According to a California Association of REALTORS® report released this week, Santa Clara County continues to be among the least affordable areas to live in the state, but a local REALTOR® official notes that even in the region, housing affordability is much improved from a few years ago. The report indicates housing affordability among California first-time home buyers improved slightly in the third quarter of 2010 on a quarter-to-quarter, as well as year-to-year basis.
Santa Clara County's housing affordability index of 53 percent was up from the previous quarter, when it was pegged at 51 percent. The index was also 53 percent in the third quarter of 2009. During the third quarter of 2010, first-time buyers in the county needed to earn a minimum annual income of $84,600 to qualify for an entry-level home of $534,400. The monthly payment, including taxes and insurance, was $1,970.
Jeff Bell, president of the Silicon Valley Association of REALTORS® acknowledged it costs more to live in the Silicon Valley region, but housing affordability has continued to improve for buyers as home prices stabilize.
"I remember four years ago, when only 26 percentof first-time buyers could afford a median-priced home in Santa Clara County," Bell said. "Today, more than double the number of first-time home buyers can afford to purchase a home in the region."
Statewide, the percentage of first-time buyers who could afford to purchase an entry-level home was at 66 percent in the third quarter of 2010, according to C.A.R.'s First-time Buyer Housing Affordability Index. In the second quarter of 2010 the index was a revised 65 percent, and 64 percent in the third quarter of 2009.
"With interest rates at historic lows, which have led to lower monthly mortgage payments, affordability continues to remain at near record-high levels in California," said C.A.R. president Beth L. Peerce. "Another high point for first-time buyers is the current ratio between the California median price and the California median household income. During the third quarter, the ratio stood at 5 to 1 and was at a level we haven't seen in the last 10 years. This is opening many doors for potential first-time buyers."
First-time buyers, who tend to purchase homes equal to 85 percent of the prevailing median price, needed to earn a minimum annual income of $42,300 to qualify for an entry-level home of $266,620 during the third quarter of 2010. The monthly payment, including taxes and insurance, was $1,410, assuming a 10 percent down payment and an adjustable effective interest rate of 3.66. The San Francisco Bay region was the least affordable in the state at 51 percent, followed by the Santa Barbara area and the Santa Clara County region, both at 53 percent.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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