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75% in San Diego can’t afford median-priced home

posted Feb 12, 2016, 4:24 PM by Joyce Evans   [ updated Feb 12, 2016, 4:25 PM ]
The California Association of REALTORS® (C.A.R.) reports that 75 percent of home buyers in San Diego County cannot afford to purchase a median-priced single-family home.
 
According to C.A.R.’s Housing Affordability Index (HAI) for the fourth-quarter 2015, only 25 percent of home buyers could afford to purchase a median-priced, existing single-family home, which compares to 24 percent for the 2015 third quarter and 27 percent for the fourth quarter 2014.
 
“Demand for housing is remaining strong but housing affordability levels are lagging,” said Anthony Andaya, 2016 PSAR president. “We’re telling our PSAR members that they should advise their clients who may have been waiting to make a move to not wait any longer. There may be fewer options in the foreseeable future due to possible rent increases and a slow rise in mortgage rates and home prices.:
 
Statewide, C.A.R.’s HAI ticked up to 30 percent in the 2015 fourth quarter compared to 29 percent for the 2015 third quarter and 31 percent for the 2014 fourth quarter.
 
C.A.R. said home buyers needed to earn a minimum annual income of $96,640 to qualify for the purchase of a statewide $483,050 median-priced, existing single-family home in the fourth quarter of 2015. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,420, assuming a 20 percent down payment and an effective composite interest rate of 4.07 percent. The effective composite interest rate in third-quarter 2015 was 4.16 percent and 4.20 percent in the fourth quarter of 2014.  The median home price was $488,540 in third-quarter 2015, and an annual income of $98,580 was needed to purchase a home at that price.

In San Diego County, the median home price was $475,000 in December, said real estate data firm CoreLogic. The median home price rose 8 percent throughout 2015 to $475,000, CoreLogic said. The month-to-month increase was 1.5 percent. The median home price for December also happened to be the second-highest since August 2007, when the median price was also $475,000. In June 2015, the median price was $476,000.
 
Meanwhile, the Standard & Poor’s/Case-Shiller Home Price Index recently ranked San Diego as among the country’s top 20 cities for the highest home price increase. In figures released late last month, San Diego’s home prices increased 6 percent in 2015 (through November) while the national average grew 5.3 percent. The Case-Shiller index is considered the gold standard for measuring and comparing overall big-city housing markets because it tracks repeat sales of identical single-family houses as they turn over through the years.
 
The Pacific Southwest Association of REALTORS® (PSAR), a 2,000-member trade group for San Diego-area REALTORS®, provides its members with educational training, advocacy and other services and resources. Founded in 1928, PSAR also provides its members with the latest available information on current market conditions and analysis of the numbers. PSAR is committed to improving the communities it serves and enhancing the quality of life through homeownership opportunities. In 2012, PSAR became one of the state’s largest real estate trade associations with a merger of the El Cajon-based East San Diego County Association of REALTORS® and the Chula Vista-based Pacific Southwest Association of REALTORS®. For more information on PSAR, visit www.psar.org.