Housing Affordability Rises

Housing affordability has risen dramatically, to the point where about 2/3 of Californians can afford to buy a home (vs. just over 1/2 in 2008). An entry level home in California costs just under $1500 a month to own - including mortgage, taxes and insurance.

This plus low interest rates and tax incentives caused California's year end 2009 median home prices to rise 8.4% over 2008; this was the 10th month in a row where prices rose. Here in Santa Cruz County, November and December 2009's median home prices ranged between $550,000 and 549,500, up from $450,000 12 months ago.

Another measure to watch is unsold inventory - which was 4.7 months for Santa Cruz County, versus 8.3 months a year ago. Statewide, inventory fell to 3.8 months, the lowest level in five years It is this squeeze in inventory plus sheer affordability that is creating the multiple offer environment for the foreclosed homes. While the economy struggles with unemployment, there will be continued foreclosures coming on to the market. Economists for CAR expect foreclosure rates to be about level in 2010 with 2009.

To read more,
http://online.wsj.com/article/SB10001424052748703822404575019302869755306.html?mod=WSJ_Real+Estate_LeftTopNews

http://www.topix.net/forum/source/santa-cruz-sentinel/T9F39R1FJTNHQRV8I

http://online.wsj.com/article/SB10001424052748703657604575005491246452922.html?mod=djemRealEstate