California Home Price Fundamentals

California Home Price Fundamentals.

Check out this interactive map of the “Home Price Fundamentals” for California, and individual Counties.

The interactive tool is provided by the California Association of Realtors (CAR)

Some of these graphs are most interesting, like the one called “Years of Savings Required for Down payment”, which is now close to 20.  The one called “Price to Income Ratio” shows that it takes about 8.3 years of paychecks to purchase the median priced home in California right now.

 

If you look at the County of Santa Clara though, the figures are staggering: it takes over 11 years of salary to afford the median priced home, and it takes over 26 years of savings (at 6% of savings rate) to afford the typical 20% down payment.

It also shows that in California, if you are in the median, it takes about 59% of the yearly income to pay for your mortgage...

Thank you for reading,

Francis

Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent uptick)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

What Home Buyers Want...

From the California Association of Realtors, and Realtor.com:
these are the attributes most likely to be seeked by homebuyers:

Another thing that I would definitely add to this picture is, for buyers 55+ and older:
- a one-level property with no stairs.
... and in general, my experience is that would-be home buyers are more attracted by homes with a lot of natural light and an open floor plan, and will sacrifice other features in order to get that.

Francis
Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent decline)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Home prices going forward in the US... & Bay Area

US house prices are going to rise at twice the speed of inflation and pay: Reuters poll   
Source: CNBC Article

An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.

The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.

U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.

A further breakdown of the April data showed the inventory of existing homes had declined for 35 straight months on an annual basis while the median house price was up for a 74th consecutive month.

About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall over the next 12 months.

In the Bay Area, things are not better.  The ratio of home completions to job growth is still very small, which will keep pressure on home prices here too:

.. while according to this article from the Mercury News, the nation's top three most expensive places for renters are here in the Bay Area...

Thank you for reading,

Francis
Detailed, local trends etc...
Current mortgage rates
Price your home now
A worthy local non-profit to remember: Community Services Agency in Mountain View.

New Surprising Buyers Demographics

New Surprising Buyers Demographics:

According to a new report by Veritas Urbis Economics, the landscape of buyers is changing in surprising ways as compared to  35 years ago.

According to this Housing Wire article by Kelsey Ramirez:
- the share of women as buyers has increased from 18.9% in 1981 to 46.4% in 2017,
- single women homebuyers make up 18.9% of all buyers, when it was just 9.1% in 1981,
- the share of households over 55 increased to 27.8% in 2017 (it was 16.1% in 1981),
- homebuyers under 35 made up 52% of all buyers in 1981, they are now under 34%.

How does it play out in the Bay Area of San Francisco, the Silicon Valley?
I don't think we fall within those stats very well when it comes to age.  In my (limited) experience, in the local market, there are quite a few younger households among the buyers, and as far as households over 55, they make up a lot of the sellers, not buyers: as people age, they are likely to sell their home at some point, and in that case they most often leave the area.  Typically this demographic segment does not buy in the Valley as prices and property taxes are too high for the retired population.  Although we do have a portion of the elderly buyers who are moving down, after selling a property that has become too large or far away for them.

Thank you for reading,

Francis

Detailed, local trends etc...
Current mortgage rates
Price your home now
A worthy local non-profit to remember: Community Services Agency in Mountain View.