Affordable-Housing Crunch Worsened Slightly at Year’s End

The affordable-housing crunch in Orange County got slightly worse in December, the California Assn. of Realtors reported Monday.

The trade association estimated that only 14% of local households earned more than the $75,318 a year needed to buy the typical house, down 2 percentage points from November.

December’s figure was the lowest since January, 1984, when the trade association began tracking the numbers in Orange County.

But Orange County was not the least-affordable urban area in the state. San Francisco had that honor, as affordability dropped from 11% to 10% in December.

The Orange County affordability figures trekked downward all last year as local housing prices soared to among the most expensive in the nation.

Although the figures are only estimates, the trade association said a family needed an income of at least $75,000 a year to afford a monthly mortgage payment of $1,883 for the median-priced home in the county.

That home cost $237,114 in December. The monthly survey excludes new houses, which are more expensive on the average, and condominiums, which are less.

A year ago the same house cost $179,651, and 26% of local households could afford it.

In calculating its figures, the trade association assumes a 20% down payment and mortgage interest at the prevailing rates.

Meanwhile, the statewide picture improved slightly in December. Twenty-three percent of the state’s households could afford the median home price of $172,405, up from 21% in November. That was partly because home prices dropped during the normal fall slowdown in sales.

The improvement in the number of people who can afford a house is not likely to last long, said Joel Singer, chief economist for the trade association.

“Because of the unusually low level of inventory, we will again see accelerating prices and diminishing affordability early in 1989, particularly if interest rates continue their upward trend.”

AFFORDABILITY INDEX FOR EXISTING HOMES

Fourteen percent of Orange County households could afford to buy the median-priced resale home in the county in December, contrasted with 16% in November, 1988, and 26% in December, 1987.

Median Monthly Selling Price Mortgage Payment Dec. Nov. Dec. Dec. Nov. Dec. 1988 1988 1987 1988 1988 1987 Orange County $237,114 $230,701 $179,651 $1,883 $1,815 $1,389 United States 87,700 88,000 84,400 696 692 653 California 172,405 177,485 145,224 1,369 1,396 1,123 S.F. Bay Area 229,772 225,561 175,063 1,825 1,1774 1,353 Los Angeles 189,545 191,771 153,308 1,505 1,508 1,185 San Diego 156,666 159,477 134,032 1,244 1,254 1,036 Riverside/ 113,864 112,360 98,450 904 884 761 San Bernardino

Minimum Percent Annual Income Qualified Dec. Nov. Dec. Dec. Nov. Dec. 1988 1988 1987 1988 1988 1987 Orange County $75,318 $72,580 $55,558 14 16 26 United States 27,857 27,685 26,101 47 48 50 California 54,764 55,838 44,911 23 21 31 S.F. Bay Area 72,986 70,963 54,139 10 11 17 Los Angeles 60,208 60,332 47,411 16 16 26 San Diego 49,764 50,173 41,450 23 22 29 Riverside/ 36,168 35,349 30,446 38 39 45 San Bernardino

Source: California Assn. of Realtors