California

Less than 25 percent of SLO County residents can afford a median-priced home

Homes under construction in the Toscano housing development. A new Zillow and CALmatters analysis shows San Luis Obispo County homeowners saved more than $200 million on property taxes, thanks to Proposition 13 and other tax benefits.
Homes under construction in the Toscano housing development. A new Zillow and CALmatters analysis shows San Luis Obispo County homeowners saved more than $200 million on property taxes, thanks to Proposition 13 and other tax benefits. dmiddlecamp@thetribunenews.com

Less than a quarter of San Luis Obispo County residents can now afford to buy a median-priced home, according to a new report from the California Association of Realtors.

Housing affordability has hit a 10-year low throughout most of the state, the report shows, as three out of four state residents can no longer afford sky-high median home prices, according to the association’s second-quarter housing affordability report.

Just 22 percent of San Luis Obispo County residents earn enough money to pay the area median of $618,500 for a single-family home. The median price indicates the market’s midpoint — half of buyers paid less for their houses and half paid more.

San Luis Obispo County homebuyers would need an income of $131,100 to afford the $3,280 monthly payment on a median-priced house. That’s based on a 30-year, fixed-rate loan, with a 20 percent down payment and a 4.7 percent mortgage interest rate.

The percentage of people able to afford an average-price home statewide dropped sharply from 31 percent at the start of 2018 to 26 percent by midyear, the lowest level since 2008.

That state median single-family home price hit $597,000 during the April-to-June time period this year.

Last quarter, 25 percent of San Luis Obispo County residents could afford to buy a home for the median price of $596,400. In May, California’s median home price set a new record of $600,860, and the county’s was even higher at $638,660.

Statewide affordability dip

The second-quarter decline in affordability hit counties throughout California.

Santa Cruz County’s market was the toughest in the state. Only 12 percent of people living there can afford the county’s median home price of $900,000. Rural Lassen County was at the opposite end of the spectrum. Sixty-four percent of residents there could afford that area’s $192,500 median home price.

On the Central Coast, less than a fifth of Monterey County residents can now afford to buy a median-priced house. Just 19 percent of residents can pay for a $647,000 house, down from 23 percent earlier in the year.

The trend even carried through Central Valley counties that have traditionally been considered more affordable.

In Sacramento County, affordability hit a decade-long low, with 41 percent of potential buyers able to afford a $374,000 median-priced home.

Forty-seven percent of Fresno County residents can afford a $268,390 median-priced house, down from 49 percent last quarter.

That continues to be a much better scenario than in the Bay Area, where only 18 percent can afford the $1 million median-price sales tag. In San Francisco, only 14 percent of residents can buy.

The data shows that affordability levels have seen historic fluctuations in the past decade.

With home prices artificially inflated in the mid-2000s, few Californians — only 11 percent — could afford to buy anymore. The housing crash, though, dropped prices dramatically, and by 2011, 56 percent of the state’s residents could afford to buy.

Recent sales data for June show that housing price escalation has begun to level off in the state, as slightly fewer homes sold. But even as prices level, rising mortgage rates continue to have an impact on the average person’s ability to buy, real estate watchers say.

“The lackluster spring homebuying season could be a sign of waning buyer interest as endlessly rising home prices and buyer fatigue adversely affected pent-up demand,” Realtor association President Steve White said in a news statement last month.

Lindsey Holden: 805-781-7939, @lindseymholden
Related stories from Fresno Bee

  Comments