Affording Sacramento
From CNN Money:
According to a report from Wells Fargo Bank and the National Association of Home Builders (NAHB), about 44 percent of all homes sold in the United States during the first three months of the year were affordable to families earning the median household income for the area they lived in.
Sacramento--Arden-Arcade--Roseville, CA
2007 Median Family Income: $67,200
1st Qtr 2007 Median Sales Price: $363,000
National Affordability Rank: #199 (out of 219)
1st Qtr 2007 Share of Homes Affordable for Median Income: 13.4%
9 comments:
Ummm that's a 5.4 to 1 ratio. Are they counting voodoo loans?
We make a bit more then that and I'd never consider a home over 280K and it had better well be prefect for that 280k.
Freaking glue huffers
You forget that some of us that already owned a home for a while already have equity that can be used for a future purchase.
Of course, if we were starting out, we could only really afford a home that was about $400K (making $125K/year combined, or the top 10% of the country).
But $400K here in Sacramento does not get you much.
I guess our deal is a little different than most on this blog, in that my wife and I own property because we bought, sold, and bought again during the massive run up that occurred between 2000-2004. We didn't get out at the top, but we did acheive our goal of being mortgage free on the last transaction we made.
I'm also a renter because the property I bought(Red Bluff)is too far away from the business centers I need to get to up and down the state.
We run three businesses out our home (even a high end art business Gwyn) and get some tax advantages that are equal to, or better than we'd get, if we owned...and the all the risks remain with the landlord.
So basically I put on two hats when when I'm in here, as a real estate owner and as a renter.
Based on what I've seen in this particular market, there will be some great deals coming in the next couple of years. Our goal is to buy another home here when the time is right. We'd rather miss it by 5% up, then take it in the shorts for 30 % down...patience is the key.
Along with ignoring the prior equity gain and/or downpayment and only looking at loan to income ratio, this article also ignores the fact that homeownership is ~60% in Sacramento. Such simplistic math is on par with saying "because the average GDP in China is $2K/person, then no one in China can afford a house or car much less luxury goods". The faulty logic is obvious when looking at Shanghai just as it is obvious when looking at Sacramento.
Reltytrac.com has Sacramento area gaining 400 bank owned homes in this last week. Wow those banks must feel so lucky becuase they are getting all these great homes, because you know real estate never goes down.
I think more homes will be foreclosed on in the next couple of months than are actually sold.
Were right on track for a 50% decline by 2009.
Perfect Storm....
When that happens, and I really believe it will, these piddly little price reductions will look like rain drops compared to the price avalanche we could see...
James:"Along with ignoring the prior equity gain and/or downpayment and only looking at loan to income ratio, this article also ignores the fact that homeownership is ~60% in Sacramento. Such simplistic math is on par with saying "because the average GDP in China is $2K/person, then no one in China can afford a house or car much less luxury goods". The faulty logic is obvious when looking at Shanghai just as it is obvious when looking at Sacramento."
Yeah, but those people already bought and are living in their homes. Who's going to buy the massive amounts of foreclosures that are entering the market.
No one because they aren't affordable to first time buyers so
they will sit and sit or the prices
will have to come down to meet
affordability levels.
James said: "this article also ignores the fact that homeownership is ~60% in Sacramento."
You may or may not be correct, but I submit that if you ARE correct, that percentage will likely drop over the next few years as more and more home "owners" are eaten alive by their ARM resets.
Post a Comment