Inland: Incomes shrinking faster than median home prices Press-Enterprise
Just because home prices drop it doesn't necessarily mean that houses continue to become more affordable. Cheaper homes don't grow more affordable if incomes are shrinking faster.
That now seems to be the case in the Riverside-San Bernardino-Ontario metropolitan area, where the California Building Industry Association reports that in the second quarter of this year 72 percent of homes sold were affordable to median income households. By contrast median income households could afford 74.9 percent of homes sold in the first quarter.
So what happened? One clue may be that although the median sales price of a home dropped from $175,000 in the first quarter to $170,000 in the second quarter, the median income of Inland households shrank from $65,000 in 2010 to $62,500 in 2011.
Homes in Inland Southern California were even more affordable in the fourth quarter of 2010 when, according to the association, 76.8 percent of homes were within the financial reach of median income households.
Southern California Home Sales and Prices Tumble in October
November 16, 2011 (Chris Moore)
Monthly sales of new and existing homes in Southern California continued to decline in October while home prices tumbled back to last January’s levels according to real estate information provider DataQuick.
Sales in the Southern California region, which includes Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, totaled 16,829 new and re-sale homes in October. That was down 7.3 percent from the 18,149 homes sold in September and 29.3 percent below the October historical average of 23,819 sold homes. Sales were only 0.5 percent higher than October of last year when 16,744 homes were sold.
Sales typically fall 0.7 percent from September to October and have varied from a low of 12,913 in 2007 to a high of 37,672 in 2003.
New home sales were at their lowest level on record for an October, falling 18.4 percent below last years levels, while sales of existing single-family homes were 2.2 percent higher and existing condos were 1.3 percent higher than in October of last year.
In the first month following the reduction in the loan limits, the share of homes sold over $500,000 dropped to 17.4 percent of all homes sold, down from 20.4 in September and 20.8 percent a year earlier. It was the lowest portion of sales in the $500,000+ price range since May 2009.
“For a few months now, lower prices and amazingly low mortgage rates have kept resale activity slightly ahead of last year. Of course, that’s not saying a lot when you consider sales were 25 to 30 percent below average. The market continues to struggle with a difficult lending environment, uncertainty among potential buyers, underwater homeowners who can’t move up, and a weak job market. The lower conforming loan limits implemented last month help explain the relatively sharp drop in mid- to high-end sales during October. Now we’ll have to see if the private loan market can fill the void,” said John Walsh, DataQuick president.
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