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Higher home prices reduce California housing affordability in second quarter 2012

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LOS ANGELES, CA – August 10, 2012 – (RealEstateRama) — Higher home prices offset record-low interest rates and lowered housing affordability in California in the second quarter of 2012, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California fell to 51 percent in the second quarter of 2012, down from 56 percent in first-quarter 2012, but matched the 51 percent recorded in second quarter 2011, according to C.A.R.’s Traditional Housing Affordability Index (HAI).

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California.  C.A.R. also reports affordability indices for regions and select counties within the state.  The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn a minimum annual income of $62,390 to qualify for the purchase of a $316,230 statewide median-priced, existing single-family home in the second quarter of 2012.  The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,560, assuming a 20 percent down payment and an effective composite interest rate of 3.92 percent.  The effective composite interest rate in first-quarter 2012 was 4.16 percent and 4.85 percent in the second quarter of 2011.

The San Francisco Bay Area experienced the largest quarterly declines in housing affordability, resulting from double-digit price increases with little movement in the interest rate.  However, when compared with the previous year, changes to the affordability index were minimal, thanks to a near-one percent drop in the effective composite interest rate.

At an index of 78 percent, San Bernardino County was the most affordable county of the state.  At the other end, San Mateo County edged out San Francisco County (24 percent) to be the least affordable, with only 23 percent of households able to purchase the county’s median-priced home.

Visit http://www.car.org/marketdata/data/haitraditional/ to see C.A.R.’s historical housing affordability data.  For first-time buyer housing affordability data, visit http://www.car.org/marketdata/data/ftbhai/.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

STATE/REGION/COUNTY Q2 2012 Q1 2012   Q2 2011  
California Single-family existing 51 56 51
California Condo/Townhomes 62 65 r 60  
Los Angeles Metropolitan Area 53 56 52
Inland Empire 70 71 69
San Francisco Bay Area 35 45 35
United States 67 71 67  
           
San Francisco Bay Area          
Alameda 38 45 35
Contra-Costa (Central County) 26 36 26
Marin 27 32 24
Napa 50 50 47
San Francisco 24 29 24
San Mateo 23 33 22
Santa Clara 32 42 32
Solano 77 77 75
Sonoma 49 51 46  
Southern California          
Los Angeles 49 51 46
Orange County 35 39 31
Riverside County 65 66 64
San Bernardino 78 78 77
San Diego 44 46 41
Ventura 48 50 41  
Central Coast          
Monterey 55 54 56
San Luis Obispo 41 41 37
Santa Barbara 32 46 34
Santa Cruz 34 35 32  
Central Valley          
Fresno 71 72 70
Kings County 75 74 72
Madera 74 77 72
Merced 77 77 76
Placer County 65 67 64
Sacramento 74 74 72
Tulare 74 75 73  

r = revised

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

C.A.R. Region Housing
Affordability Index
Median Home
Price
Monthly Payment Including Taxes & Insurance Minimum
Qualifying Income
Calif. Single-family existing 51  $           316,230  $               1,560  $             62,390
Calif. Condo/Townhomes 62  $           243,260  $               1,200  $             48,000
Los Angeles Metro Area 53  $           292,430  $               1,440  $             57,700
Inland Empire 70  $           183,040  $                   900  $             36,110
San Francisco Bay Area 35  $           552,600  $               2,730  $           109,030
United States 67  $           181,500  $                   900  $             35,810
         
San Francisco Bay Area        
Alameda 38  $           479,970  $               2,370  $             94,700
Contra-Costa (Central County) 26  $           663,870  $               3,270  $           130,980
Marin 27  $           800,180  $               3,950  $           157,880
Napa 50  $           355,260  $               1,750  $             70,090
San Francisco 24  $           718,750  $               3,550  $           141,810
San Mateo 23  $           790,000  $               3,900  $           155,870
Santa Clara 32  $           660,000  $               3,260  $           130,220
Solano 77  $           196,420  $                   970  $             38,750
Sonoma 49  $           349,450  $               1,720  $             68,950
Southern California        
Los Angeles 49  $           296,780  $               1,460  $             58,550
Orange County 35  $           541,960  $               2,670  $           106,930
Riverside County 65  $           215,700  $               1,060  $             42,560
San Bernardino 78  $           134,880  $                   670  $             26,610
San Diego 44  $           379,090  $               1,870  $             74,790
Ventura 48  $           426,930  $               2,110  $             84,230
Central Coast        
Monterey 55  $           285,550  $               1,410  $             56,340
San Luis Obispo 41  $           377,150  $               1,860  $             74,410
Santa Barbara 32  $           477,450  $               2,360  $             94,200
Santa Cruz 34  $           495,000  $               2,440  $             97,660
Central Valley        
Fresno 71  $           144,070  $                   710  $             28,430
Kings County 75  $           145,150  $                   720  $             28,640
Madera 74  $           129,000  $                   640  $             25,450
Merced 77  $           115,410  $                   570  $             22,770
Placer County 65  $           279,820  $               1,380  $             55,210
Sacramento 74  $           170,210  $                   840  $             33,580
Tulare 74  $           124,590  $                   610  $             24,580
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Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is one of the largest state trade organizations in the United States, with nearly 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Contact:

Los Angeles - Executive Office:
525 South Virgil Avenue
Los Angeles, CA 90020-1403
Phone: (213) 739-8200
Fax: (213) 480-7724

Media:

Mark Giberson
Phone: (213) 739-8304.

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