The California Association of Realtors (C.A.R.) just released a report that shows the percentage of households that could now afford to buy an entry-level home in Orange County, CA grew to 48% in the fourth quarter of 2008. A huge improvement as compared to the 27% reported for the same period a year ago. Just two years ago the index showed that home affordability was at an all time low of 11% of households!
California as a whole also showed a large increase in affordability. The state in total checked in with a household entry level affordability index of 59% as compared to 33% just one year ago!
As we become more in line with home affordability with other states, we could soon see an influx of people relocating from out-of -state. California will always be a highly desired place to live due to the climate and proximity to sandy beaches and therefore real estate will always sell at a premium to many other states…..just not as a high a premium as we were use to seeing over the last couple of years.
Is the premium now low enough to attract an influx of home buyers? Only time will tell!
