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Monday, November 20, 2006

 

LA's Housing Crisis: 1.8% Affordability


Call it a housing bubble. Call it a balloon. Call it nothing of the sort. But whatever you do, the California Building Industry Association wants you to realize that a housing crisis has gripped The Golden State, particularly the Greater Los Angeles Area.

How bad is it?

According to the numbers released today by CBIA, only 1.8 percent of the homes in the Los Angeles-Long Beach-Glendale region are affordable for households making the median income of $56,200 a year.

In contrast, 10 percent of homes in Ventura County are affordable to median-income earners.

But far more startling than that is the national average of 40.4 percent!

That makes the Los Angeles housing market the least affordable in the entire U.S.A.

Robert Rivinius, CBIA President and CEO, said this today in today's news release:
“Despite all of the doom and gloom about housing prices dropping, affordability has improved only slightly and only in some parts of the state, and this does nothing to negate the fact that in the entire nation, the nine least affordable places to buy a home are here in California, as are 18 of the bottom 20.” Rivinius said. “When will our legislators and our local policy makers finally realize just how serious our housing affordability crisis is, and start taking steps to restore the American dream to more California families?”
The state isn't in much better shape than Los Angeles. CBIA says homeownership is 57 percent, which is 13 points less than the national average.

This is the eighth consecutive quarter that LA County has achieved the lowest affordability rank in the nation.

Even Orange County is better at 3.8 percent affordability for median income earners.

It's easy to beat this topic like a drum considering all the statistics available.

Some of the statistics, however, are changing.

The California Association of Realtors recently came up with some new math to calculate its affordability index. After 22 years CAR decided the old formula no longer offered a fair representation of the market.

CAR, whose national affiliate recently purchased advertisements boasting of a healthy housing market, has yet to release its affordability numbers for the third quarter of '06, but they should be coming soon, so keep watching CAR's list of news releases, or check back here.

— TJ Sullivan in LA
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