Will California ever be an affordable place to live (Oakland: loan, house)

[mysticaltyger]

Originally Posted by Ceece

I agree. Prices have already come down quite a bit and there are plenty of "affordable" places and things in CA now, but it depends on exactly what you are talking about. Can a store clerk or office worker buy a 3/2 house in a desireable neighborhood and raise a family on the one income? No. But 2 store clerks or office workers can pool their resources rent something decent and live a good life if they are away from the hot spots. And a professional income (or two) will give you plenty of options, again, avoiding the hot spots.

Honestly, I don't even think 2 office workers or store clerks could reasonably afford a 3/2 house in Riverside, Bakersfield, or Sacramento. The cost of living even in the cheaper parts of CA is still above the national average, even though wages in those areas are below the national average.

To answer the OP's question, I'd have to say the chances of California ever becoming a truly affordable place are so slim they're not even worth considering. And that's true even in the cheaper parts of the state.

[mysticaltyger]

Originally Posted by TimC2462

I've seen traditional nuclear American family of 4 still living together, after the kids have come home from college.

Even so, can you blame a large family having to live under the same roof to maintain affordable living in California?

I don't blame them, but from an American POV, it equates to a lower quality of life.

[mysticaltyger]

Originally Posted by KC6ZLV

It appears as if you don't have a full understanding of what happened in the real estate market here.

Couples earning $75,000 were able to get loans above and beyond what was traditionally accepted as affordable, which is about three times ones income. It is a formula that worked fairly well for many years and was dismissed. The result was loans which allowed them to buy homes in excess of $400,000, which allowed the price of housing to go to what it did. A loan for that much should require an income of around $133,000 a year. While incomes are higher in some areas of California, most people aren't coming close to earning that much. Statewide, the median household income is a little more than $60,000, which means it should have been relatively easy to find a $180,000 house on the market before the real estate market imploded. In 2006 a $180,000 house would certainly required some work, have been located in some tiny rural town, probably between Fresno and Bakersfield where the economy economy is based on receipt of public assistance and meth production, and purchased by a professional slumlord from out of the area.

Thank you for saying this!!!^^^^^

I was going to say this but you beat me to it an you said it better

[mysticaltyger]

Originally Posted by Marv101

The #1 culprit to 'affordable housing' in this state is indeed the price of land, which has been caused by a nonstop string of rampant land restrictions by politicians for decades.
.

^^^^This^^^^

However, it's not only the politicans who are at fault. So are Californians themselves. Many will fight any kind of development tooth and nail. They believe (or pretend to believe) human population growth is at the root of all our problems (as opposed to poor resource management) and they make no bones about wanting to keep new people from moving into the state. We see quite a few of these people on the California CD forums.

[mysticaltyger]

Originally Posted by jeffredo

The Central Valley is affordable from a real estate perspective. Home prices there have dropped to the levels of most Southern, Mountain and some Midwestern states (like MN, WI, IA). Sacramento is no more expensive than Austin TX for example.

Relative to local incomes where the prevailing wages are low, the Central Valley is still unaffordable.

Other parts of the country offer a combination of higher wages and/or lower home prices.

Californians have a warped idea of what "affordable" is, IMO.

[FresnoFacts]

Originally Posted by mysticaltyger

Relative to local incomes where the prevailing wages are low, the Central Valley is still unaffordable.

Other parts of the country offer a combination of higher wages and/or lower home prices.

The Central Valley is comparable to the overall US in terms of wages vs. housing costs according to the numbers I've seen from different sources.

I'll post just one as an example. I don't necessarily agree with their methodology (the payment vs income % is too high for my taste and they use a 10% down instead of a 20% and of course it is realtors ) but since they also calculate a US number with the same method it is a similiar comparison.

The California Association of Realtors does an affordability index for buyers in different parts of the state. It is based on median housing price and the household income distribution in the different parts of the state.

Basically it is supposedly what percent of households in the region could afford spending up to 40% of their income going to the monthly payment for the median priced home.

California statewide is currently calculated at 64% of households could "afford" paying 40% of their income to buy the current median priced home.

The national average is 78% of households.

A few individual regions above or near the national number:
Fresno County - 77%
Sacramento County - 80%
Merced County - 83%
Riverside/San Bernardino Counties - 77%
High Desert - 84%

Other areas -
Santa Cruz County - 46%
Contra Costa County - 43%
Los Angeles County - 56%
Orange County - 54%
San Diego County - 58%

http://www.car.org/marketdata/data/ftbhai/

[MtnSurfer]

Originally Posted by FresnoFacts

The Central Valley is comparable to the overall US in terms of wages vs. housing costs according to the numbers I've seen from different sources.

