Only 33% Can Afford to Buy Local Homes

It’s getting more difficult to buy a home in Ventura County--a goal that now only about one in three families can obtain.

A study released Thursday by the California Assn. of Realtors found that 33% of households countywide can afford to buy a median-priced, detached single-family home, down from 40% a year ago. The findings are based on housing statistics and income data from the past two Novembers.

“This is no surprise to any of us,” said Mark Schniepp, director of the California Economic Forecast Project in Santa Barbara and an expert on Ventura County’s economy.

“We’re not building enough to meet the existing [population] growth and demand caused by the very strong economy the last five or six years in Ventura County.”

In November 1999, the median price of a house in Ventura County was $253,883, but by November of last year, it had climbed to $293,370, the study found. That means that home price increases outpaced income growth. And mortgage rates, which were just above 7.6% in November 1999, were 7.8% a year later, the study found.

All those factors combined put the level of affordability at about its worst since January 1990, Schniepp said, when only 17% of county residents could afford to buy a median-priced house.

Still, Ventura County’s affordability situation is about average by California standards. Only 31% of families in the state can afford to buy their own house today, a smaller share than a year ago. The median price of a house in California as of November was $251,755.

Nationwide, the median price of a house was $139,900, making purchases affordable for about 54% of Americans.

In Los Angeles County, the affordability rate is 34%. In Ventura County’s exclusive neighbor to the north, Santa Barbara County, the market has shut out all but 14% of households. In San Francisco County, only one in 10 can afford to buy.

Areas that are still considered affordable include the High Desert, at 70%, and Riverside and San Bernardino counties--at 47%. Even so, these areas are less affordable than they were a year ago.

Now, 30-year, fixed-rate mortgages have dipped below 7%. That should slow the deterioration in affordability, said Leslie Appleton-Young, chief economist for the realty association. But it doesn’t look like enough to offset the price increases altogether, she added.

Schniepp said those waiting for the market to tank as it did a decade ago may be disappointed: “If anyone is holding out for prices to drop sharply before they buy, they may be holding for an awfully long time.

“In most economic downturns, the housing market is one of the first sectors to soften. But that does not appear to be operating in this economic cycle because people need housing and we hardly have any supply.”

Douglas A. Tapking, executive director of Ventura County’s Area Housing Authority, said housing prices were so high even a year ago that many would-be buyers had already given up.

People who already own homes with equity can still afford to upgrade to nicer homes, he said. The problem lies primarily with first-time home buyers.

“Many people simply don’t have the ability today to make their down payment,” he said. “They can scrimp and make the mortgage, but coming up with 10% on a $300,000 home is impossible.”

The latest batch of prospective buyers being squeezed out are facing a shortage of rental housing that has, in turn, shot rents higher. Tapking’s agency subsidizes the cost of housing for 2,800 households countywide and has a three-year waiting list for another 2,200.

“A lot of cities are looking at the issue--Thousand Oaks, Simi Valley, Moorpark, Camarillo,” Tapking said. “But I can’t tell you that anyone has a corner on the market for a solution yet.”

Pat Patterson, president of a real estate firm serving western Ventura County, said that regardless of the price increases, there are still affordable homes to buy.

While the median price for a single-family home in November was $293,370, the overall median home price, which also includes townhomes and condominiums, was $266,000. And there are nice two- and three-bedroom townhomes and condos in Port Hueneme and Oxnard for about $175,000, he said.

Meanwhile, buyers are finding ways to get around income limitations when it comes to financing, Patterson said. Some opt to buy mobile homes. Others persuade friends and relatives to co-sign for their mortgages.

“Some of these lenders will allow four or five people to co-qualify,” he said.

To pay the mortgage each month, some owners rent out rooms or buy duplexes and rent out half the property.

“If you’re going to be here awhile, anything is better than renting,” he said.