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Updates on home prices, rates, delinquencies, affordability

posted Jun 9, 2017, 4:39 PM by Joyce Evans   [ updated Jun 9, 2017, 4:39 PM ]
The local real estate market remains strong in several areas according to reports from various industry sources.
 
San Diego home prices, including distressed sales, increased by 7.1 percent year-over-year in April, according to a CoreLogic report, from a median price of about $565,000 (April 2016) to $599,350 (April 2017). The California-based property data and analytics company said the nation is seeing similar increases. Nationwide, prices increased by 6.9 percent from April 2016 to April 2017, Core Logic said. The CoreLogic Home Price Index Forecast indicates that home prices will increase by 5.1 percent on a year-over-year basis by April 2018.
 
Also, according to CoreLogic, all-cash transactions are in decline in San Diego. All-cash sales share was 20.4 percent in January 2017, a 0.09 percentage point decrease from January 2016. The nation’s 36.5 percent all-cash figure for January was unchanged from the comparable month in 2016. Statewide, California had an average of 27 percent of its home sales were all-cash transactions in January.
 
Fortunately, loan delinquency rates continue to decline in San Diego County. Core Logic reports that 2.6 percent of residential mortgages were at least 30 days delinquent in February, compared with 3 percent a year ago. The percentage of residential mortgages delinquent 90 days or more amounted to an even 1 percent, a drop from 1.3 percent in February 2016. In California, 3.1 percent of residential mortgages were at least 30 days delinquent and 1.1 percent were 90 days or more past due.
 
In good news for potential buyers, mortgage rates have inched back down to nearly 4 percent. In mid-April, the average rate dropped to 4.04 percent, said Mortgage News Daily. The average for a 30-year fixed-rate mortgage was 3.59 percent on Nov. 7. It started to climb after the general election, hitting 4.32 percent on Dec. 29. In costly markets, like Southern California, small rate changes can mean saving thousands of dollars over the life of a loan, even though rates are at historic lows.fixed-rate mortgage was 3.59 percent on Nov. 7. It started to climb after the general election, hitting 4.32 percent on Dec. 29. In costly markets, like Southern California, small rate changes can mean saving thousands of dollars over the life of a loan, even though rates are at historic lows.
 
On the other hand, low rates do not change the home inventory situation, which is dismal. Low mortgage rates are certainly a boon for buyers, but it’s not much of a benefit if there’s very little available to buy.
 
Meanwhile, home affordability changed little in San Diego County during the first quarter and remains elusive in many other parts of the state, according to the California Association of REALTORS® (C.A.R.). C.A.R. found that 28 percent of San Diego-area households could afford a single-family home in the first quarter. It marked a slight improvement from the 27 percent figure in the fourth quarter of 2016, but a decrease from the 29 percent who could afford homes in the first quarter of 2016. C.A.R. said that it takes a minimum household income of $115,900 to afford the median home price of $564,000. That translates to a $2,900 monthly mortgage payment, including taxes and insurance, and assuming a 20 percent down payment. Statewide, the percentage of homebuyers who could afford to purchase a median-priced, existing single-family home in California in first quarter inched up to 32 percent, from 31 percent in the fourth quarter of 2016. A year ago, however, 34 percent could afford a median-priced, single-family home, according to the C.A.R. The statewide affordability index has been below 40 percent for 16 consecutive quarters, and it is near the mid-2008 low level of 29 percent.
 
Also on the down side, according to C.A.R., pending home resales were down in San Diego County and across the state in April. Based on signed contracts, pending home sales statewide declined 7.4 percent year-over-year in April, making the fourth straight monthly drop. C.A.R.’s Pending Home Sales Index (PHSI) registered 113.7 April compared to 122.8 a year ago. San Diego's pending sales index declined 11.1 percent year-over-year in April, ending up with an indexed level of 139.8. It marked the largest pending sales decline in Southern California. At the regional level, Southern California was actually the most resilient region in the state, where pending sales held on for a modest decline of 2.8 percent, aided by a 2 percent increase in Riverside County and a 1.1 percent uptick in Orange County.down side, according to C.A.R., pending home resales were down in San Diego County and across the state in April. Based on signed contracts, pending home sales statewide declined 7.4 percent year-over-year in April, making the fourth straight monthly drop. C.A.R.’s Pending Home Sales Index (PHSI) registered 113.7 April compared to 122.8 a year ago. San Diego's pending sales index declined 11.1 percent year-over-year in April, ending up with an indexed level of 139.8. It marked the largest pending sales decline in Southern California. At the regional level, Southern California was actually the most resilient region in the state, where pending sales held on for a modest decline of 2.8 percent, aided by a 2 percent increase in Riverside County and a 1.1 percent uptick in Orange County.
 
Also, to a new Zillow report, moving from a one-bedroom unit to a two-bedroom unit in San Diego will add $798 to the monthly mortgage. Zillow’s "Cost of Moving Up Analysis" report also shows that moving from a two-bedroom unit to a three-bedroom unit will add $928 to the monthly mortgage, and moving from a three-bedroom to a four-bedroom unit will add $998 to the monthly mortgage. In San Diego County, upgrading from a two-bedroom, one-bath home to a two-bedroom, two-bath home boosts the average monthly mortgage by $771. Payments increase to a more modest $791 a month when moving from a three-bedroom, one-bath unit to a three-bedroom, two-bath unit. However, the figure jumps to $962 when going to a three-bedroom, three-bath unit; increases to $988 when moving to a four-bedroom, three-bath house; and climbs to $1,368 a month extra when the upgrading to four bedrooms and four bathrooms.
 
Finally, a recent study shows that California is crucial to U.S. growth. During the last five years, California has outperformed the nation in just about every important economic metric. Yes, the state is big, accounting for about 12 percent of the nation's population. But its share of economic growth has been even bigger. The state accounted for 17 percent of job growth in the United States from 2012 to 2016, and a quarter of the growth in gross domestic product. The Center for Continuing Study of the California Economy attributes California’s economic rebound to the three Ts, including technology, trade and tourism.

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