More Americans looking for affordability

Green Escrow | buyer regrets

One result of the pandemic has been U.S. workers leaving their jobs in record numbers. Common reasons cited included dissatisfaction with their employers, a desire to work from home permanently, greater work-life balance, and a new career. A full 33 percent of those leaving their jobs started their own business.

Meanwhile, a survey by Coldwell Banker found that 41 percent of Americans would accept a pay cut or a new job at a lower wage if it meant moving to a more affordable location with an even higher rate (46 percent) coming from the Northeast and West.

First-time home buying slightly more affordable in 2019

Green Escrow Services | woman home buyer

The California Association of Realtors reports that 48 percent of Californians could afford an entry-level home in 2019 as opped to 46 percent in 2018. A starter home in California was defined as $515,980 median price with a $2,660 monthly payment (including taxes and insurance). This would require a yearly income of close to $80,000 to qualify.

Nationwide, 71% first-timers could afford the $233,670 median home which comes to a $1,210 monthly payment and requires a $36,300 income.

Analysts attributed the slight improvement in affordability to lower mortgage rates and a strong economy which kept wages outpacing home prices.

California Housing Affordability Continues to Decline

Green Escrow | Real Estate

Same old story: low inventory continues to drive up housing prices as affordability naturally sinks.

In the nine county Bay Area, 23 percent of households could afford to purchase the median-priced $860,000 home. This would require an annual income of $173,5000 for a monthly mortgage of $4,340.

However, after five years, the San Francisco metropolitan area is not longer the least-affordable market in the country with Los Angeles now taking “top” honors.

Once Again With Feeling: Bay Area Home Prices Up, Sales Down

Green Escrow | Real Estate News

The latest monthly home sales and price report from the California Association of Realtors says that the median single-family home price in the Bay Area was $852,230, up 11.5 percent year over year while home sales dropped 14.2 percent from August and 4.2 percent year over year.

Once again, tight inventory is responsible for the rise in prices and the decline in sales.

Active listings continued to fall by more than 10 percent every month and declined by 11.2 percent in September.

Affordability in California Continues to Decline

Market News

According to the California Association of Realtors’ latest Housing Affordability Index approximately 29 percent of California residents currently could afford a median-priced $553,260 single-family home.

Moreover, rising prices and low inventory mean that buyers need to earn twice as much as they did five years ago to qualify for a mortgage.

San Francisco remains the least affordable market in California with only 12 percent of residents able to qualify for a mortgage.

More Listings to Come?

Green Escrow | Real Estate News

The National Association of Realtors’ quarterly Housing Opportunities and Market Experience survey reports that 71 percent of homeowners believe that now is good time to put a house on the market up from 61 percent in the second quarter of 2016. On the other hand, the reports shows that Americans are less confident in the economy and their personal financial outlook.

Housing affordability remains a big problem due to slow wage growth and rising home prices, especially in the more expensive areas of both coasts.

According to The Mercury News, the median price for a single-family home reached an all-time high in May at $818,000.

California Housing More Affordable – Slightly

Green Escrow | Real Estate News

Okay, the headline is a bit misleading as it refers to California statewide where 32 percent of residents can afford to purchase the median-priced $496,620 single-family home in the first quarter of 2017, an improvement of 1 percent over the last quarter of 2016.

However, according to the California Association of Realtors’ most recent housing affordability report nothing has changed in the Bay Area where only 25 percent of the nine county residents can afford the median-priced ($780,330) single-family home.

Currently, the average Bay Area household needs an annual income of $160,000 to manage the $4010 monthly mortgage payment.

As in the past, low inventory remains the primary obstacle to affordability in the Bay Area.

Bay Area Housing Inventory Increases Slightly

Market News

The California Association of Realtors reports that 420,100 single-family homes were sold in January, up 4.4 percent from January 2016. Analysts agreed that the the prospect of ever-increasing interest rates motivated many buyers to act.

Once again affordability reminds a problem in the Bay Area. In addition to higher mortgage rates, continued price appreciation without sufficient wage growth will push many would-be homebuyers to turn to inland, more affordable areas.

The good news is that more homes hit the market in the Bay Area in January with most counties now sporting a 2 to 2.5 month supply.

Bay Area Home Prices Keep Increasing

Real Estate Growth

The California Association of Realtors most recent monthly home sales and price report shows that the median sales price for a single-family home in the nine-county Bay Area was $775,820 in December, an increase of 6.3 percent year over year.

On the other hand, Bay Area sales volume decreased by 12.8 percent on an annual basis.

Analysts agree that 2017 will be challenging for home sales in the Bay Area given the ongoing low inventory, rising interest rates, high prices and continuing uncertainties over the upcoming political climate.

Affordability Nationwide and in the Bay Area

Green Escrow Services | American economy

ATTOM Data Solutions’ Q4 2016 Affordability Index calculates the percentage of wages that U.S. homeowners will pay baed on a 3 percent down payment and a 30-year fixed mortgage on a county-wide basis. These percentages are compared to heir historical norms to calcu\ate the affordability index.

By this measure home affordability declined to an eight-year low in the fourth quarter of 2016 as homeowners must spend 36.9 percent of their wages on mortgage payments. Nationwide, 29 percent of counties are less affordable than their historic norms.

Not surprisingly, in the Bay Area Alameda, Contra Costa, San Francisco and Sonoma counties are currently less affordable than their historic norms.

Many analysts see price appreciation and slow wage growth coupled with rising mortgage rates as indicators that the affordability index will not improve in 2017.