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Thursday, February 22, 2007

 

Los Angeles Housing Least Affordable In US

The California Building Industry Association reported today that housing in California remains the least affordable (and therefore the least attainable) in the nation, with Los Angeles at the top of the list.

A pdf download provided by the CBIA lists the least affordable metro areas in the nation. According to that data, in the final quarter of 2006, only 2% of the homes on the market in the Los Angeles region were affordable for households making the median income of $56,200.

The national average is 41.6 percent!

The California Association of Realtors also tracks affordability, but it made some major changes last year in how it calculates affordability. The new math puts a different spin on the data. However, CAR has yet to release its housing affordability index for the fourth quarter of 2006, so there's nothing yet to compare with the CBIA's numbers. However, a year-end report from CAR three weeks ago said:
"Affordability concerns continued to impact the residential real estate market in California, with the share of first-time buyers declining to their second lowest level from 30.5 percent in 2005 to 27.1 percent in 2006."
Here's a brief quote from the CBIA release today:
Despite a cooling housing market where prices have fallen slightly, California still remained the most unaffordable state in the nation during the fourth quarter of 2006, the California Building Industry Association reported today.

CBIA’s analysis of the quarterly National Association of Home Builders/Wells Fargo Housing Opportunity Index found that during the fourth quarter of the year, affordability actually declined in five of the 28 California metro areas surveyed. Adding to the grim picture, in 18 metro areas less than 10 percent of the homes could be afforded by families earning the median income there.

Wes Keusder, CBIA’s Chairman and owner of Costa Mesa-based Keusder Homes, said the report once again verifies what most Californians already know all too well: affording a home in California is becoming more and more out of reach.

“Despite all of the doom and gloom about housing prices dropping, affordability has improved only slightly and only in some parts of the state. A one or two percent drop in price has little effect on affordability.” Keusder said.

Keusder added that the slight decline in prices does nothing to negate the fact that in the entire nation, the nine least affordable places to buy a home in California, as are 18 of the bottom 20.
More on the housing crisis is in a prior post.

— TJ Sullivan in LA
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