Special offer

California Affordability Index and Seller Financing

Real Estate Broker/Owner with Note Builders, Inc. Keller Williams

The data is in from the California Association of Realtors second quarter report on housing affordability. Housing affordability is the best it’s been in the San Diego area since the late 90’s. A family with a minimum income of $47,980 can afford an entry level home. With houses selling at reasonable prices relative to earnings, you would think that institutional lenders would be eager to lend. As we all know, that is not the case. Ridiculously restrictive lending criteria have prohibited buyers from stabilizing most markets and submarkets across the U.S.

Note Builders feels that the market is ripe for seller financing. With the implementation of Dodd Frank around the corner, this strategy is and will continue to become key in the facilitation of single family sales. New requirements placed on institutional lenders by being labeled “systemically important” and the stringent Qualified Residential Mortgage requirements will continue to make institutional financing more difficult and expensive to obtain. In addition to this, the Volcker rule (which limits risk and the owning of funds) will require banks to seek other sources of revenue to maintain profitability and shareholder value. This has already been seen by B of A’s $5 debit card fee. A few other banks are testing $3 fees as well.

All of this means that seller financing will again become the way to structure deals. Taking the banks out of the equation will benefit sellers, buyers, and markets! We look forward to continuing to facilitate that change.


Posted by
Terry Lewis COO
NMLS #517367 DRE#01898702

Keller Williams, Yes Team
Owner, broker #00686433
Cell: 858-699-3139
Fx: 858-345-3726