Higher paying jobs in Solano County make housing more affordable and reduce commuters

Steve Spencer, broker and owner of Gateway Realty said the local market has been a lot less affordable than it has been in many years but it's still much more affordable than areas like San Francisco.

"Solano County has kind of been proud of the fact that it has been the most affordable in the Bay Area counties, and low interest rates continue to help the affordability index here, but unfortunately, until we get some higher paying jobs here in the county, we're going to need help," Spencer said.

"Some of the reports show Solano County as one of the least affordable counties in California, and the reason is because they compare average job pay in the county to average home prices in the county," he continued. "What's a little bit misleading is that well over half the people in the county who own homes in the county work out of the county where the pay is higher."
He noted that many local residents commute to work elsewhere to afford the houses here.

"So higher paying jobs in Solano County do two things - they make housing more affordable for us here, and they also cure a lot of the transportation problems that we have," Spencer concluded.


Article Launched: 05/14/2005 08:50:33 AM

Growing gapStudy finds increasing disparity between incomes, home prices

From Staff and Wire Reports

The gap between what Californians earn and what they need to earn to buy a home is growing statewide according to the California Association of Realtors, and local real estate professionals say Solano County is not immune to the problem.
California households, with a median household income of $53,540, are $60,380 short of the $113,920 qualifying income needed to purchase a median-priced home at $488,600 in California, according to C.A.R.'s Homebuyer Income Gap Index report for the first quarter of 2005.

The association's Homebuyer Income Gap Index is a quarterly analysis of the difference between the median household income and the qualifying income needed to purchase a median-priced, single-family home for the state and for select regions within the state. It is calculated with the same assumptions used to generate C.A.R.'s monthly Housing Affordability Index: a 20 percent down payment and a monthly payment for principal, interest, taxes and insurance that is no more than 30 percent of a household's income.

"These numbers are particularly troubling for would-be first-time homebuyers, who often are locked out of homeownership because of the lack of affordable homes for sale," said C.A.R. President Jim Hamilton. "While home sales statewide continue to surge, the California real estate market is being dominated by repeat homebuyers, who account for three out of four home purchases in the state."
In Solano County, where the median home price in March was $403,750 and Department of Finance figures show the median income per household at $54,099, some residents are having the same problem.

Steve Spencer, broker and owner of Gateway Realty said the local market has been a lot less affordable than it has been in many years but it's still much more affordable than areas like San Francisco.

"Solano County has kind of been proud of the fact that it has been the most affordable in the Bay Area counties, and low interest rates continue to help the affordability index here, but unfortunately, until we get some higher paying jobs here in the county, we're going to need help," Spencer said.

"Some of the reports show Solano County as one of the least affordable counties in California, and the reason is because they compare average job pay in the county to average home prices in the county," he continued. "What's a little bit misleading is that well over half the people in the county who own homes in the county work out of the county where the pay is higher."

He noted that many local residents commute to work elsewhere to afford the houses here.
"So higher paying jobs in Solano County do two things - they make housing more affordable for us here, and they also cure a lot of the transportation problems that we have," Spencer concluded.

The C.A.R. study's findings show the gap for California increased 44.9 percent during the first quarter of 2005 compared to the first quarter of 2004, when the gap stood at $41,660, the median household income was $52,320, and qualifying income needed to purchase a median-priced home at $407,710 was $93,980.

"At $100,000, the household incomes of repeat homebuyers are much greater than the population as a whole," C.A.R.'s Hamilton said. "Repeat buyers also are able to take advantage of equity gains in their current homes, with many making a down payment on their new home that's frequently greater than 20 percent. For those repeat buyers, the Housing Income Gap can fall as low as $23,320. Even though repeat buyers fare better than first-timers, that's little consolation to Californians spending a significant portion of their income servicing their monthly mortgage."

According to the C.A.R. report, potential homebuyers in the Central Valley, with a median household income of $41,040, had the smallest income gap at $32,660, and needed a qualifying income of $73,700 to purchase a median-priced home at $316,100.

The San Francisco Bay area had the highest gap in the state at $92,930, where potential homebuyers had a median household income of $67,770 but needed a qualifying income of $160,700 to purchase a median-priced home at $689,240.

Source: California Association of Realtors