More San Diegans Are Able To Afford To Buy A Home
San Diego has become affordable to a larger percentage of residents.
Could this mean that the San Diego real estate market has hit bottom? For those of us that are native to San Diego or have been here for more than 30 years we’ve seen some ups and down in the San Diego housing market. This last on though proved to be much more serious than others in the past.
This time around we saw our entire financial system crippled to it’s knees and almost collapsed completely. So this bit of news is fantastic for the San Diego real estate market who saw affordability fall under 20%. The new home affordability percent has improved to a more desirable level of 51.1%. This is great news because one of the factors of the real estate collapse was that prices were outpacing salaries at an alarming rate. Who cares if homes appraise if no one can afford them thus the invention of creative financing options. We all know where that led us.
There are certain factors considered when arriving at this level of affordability some of which are:
- It is based on the purchase of a median priced home. (now standing at $325,000 in San Diego county for attached and detached.)
- The household is earning the median income for San Diego county which is $75,000.
- With a 10% down payment.
- And last but not least a debt to income ration of about 28%.
Though this seems like it would potentially leave 49% of the residents of San Diego county unable to purchase a home you must take into consideration that this is based on the median home price. If you were to consider the purchase of a residence such as a condominium, twin home, row home or townhome you would find that they are more affordable and are a great way into the San Diego real estate market. In some case the mortgage payment is equal to ro less than your current rent. Also keep in mind that there’s the potential to differ capital gains if your property appreciates in value and you sell it later. There are regulations to this opportunity of course one of which is the continuous habitation of the property as your primary residence for two years.
At the end of the day there are other places that are more affordable than San Diego but they’re not San Diego. If you plan to make San Diego the place you’re going to live the rest of your life this is the best time to purchase a home in San Diego given the current state of the San Diego real estate market. Prices might be down and things might go down a bit more but the next time you’re talking to a long time resident and home owner ask them how much they payed for their home and imagine how much your home will be worth if you hold onto it for the same amount of time as the person you’re talking to?
