“Of course – that means that more people are qualified to purchase a “median priced” single family residence in our Valley. It is easier for me to look at things by the Numbers – Here are the Median prices by city and the number of “For Sale” Listings that it was derived from:”
Does the rising housing affordability index help the local SCV real estate market?
Data was pulled by me for this article on 11/14/2011 at 0826hours:
Valencia – 404 Active listings = $359,999
Castaic – 169 Active Listings = $329,000
Stevenson Ranch – 92 Active Listings = $430,000
Saugus – 276 Active Listings = $309,900
Newhall – 235 Active Listings = $265,900
Canyon Country – 510 Active Listings = $267,000
60% of our Buyers are First Timers – 20% are Step up and purchased pre 2002 – 20% are on stand by awaiting for the 3 years since their Short Sale or Foreclosure terminated. (2 Years for VA loans).
Today, we are seeing very few “stated income” and self employed buyers that are fitting within the Median Price Range. Most everyone, we are working with, has W-2 type of income and they are usually harmed by their Debt to Income Ratios. However, many times this situation is remedied when they are instructed to pay off a bill or two.
A Typical Gauge with Interest Rates is as follows. When there is a 1% increase in interest rates – that impacts 10% of a Buyers Buying power.
Rates are at 4% for example – If they go to 5% and a Buyer was qualified to purchase a home at $400,000 – With that 1% increase in interest rates, they would lose $40,000 in qualification amount – so they would be able to qualify at $360,000 maximum.
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