This week Pete Carey, in the Mercury News, wrote about the dwindling prospects of housing for buyers in the lower end of the market in the Silicon Valley. While we’re coming to the end of the year, a characteristically slower time, many buyers don’t see much of an improvement in their situations; because of cost and inventory. If you’re thinking about buying a home in the Silicon Valley, reach out to The Dawn Thomas Team today.
“As the peak homebuying season ends, months of rising prices, tight inventory and competition from investors have left many would-be first-time buyers on the sidelines.
Prices are up an astonishing 31.7 percent in August from a year ago for all types of homes in the nine-county Bay Area, and for moderate-income buyers that represents a growing hurdle.
And the slice of home sales for less than $500,000 has dropped from a combined 59.1 percent to 42.2 percent in August in Contra Costa, Alameda, San Mateo and Santa Clara counties, according to real estate information company DataQuick. Homes under $300,000 are down from a combined 29.7 percent in the four counties to 15.2 percent[...]
“It’s pretty terrible out there,” said Matt Huerta, chief executive officer of Neighborhood Housing Services. “It’s impossible for moderate-income families.” Home affordability has dropped for first-time buyers of starter-priced homes, according to the California Association of Realtors. The percentage of first-time buyers who could afford to buy in the Bay Area fell from 66 percent in the first quarter of 2012 to 45 percent in the second quarter of this year, the association reported.
“You need a full spectrum of workers to support a community and the big cut in housing affordability is a concern, a big concern,” said Leslie Appleton-Young, chief economist for the Realtors group. “Also you’ve got a fairly tight rental market with no vacancy and rents going up.”
The number of lower- to middle-income people who want to buy a home is actually increasing, said Kevin Zwick, CEO of the Housing Trust Silicon Valley, which offers down payment and second mortgage loans to first-time buyers. The turnout for the Trust’s homebuyer workshops “is larger than ever,” Zwick said, “and all of them can qualify for a home up to $500,000. They simply can’t buy, because there are too few homes.”
“This is the toughest market in the 13 years we have been making loans,” he said. “It’s never been this tough for families earning less than $100,000 a year. It’s the lack of inventory that is creating this mini-bubble here. Prices will come down when there are more homes on the market.”
Though inventory is improving slightly, months of rising prices sidelined many buyers, said Craig Ragg, president of the Bay East Association of Realtors and a Castro Valley real estate professional. “Many people fell out of the market because of that,” he said. “There are people that had to give up, and that did give up. They just got priced out of the marketplace.” But prices are just one challenge facing people who can only afford a lower-priced home. Interest rates are nearly 1 percent above where they were in May[...]”
Click HERE to read the entire article from Mercury News
*photo courtesy of Mercury News
This blog is courtesy of The Dawn Thomas Team who is an award-winning Real Estate Agent team at Intero Real Estate Services in Los Altos 650-701-7822. We help nice people with selling and buying homes in the greater Silicon Valley and Beyond!