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A silver lining to San Diego County's falling home prices emerged as an index showed housing affordability approaching the 50 percent mark for the first time in 15 years.
A report from the National Association of Home Builders showed that 44.6 percent of homes sold in the fourth quarter of 2008 were affordable to households earning the county's median income of $72,100.?? The highest San Diego has ever reached was 48.2 percent in the first quarter of 1994 at the depths of the last recession. The latest reading compares with 38.7 percent in the third quarter of 2008 and 14.3 percent in the fourth quarter of 2007.
Nationally, the index rose to 62.4 percent, up from 56.1 percent in the third quarter and 46.6 percent at the end of 2007.
Meanwhile, La Jolla-based MDA DataQuick reported that home prices continue to fall in Southern California. Overall, the median for the six-county region stood at $250,000, down 39.8 percent from January 2008's $415,000.?? The firm had reported earlier this week that San Diego County's median home price had sunk below $300,000 for the first time in seven years. The $280,000 median for January was 34.7 percent below year-ago levels.
Analysts said the continuing decline reflects the preponderance of low-cost foreclosed homes, which represented 55 percent of all San Diego resale houses and condos sold in January.?? In San Diego and the rest of Southern California, sales volume continues to increase as buyers look for bargains. There were 15,227 sales throughout the region, up 52.5 percent year-over-year, and 2,459 in San Diego County, up 34.7 percent.
Buyers are reaping the benefits of falling interest rates. Freddie Mac reported that its weekly survey showed the average 30-year, fixed-rate loan carried a rate of 5.04 percent, down from 5.16 percent a week ago and 6.04 percent a year ago.
Even with falling prices, San Diego County was still the 26th least-affordable of 222 metro areas. The figures are based??on a median income of $72,100 and a median-priced home at $295,000, down from $412,000 a year earlier.
Brian Yui, president of Houserebate.com, said it is likely San Diego County's affordability improved on only a temporary basis because low-cost foreclosure homes have pushed down the median in the most-affected neighborhoods.
With the federal government's efforts to stem foreclosures and help owners refinance, Yui predicted the low-cost days will end and prices will stabilize before rising once again.
"Once stabilization occurs, we'll probably inch our way back to be one of the least-affordable cities because the weather's so great," Yui said.
But for the next year or two, he said, low prices should attract would-be buyers to move to the San Diego area and employers to stay rather than relocate, as some were doing when prices rose so rapidly in the late 1990s and early 2000s.
If you would like to get in on the record number of affordable homes available in San Diego, visit Houserebate.com and see the complete MLS and Foreclosure listing.
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