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Want to buy a house? Go elsewhere

"At some point you run out of buyers willing to pay these prices.”

New numbers on home sales released this week might suggest to some the signs of a market approaching its latest peak. Real-estate industry talking heads are scrambling to inject some optimism as summer, which typically brings a much stronger sales market, approaches.

In May, new data reveals, overall housing sales declined for the tenth straight month as compared to the same month a year ago. Sales volume is on track to reach a low last seen in 2007, the first full year of the late-2000s housing meltdown.

A median-priced home is affordable for the median-income resident in only eight of California's largest counties — San Diego is not among them. Indeed, housing prices are approaching and in some cases even surpassing their pre-bubble levels. Suburbs such as El Cajon, Lemon Grove, Poway, and San Marcos have seen price spikes of 20 percent or more in the past year.

"While home price increases have tempered over the past few months, prices are still nearly 12 percent higher than a year ago," said California Association of Realtors economist and vice president Leslie Appleton Young in a release, admitting that the situation "is presenting affordability challenges to home buyers."

Even people who are interested in buying in the face of these numbers are having trouble. New, stricter lending standards introduced at the beginning of the year are resulting in more borrowers being turned away at their banks. Rising private mortgage insurance (PMI) rates paid by borrowers with less than 20 percent of a home's price for a down payment are negating otherwise low interest rates.

"Real estate prices continue to march higher on declining sales volume which is an unhealthy combination," says Madeline Schnapp, a research director for market tracking firm PropertyRadar. "At some point you run out of buyers willing to pay these prices, setting the stage for a decline in sales volume, which we are already seeing, and later for the possibility of a price correction."

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New numbers on home sales released this week might suggest to some the signs of a market approaching its latest peak. Real-estate industry talking heads are scrambling to inject some optimism as summer, which typically brings a much stronger sales market, approaches.

In May, new data reveals, overall housing sales declined for the tenth straight month as compared to the same month a year ago. Sales volume is on track to reach a low last seen in 2007, the first full year of the late-2000s housing meltdown.

A median-priced home is affordable for the median-income resident in only eight of California's largest counties — San Diego is not among them. Indeed, housing prices are approaching and in some cases even surpassing their pre-bubble levels. Suburbs such as El Cajon, Lemon Grove, Poway, and San Marcos have seen price spikes of 20 percent or more in the past year.

"While home price increases have tempered over the past few months, prices are still nearly 12 percent higher than a year ago," said California Association of Realtors economist and vice president Leslie Appleton Young in a release, admitting that the situation "is presenting affordability challenges to home buyers."

Even people who are interested in buying in the face of these numbers are having trouble. New, stricter lending standards introduced at the beginning of the year are resulting in more borrowers being turned away at their banks. Rising private mortgage insurance (PMI) rates paid by borrowers with less than 20 percent of a home's price for a down payment are negating otherwise low interest rates.

"Real estate prices continue to march higher on declining sales volume which is an unhealthy combination," says Madeline Schnapp, a research director for market tracking firm PropertyRadar. "At some point you run out of buyers willing to pay these prices, setting the stage for a decline in sales volume, which we are already seeing, and later for the possibility of a price correction."

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Comments
1

OH NO, the answer is for more taxpayer-backed loans and more programs to hand out more money to more people so they can participate in the American Dream! Everyone deserves a house at the beach! Let's stop this nonsense with a measly $13 minimum wage and make it $75 an hour so everyone can buy a house!

June 23, 2014

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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