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Affordability of Median-priced homes UP

November 17, 2011

C.A.R. releases Q3 Housing Affordability Index

For release:
November 10, 2011

LOS ANGELES (Nov. 10) – Lower home prices and record-low interest rates in the third quarter of 2011 contributed to an improvement in housing affordability for California home buyers, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California rose to 52 percent in the third quarter of 2011, up from 51 percent in second-quarter 2011 and was up from 46 percent in the third quarter of 2010, according to C.A.R.’s Traditional Housing Affordability Index (HAI).

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

“While housing affordability has improved in most areas of the state, would-be buyers, especially first-timers, are having difficulty getting loans,” said C.A.R. President Beth L. Peerce. “When affordability is high, first-time buyers typically make up a large share of the market, such as in the mid-90s, when first-timers made up half of the market. First-timers have made up just a third of the market this year, illustrating the hurdles many home buyers are experiencing in qualifying for a home loan.”

Home buyers needed to earn a minimum annual income of $61,530 to qualify for the purchase of a $292,120 statewide median-priced, existing single-family home in the third quarter of 2011. The monthly payment, including taxes and insurance, would be $1,540, assuming a 20 percent down payment and an effective composite interest rate of 4.63 percent. The effective composite interest rate in second-quarter 2011 was 4.85 percent and 4.78 percent in the third quarter of 2010.

Regionally, housing affordability rose in most counties in the San Francisco Bay Area but was down in Los Angeles County and Fresno County. At 77 percent, San Bernardino County was the most affordable, while San Mateo County was the least affordable, with only 25 percent of households able to purchase the county’s median-priced home.

Visit http://www.car.org/marketdata/data/haitraditional/ to see C.A.R.’s historical housing affordability data. For first-time buyer housing affordability data, visit http://www.car.org/marketdata/data/ftbhai/.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

C.A.R. Region/County 3rd Qtr
2011 2nd Qtr 2011 3rd Qtr 2010
California single-family existing 52 51 46 r
California condo/townhome 62 60 57 r
Los Angeles Metropolitan Area 53 52 49
Inland Empire 69 69 66 r
San Francisco Bay Area 38 35 31 r
United States 67 67 64

San Francisco Bay Area
Alameda 36 35 31 r
Contra-Costa (Central County) 27 26 21
Marin 25 24 23 r
Napa 48 47 41
San Francisco 26 24 22
San Mateo 29 22 21
Santa Clara 34 32 30
Solano 75 75 71
Sonoma 46 46 40 r
Southern California
Los Angeles 42 46 38 r
Orange County 33 31 28 r
Riverside County 65 64 61 r
San Bernardino 77 77 74 r
San Diego 42 41 38 r
Ventura 45 41 40
Central Coast
Monterey 56 56 56 r
San Luis Obispo 40 37 36 r
Santa Barbara 37 35 26 r
Santa Cruz 32 32 28
Central Valley
Fresno 69 70 65 r
Kings County 76 72 64
Madera 74 72 68
Merced 74 76 75 r
Placer County 64 64 60
Sacramento 72 72 68
Tulare 73 73 68

r = revised

* Los Angeles Metropolitan Area is a five-county region that includes Los Angeles County, Orange County, Riverside County, San Bernardino County, and Ventura County
** Inland Empire includes Riverside County and San Bernardino County
***S.F. Bay Area has been redefined to include the following counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

C.A.R. Region Housing
Arrordability
Index Median Home Price Monthly
Payment
Including
PITI Minimum
Qualifying
Income
California single-family existing 52 $292,120 $1,540 $61,530
California condo/townhome 62 $228,810 $1,200 $48,190
Los Angeles Metropolitan Area 53 $275,950 $1,450 $58,120
Inland Empire 69 $172,090 $910 $36,250
San Francisco Bay Area 38 $491,920 $2,590 $103,610
United States 67 $169,500 $890 $35,700

San Francisco Bay Area
Alameda 36 $463,030 $2,440 $97,520
Contra-Costa (Central County) 27 $610,970 $3,220 $128,680
Marin 25 $786,320 $4,140 $165,620
Napa 48 $340,150 $1,790 $71,640
San Francisco 26 $632,580 $3,330 $133,230
San Mateo 29 $703,000 $3,700 $148,070
Santa Clara 34 $587,500 $3,090 $123,740
Solano 75 $192,350 $1,010 $40,510
Sonoma 46 $342,230 $1,800 $72,080
Southern California
Los Angeles 42 $324,830 $1,710 $68,420
Orange County 33 $520,310 $2,740 $109,590
Riverside County 65 $200,970 $1,060 $42,330
San Bernardino 77 $133,290 $700 $28,070
San Diego 42 $369,800 $1,950 $77,890
Ventura 45 $420,400 $2,210 $88,540
Central Coast
Monterey 56 $265,000 $1,400 $55,810
San Luis Obispo 40 $357,710 $1,880 $75,340
Santa Barbara 37 $398,180 $2,100 $83,860
Santa Cruz 32 $490,000 $2,580 $103,200
Central Valley
Fresno 69 $142,690 $750 $30,050
Kings County 76 $130,530 $690 $27,490
Madera 74 $120,830 $640 $25,450
Merced 74 $120,210 $630 $25,320
Placer County 64 $264,980 $1,400 $55,810
Sacramento 72 $166,580 $880 $35,090
Tulare 73 $120,170 $630 $25,310

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