Here in the “Wine Country” of Sonoma County, California, home prices have moderated over the past 5 months but affordability reached a new “post-crash” low of 24%. This means only 24% of our citizens can afford to buy the median home price of $529,000 based on the county wide median income.
Median home price has been flat for 6 months. However, affordability is lacking. Numbers over columns are Sales for the month. Biggest sale month in July which you can expect considering this is when everyone is moving about before the schools start but also while folks are moving INTO the area or are here as tourists.
Here is what we look like as far as the Bay Area affordability index:
And if you think 24% affordability is tough just look at those poor buyers in San Francisco, San Mateo or Santa Clara counties. Affordability leader is Solano County at 44%. Remember though, this “formula” used by the California Assoc. of Realtors is based on buyers making the median income for their county and using 20% down. Granted, not every buyer has 20% down (believe me on this one!) but it is a constant which measures long term affordability. Either way, the trend does not bode well for buyers. Now if the FED increases rates, which by every indication they will, the affordability rate could plummet further. When we encourage you to buy this is NOT a hollow, sales person’s chant–it is based on trends. Also, the FED has stated they may NOT make the increases small. Back in 2000 we were also lamenting the lack of affordable housing but rates then were 8.21%!! Today we have 3.875%. Now REALLY is the time to buy!