Study: Solano homes slightly more affordable
4 percent more houses for median incomes last quarter
By RACHEL RASKIN-ZRIHEN/Times-Herald staff writer
Vallejo Times Herald
Article Launched:02/24/2007 07:31:04 AM PST
Less than 15 percent of Solano County homes are affordable to people earning the median income here, and that's the good news, a new building industry study shows.
Between last Sept. 1 and Dec. 31, 4 percent more homes sold in Solano County were affordable to those earning the area's median income of about $62,000, the study showed. In December, the county's median home price was about $446,000. Someone earning the county's median income, depending on their credit score, bills, down payment and other factors, likely couldn't afford a home priced over $350,000, said Solano Association of Realtors president Jeff Dennis.
At 14.9 percent, the Vallejo area's fourth quarter affordability rating - the percentage of homes affordable to those earning the area's median income - rose from just under 11 percent the previous quarter, according to the study. But the area's slight affordability rating improvement won't likely mean much relief for first-time home buyers here, experts said Friday.
What it means, said Home Builders Association of Northern California president Joe Perkins, is that the dream of home ownership in the region remains dim for nonhomeowners.
The study ranked the nation's 52 least affordable metro areas, finding the Vallejo-Fairfield area 30th least affordable in the fourth quarter of 2006 - down from 24th the previous quarter.
Deana Vladic, spokeswoman for the California Building Industry Association which conducted the study, said the cooling housing market likely accounts for the affordability improvement. That aside, though, California remained the nation's least affordable state when it came to housing last year, she said.
"A slight improvement like that doesn't have much effect on affordability," Vladic said. "But after years of unprecedented appreciation of homes in California, the soft spot in the market, bringing affordability up a little, makes this a good time to buy a home, especially since interest rates are low."
But with only a small percentage of median income earners able to afford the median-priced home here, Perkins said pundits who predicted a slower housing market would help have been proven wrong.
"They suggested a softer housing market would help with affordability," Perkins said. "Well, it
hasn't. It makes it even less likely that the 40 percent of Bay Area residents who don't own a home, will ever be able to buy one."
The latest building industry study reveals that nationally, about 42 percent of homes are affordable to buyers earning the median income. By contrast, Napa ranked as the nation's fourth least affordable area in 2006's last quarter, with the median wage earner able to afford just over 4 percent of the homes there.
For the second consecutive year, Los Angeles has the dubious honor of ranking as the nation's least affordable area, with just 2 percent of the homes affordable to median income earners, the study shows.
E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.
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