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First-Time Buyers Make a Comeback
Posted by Leslie Eskildsen on Monday, February 2nd, 2009 at 9:15pm.Depressed Values for You, Buying Opportunity for Me!
It's old news that Real Estate prices in the United States, and particularly in California, have seen a severe downturn over the last two or three years, and Orange County has seen it's fair share of that downturn. The media is full of bad news stories about the Real Estate market, with "Bank Owned", "Short Sale", and "Foreclosure" out-pacing the not-so-distant-memory early-90's market.One silver lining in this cloud of bad news that doesn't get much discussion is affordability. Check out the chart below showing the California Association of Realtors' "First-Time Buyer Affordability Index":
Low Priced Homes are Driving the Market
For the first time in years, more than 50% of households in California, and almost 45% in Orange County, can afford to buy a home. It's sometimes easy to dismiss statistics such as this as meaningless in your own life, but this is one statistic that is very meaningful to the hundreds of buyers that are making homes priced under $500,000 a red-hot market. In October of 2008 about 80% of the homes sold in California went for that much or less - down from only 40% of the transactions as recently as July!
Of course, this also helps to explain the severe drops in the median home price, since homes priced over $500,000 account for only around 20% of the homes sold. No one knows when that "high end" market will loosen up, but now is the time for the first time buyer to take a close look at the opportunities!
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[...]are Hot A closer look shows that lower priced homes continue to drive the market, fueled largely by first-time buyers and investors. Sales of houses and condos under $400,000 jumped almost 187%, and those priced[...]
Posted on Monday, February 23rd, 2009 at 5:05 PM.