding foreslosure inventories off the market, and that and the very low home loan rates has created an artificial bubble which is bound to burst at some point down the road. Also, I large percentage of these foreclosed homes need more than just a facelift. Many of them are in need of major repairs or updating of expensive equipment - added expenses that buyers are not factoring into their financial planning.
One Voice February 26, 2013 at 06:08 PM
Well here is a first, but Martha I agree with you. I have two friends that have been trying to purchase homes for over a year now, both with well paying jobs, per-qualified with a more then substantial down. What is happening is that those selling the homes hold out for a cash offer and it blows everyone else out of the game. Another problem is the banks are buying up homes and then sitting on them until a cash offer comes through. The shortage is all due to the game that entities are playing with homes that could be on the market for prospective buyers therefore creating a housing shortage. My neighbor put her house for sale and had 15 offers within an hour, unbelievable.
Reverend Smith February 26, 2013 at 09:24 PM
The problem comes from bailing out the banks. If Dubya and Obama hadn't shoveled so much cash at the banks, they'd be desperate to sell houses and grant loans to qualified applicants. But the 'too big to fail' banks got their bailout so they can sit back and demand cash. Only ones with case are the same buy-em-and-sell-em house-flippers that drove the madness in the first place. What we're going to end up with is the opposite of the nation of homeowners presidents since Reagan have promised. We're going to see this massive surplus of houses bought up by speculators and landlords who'll turn them in to "income property" (rentals).
Arthur Spooner February 26, 2013 at 10:23 PM
I actually agree with you too Martha. People are purchasing these homes that have no lawn and are not putting in lawns because they are not affordable. They are still an eye sore for the rest of us to look at. I am sure there are many other items that need repair but these are the ones that I see with my eyes!
Arthur Spooner February 26, 2013 at 10:25 PM
Yep the likes of Moonbeam and his cronies are letting it happen much faster too.
Louison Bobet February 27, 2013 at 12:27 AM
Who's got 70k to put down anyway. Not many in my circle of friends. For most of us coming out of a bad economy, it's going to be years to come up with that kind of savings, and then what, you give it to the bank for your downpayment, and you have little to no savings left for yourself. Same ugly cycle as before. There has to be a better way.
LBV Collins February 27, 2013 at 05:09 AM
HI Martha. I agree that home buyers should use caution, and that there may be an artificial bubble afoot, but I think that the bubble will be tiny. I get the impression that the upward pressure in homes is due to the typical spring time home buying season effect, and we may see demand (and prices) ease a bit later in the year. According to CoreLogic, the shadow inventory continues to fall. They note there's only a seven month supply of homes. [1] And according to this fellow's chart, housing prices are in-line with where they should have been had we not had that disastrous bubble a few years ago. [2] 1. http://www.corelogic.com/about-us/news/corelogic-reports-shadow-inventory-continues-decline-in-october-2012.aspx 2. http://www.jparsons.net/housingbubble/
julian February 27, 2013 at 08:54 PM
If you can't afford it, then don't buy it. Seems so simple. I for one think prices are out of control in California, and will continue to be as long as people look at housing as an investment and speculate. There aren't enough high paying jobs to support such a market.
James Festini March 07, 2013 at 10:41 PM
It's 2005 all over again.

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