I'll post just one as an example. I don't necessarily agree with their methodology (the payment vs income % is too high for my taste and they use a 10% down instead of a 20% and of course it is realtors ) but since they also calculate a US number with the same method it is a similiar comparison.

The California Association of Realtors does an affordability index for buyers in different parts of the state. It is based on median housing price and the household income distribution in the different parts of the state.

Basically it is supposedly what percent of households in the region could afford spending up to 40% of their income going to the monthly payment for the median priced home.

California statewide is currently calculated at 64% of households could "afford" paying 40% of their income to buy the current median priced home.

The national average is 78% of households.

A few individual regions above or near the national number:
Fresno County - 77%
Sacramento County - 80%
Merced County - 83%
Riverside/San Bernardino Counties - 77%
High Desert - 84%

Other areas -
Santa Cruz County - 46%
Contra Costa County - 43%
Los Angeles County - 56%
Orange County - 54%
San Diego County - 58%

Housing Affordability Index - First-Time Buyer

Great post Fresno Facts! It's nice when one uses numbers and facts to support what the are saying. I agree with you in that there are many parts of CA which are more affordable. I think the ppl who feel most disenfranchised are those who live in the highest cost of living areas (the Bay Area, LA, OC) and aren't compensated accordingly.

After living in CO and buying and selling a home there I would chose the Fresno/Clovis area over Colorado Springs, Denver, the South or Midwest for our family. And both of these cities are relatively affordable on a national level. There are many, many other cities throughout the state such as the one's I've mentioned before - Chico, Marina, Paso Robles, Santa Maria, Grass Valley, Rocklin, Sonora, San Lorenzo, Gilroy, Santa Rosa, Oxnard, Murrieta, Chula Vista, Fallbrook, Escondido, etc...

We have friends who just bought a home in Murrieta after the RE crash and got a great deal. They did this instead of moving to CO which was their original plan. And it worked out better for them because they are closer to family and friends here. Plus as a lawyer and member of the State Bar he doesn't have to go through the change process to practice elsewhere. We also have relatives in SD County and many of the smaller towns have seen huge drops in prices since the crash as well, similar to what SOON2BNSURPRISE found in Oxnard recently.

So while places like Pebble Beach, Palo Alto, much the Bay Area, LA, etc... will always be higher than the rest of the nation there are more affordable options throughout the state, especially now.

Derek

[SOON2BNSURPRISE]

Originally Posted by mysticaltyger

Honestly, I don't even think 2 office workers or store clerks could reasonably afford a 3/2 house in Riverside, Bakersfield, or Sacramento. The cost of living even in the cheaper parts of CA is still above the national average, even though wages in those areas are below the national average.

To answer the OP's question, I'd have to say the chances of California ever becoming a truly affordable place are so slim they're not even worth considering. And that's true even in the cheaper parts of the state.

Why would anyone buy a home in an entry level type of job anyway? I agree with you that it is just too costly for someone in that kind of work. I have known of plenty of people that have second jobs at stores that own homes. I have a coworker that works at our hospital in the Radiology department that works nights at a Costco. In that situation, yes he can afford to own a home in Ventura on the coast. His wife also works with us at the hospital In their situation it is 3 jobs to pay for the lifestyle of living on the coast.

Look at it this way, when the state offers a program for first time home buyers and the income limits are up to $120,000 a year for a married couple you can bet that they aren't offering those loans to people that flip burgers or work in retail. In Arizona a similar program would have people making income in the $35,000 to $75,000 range, an amount that I left on my own a long time ago.

[CAVA1990]

People confuse incomes of homeowners and homebuyers. If you've been a homeowner for quite a long time like I have you can live very comfortably on a much lower salary than someone buying into the market nowadays. Pretty common for people making well less than $100K living quite nicely in homes worth over $750K. That's why median incomes of residents relative to home prices mean nothing. The price of homes is related to the income of homebuyers, not existing owners. This is even more skewed in CA where you have a lot of long time owners paying relatively little in property tax, making their monthly outgo for housing even less burdensome.

A good reason to buy a house when you're young is your income grows as you get older while your housing cost stays relatively flat. Again thanks to prop. 13 this is even truer.

[Oerdin]

The population just keeps going up so the leaving bs is just that bs. BTW I assume the OP was from Texas since he can't even spell leaving correctly.