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California's Housing Affordability Index and What it Means for San Diego Homebuyers - Article Banner

At San Diego Residential Property Management we’ve spent some time analyzing The California Association of Realtors’ (CAR) recently published “Housing Affordability Index” (HAI) report for the 4th quarter of 2019.

Whether you’re thinking about buying a home or interested in how the real estate market is trending, we have some information for you from that report that may help with your buying and investment decisions.

Median-Priced Homes Accessible to More Than One-Third of California Residents

The report indicates that 31 percent of all California households can afford to purchase a median-priced single-family home of approximately $607,000. In order to qualify for such a purchase, the household would need a minimum combined income of $119,600 per year.

The median price for a condo is $480,000, and that means 41 percent of California homebuyers would be able to afford a condo. Such a purchase would require a minimum household income of at least $94,400, and the average monthly mortgage payment would be $2,360.

California Housing Affordability Key Points

You can access the entire CAR report yourself, but here are some of the key points that are worthy of consideration:

  • Compared to a year ago, housing affordability improved in 44 tracked counties and declined in four counties. Affordability remained flat in one county.
  • Affordability in the San Francisco Bay Area improved from fourth-quarter 2018 in every county. San Francisco County was the least affordable, with just 18 percent of households able to purchase the $1,600,000 median-priced home. Forty-seven percent of Solano County households could afford the $460,000 median-priced home, making it the most affordable Bay Area market.
  • Affordability is better throughout Southern California, with Orange County being the least affordable (26 percent) and San Bernardino County being the most affordable (51 percent).
  • All counties in the Central Valley region have increased in affordability from a year ago. San Benito County (34 percent) was the least affordable and Kings County (55 percent) was the most affordable.
  • Housing affordability improved in three of four counties in the Central Coast region, especially Santa Cruz, which jumped from 12 to 21 percent in fourth-quarter 2019. Santa Barbara was the only county in the region with a year-over-year decline in affordability, with the index dipping to 23 percent in fourth-quarter 2019 from 26 percent a year ago.
  • The most affordable counties in California were Lassen (63 percent), Kings (55 percent), and Tulare and Plumas (52 percent). The minimum annual income needed to qualify for a home in these counties was less than $54,000.
  • San Francisco (18 percent), San Mateo (20 percent), and Santa Cruz (21 percent) counties were the least affordable areas in the state. San Francisco County required the highest minimum qualifying income in the entire state. An annual income of $314,800 was needed to purchase a home in San Francisco County.
  • San Mateo County also required an annual income exceeding $300,000 to purchase a median-priced home.
  • The median price of a home in the United States is $274,900.
  • The median price of a single-family home in San Diego County is $655,000.

Real Estate InvestmentIf you’re thinking about buying a condo or a single-family home in San Diego or the surrounding area, we’d be happy to provide the expert assistance that’s required in the California real estate market. We can help you find your dream home.

Contact us at San Diego Residential Property Management. We’re a licensed broker in the state of California, and we are more than equipped to assist you in this very important decision.