The California Association of Realtors has found their First-time Buyer Housing Affordability Index stood at 69% in the first quarter of 2009!! With a median price of an entry level home at $213,040 the average payment would be $1,270/month! You would need an annual income of $38,090 to afford this home.
Consider the 2nd quarter of 2007 when the affordability factor was at 26%! Median House price for entry level was $503,000, Monthly payment of $3,193.00/month with an annual income of $95,803!!
We've come a long way in pricing and are allowing SO MANY more buyers into the marketplace!! Here in Lovely Sonoma County we have 63% affordability for first timer homebuyers with median rice of $275,000 (you can get homes for a LOT LESS! We just sold a condo for $72,000!) With payments of $1,640 and an income of $49,260!! Big news. Now's the time to take advantage of decreased pricing, low interest rates and motivated Sellers!
Many lament the FHA loans we are making now predicting another wave of foreclosures in the near future. Let's remember this vital point--The monthly payment is almost 63% LESS than at the market peak!! This is much more SUSTAINABLE! Now if we can just get some inventory!
The June sales data shows the amount of REO's listing WAY DOWN! Here in Sonoma County the REO market represents just 9% of ALL ACTIVE listings BUT 35% of ALL SALES!! The Short-Sale market is markedly UP from 80 sales last month to 98--a historic high for OUR County, accounting for 21% of all sales in June. Still not much to hang your hat on but certainly being done! Oddly enough Short-Sales make up a whopping 42% of all of our 1059 Continue to Show listings! If you add the two numbers you see our market is still dominated by the "pre-forclosure" and "Foreclosure" markets with 56% of All sales being either REO or Short-Sales.
On the horizon-- the Alt "A" and "Option ARM" reset nightmare!! Is this just the beginning? Will Short-Sales begin to dominate the marketplace replacing the REO as THE hot-property as the banks hold onto their foreclosure inventory? Time will tell!