Saturday, February 21, 2009

California affordable? You bet! Relatively speaking...

Got a job? Cash? Credit? Boy, does the California housing market have a deal for you.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - For buyers who've got a job, the cash and credit, California is shaping up to be an affordable housing market.

With the median price of homes in the Golden State down more than 40 percent from a year ago, affordability is nearly double what it was a year ago, according to the California Association of Realtors.

The association's First Time Buyer Housing Affordability Index measures the percentage of households that can afford to purchase an entry-level home.

During the fourth quarter of 2008 that percentage was 59 percent, up from 33 percent a year ago. Along with lower prices, cheap interest rates contribute to affordability.

The minimum household income needed to purchase an entry-level home at $248,030 in California in the fourth quarter of 2008 was $48,900, based on an adjustable interest rate of 6.02 percent and assuming a 10 percent down payment. That income is 42 percent lower than a year earlier when households needed $83,700 to qualify for a loan on an entry-level home.

First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,630 for the fourth quarter of 2008.

At 76 percent, the High Desert region was hot, as the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 44 percent, followed by the Los Angeles County region at 46 percent.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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