Thursday, February 09, 2006

California Association of Realtors News Release

According to a February 9 news release by the California Association of Realtors, the percentage of households in California able to afford a median-priced home was at 14% in December, down from 19% a year earlier. Your household had to earn $134,200 last year in order to be able to buy the median-priced home of $548,430. For us Angelenos, CAR's measure of affordability in LA County was 12%, up from 11% November 2005 but down from 17% December 2004. Just for fun, I perused the CAR's economic forecast for 2006:
The market will continue to be buoyed by repeat homebuyers, who have accounted for seven out of 10 purchases in recent years. These households will continue to use their equity gains from rising home prices to trade up or to buy a second home. However, would-be first-time homebuyers will find that it’s increasingly difficult to buy a home with both home prices and interest rates on the rise.
OK, so if the first time homebuyers are shut out from the market, who are the repeat homebuyers going to sell to? Was my significant other correct when he said that what drives the South Bay economy is "people selling real estate to each other and teaching each other yoga"? I couldn't help but notice their statement about "cautious optimism". These guys are sounding more and more like Wall Street stockbrokers.


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