Gregory J. Wilcox at the Los Angeles Daily News writes, “The median price of a previously owned home in the San Fernando Valley hit $600,000 in July, its highest level in eight years, and sales reached their highest total in 27 months, a trade association announced Thursday.
“The median price gained 15 percent, or $80,000 from a year ago, and is now 8 percent under the record high of $655,000 set in June 2007, according to the Van Nuys-based Southland Regional Association of Realtors.
“July’s median was the highest since $595,000 in September 2007, a time when the market was starting to unwind in the early stages of the Great Recession.”
Also by Gregory J. Wilcox at the Los Angeles Daily News is the other side of the story:
“Rising home prices across California have eroded affordability to the point that only seven counties, including San Bernardino, have housing that a family earning the median income can afford to buy, according to a study released Thursday.
“The analysis of second-quarter home prices and income levels in 32 counties by the Los Angeles-based California Association of Realtors found that 25 counties have housing stock priced out of the reach of families earning the median income.
“For example, less than 33 percent of the state’s inventory of available single-family homes, condominiums and town homes for sale was priced at or below what a household earning the California median income of $60,244 could afford, the association said.”
We may pat ourselves on the back for the gains that a home in the San Fernando Valley, and California as a whole, has made since the 2007 crash in housing and think it is a healthy housing market, but what kind of a real estate market do we have when half can’t afford the product and only a third of the houses for sale are affordable by those families?
Where will the buyers come from when the largest generation, the millennials, are still living with family or roommates in apartments that are barely affordable? Who will buy a home in the San Fernando Valley and elsewhere, above the median price, when it’s time to sell? Maybe, that’s why we have a lack of inventory. How many would say, “I couldn’t buy my house at today’s prices!” Somehow the rising house prices have become disconnected with the stagnant incomes of the middle-class.
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