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Only 11 days to sell a home in April, said C.A.R.

Posted by Taylor Thompson in News, Uncategorized | 0 comments

Housing affordability improved statewide in the first quarter 2018 due to higher wages and lower seasonable home prices, according to the California Association of REALTORS®’ (C.A.R.) “Housing Affordability Index” (HAI). C.A.R. said 31 percent of California households could afford to purchase the $538,640 median-priced home in the first quarter of this year, up from 29 percent in fourth-quarter 2017 but down from 32 percent a year ago. In San Diego County, only 26 percent of households could afford to purchase a median-priced home in the first quarter, which remained unchanged from the previous quarter but down from 28 percent in the first quarter of 2017.

C.A.R. said it was the 20th consecutive quarter for its HAI index to be below 40 percent. California’s housing affordability index hit a peak of 56 percent in the 1stQ of 2012. C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. The index is considered the most fundamental measure of housing well-being for homebuyers in the state.

To afford the statewide median-priced single family home of $538,640, a household would need a minimum annual income of $111,500 to make the necessary $2,790 monthly payments, according to 1stQ C.A.R. figures. The payment would include principal, interest, and taxes on a 30-year, fixed-rate mortgage with a 20 percent down payment and an effective composite interest rate of 4.44 percent. The effective interest rate in the 4th 2017 was 4.17 percent and 4.36 percent in the 1stQ 2017.

C.A.R. also said that the affordability of condominiums and townhomes improved slightly in the 1stQ 2018. C.A.R. said 39 percent of California households earning the minimum income could qualify for the purchase of a $449,720 median-priced condominium or townhome in the 1stQ 2018, up from 38 percent of households who could afford to purchase in the 4thQ 2017. An annual income of $93,090 would be required to make monthly payments of $2,330 in the 1stQ 2018.

In addition, C.A.R. recently released its April homes sales and price report. C.A.R. said April’s statewide median home price was $584,460, up 3.5 percent from March and 8.6 percent from April 2017. In San Diego County, the median sales price of an existing single-family home was $635,000 in April, 1.5 percent higher than the $625,400 sales price figure for March 2018 and 7.6 percent higher than the $590,000 sales price figure for April 2017.

The median number of days it took to sell a California single-family home remained low at 15 days in April, compared with 16 days in March and 17 days in April 2017. Meanwhile, in San Diego, the median number of days a home remained unsold on the market was 11 days in April 2018, compared to 12 days in March 2018 and 11 days in April 2017.

C.A.R. said existing, single-family home sales totaled 416,790 in April on a seasonally adjusted annualized rate, down 1.7 percent from March and up 2.2 percent from April 2017. April was the first time in nearly three years for the number of available homes for sale to increase following nearly two consecutive years of double-digit declines in active listings, C.A.R. said.

“After nearly three years of decline in active listings, we’re finally seeing an improvement in the availability of homes for sale, which is encouraging for prospective buyers as we enter the busy spring home-buying season,” said C.A.R. President Steve White. “However, entry-level buyers may continue to experience the housing shortage as homes priced under $300,000 continue to bear the brunt of inventory issues.”

“After increasing year-over-year by more than 8 percent for the past three months, the California median home price is close to striking distance of the pre-recession peak price of $594,530, which was recorded in May 2007,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “With a continued imbalance of supply and demand, we’ll likely break previous price records, which many areas have already done, before the summer is over.”

In other recent real estate news according to news reports:

— CoreLogic, an Orange County-based real estate information service, said San Diego County’s median home price hit an all-time high of $570,000 in April, increasing 8.6 percent in a year from $525,000 in April 2017. April’s all-time high figure surpasses the previous peak of $550,000 set the previous month of March. The increase was largely led by the rising price of resale condos, going up 11.7 percent in a year to a record high median of $430,000. The median price of a resale home reached a record $610,500, while the newly built home price was $707,500. While the rising prices are notable, they still technically lower than prices at the height of the housing boom. In November 2005, the median hit $517,500, which would be more than $655,000 today after adjusting for inflation.

— CALmatters, a news media outlet covering state policy issues in California, recently identified several reasons why California ’s housing costs are so high. At its most basic level, it’s a story of supply and demand: Lots of people want to live here and there aren’t enough homes to go around. Among the reasons: We haven’t built enough housing; Demand to live and work and own in urban areas has reached a breaking point; In most parts of California, the process to get new housing approved is difficult, time consumer and expensive; Land, labor and raw material costs are higher in California than the rest of the country.

— Is a housing bubble coming? Probably not, according to one mortgage insurance company. Arch MI says there’s only a slim chance Southern California home prices will fall in the next two years. Arch MI gauged the economic foundations of home values in 100 major metropolitan areas to determine local housing markets with “minimal” risk. Locally, Arch MI found solid performance among regional businesses and limited development of new homes as factors that should keep home prices firm.

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