OC climbs to one of least affordable places to live in U.S.
Monday, February 22, 2010
Home prices rose in 2009, bringing OC near the top of the list for unaffordable places to live.
As home prices picked back up in 2009, Orange County climbed toward the ignominious position as one of the least affordable places to live in the U.S.
The recently released National Association of Home Builders/Wells Fargo Housing Opportunity Index ranks OC the fifth least affordable metropolitan area in the nation in terms of housing prices compared to salaries.
The rest of the nation, meanwhile, remained near record levels of affordability, the report shows.
Experts say low housing affordability is hard on the local economy because companies have a difficult time attracting employees. Also, many of the county’s “workforce” employees — people like teachers and firemen — will have a harder time finding a home close to their jobs.
Affordability, or median income compared to the median home price, worsened in OC during 2009: During the first quarter, 48.2 percent of the homes sold were affordable to families earning the median income of $86,100, while in the fourth quarter only 34.5 percent of the homes sold were affordable, according to the report.
That places OC just behind Honolulu in the rankings.
Nationwide, 70.8 percent of all homes sold in the fourth quarter were affordable to families earning the national median income of $64,000, near the record-high 72.5 percent set during the first quarter of 2009.
OC jumped in the rankings last year. Throughout 2008, the county was around the 10th least affordable area in the U.S., but steadily worsened after the first quarter of 2009. One reason may be that Orange County has relatively fewer inexpensive homes than other areas. So the low-end homes, which were more likely to have been foreclosed, have already sold, and more expensive homes are now trading hands, said Patrick S. Duffy of MetroIntelligence Real Estate Advisors.
Tags: affordablity, home prices, housing, OCLNN, Real Estate
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