Incomes in California Increasingly Lagging Behind Escalating Home Prices - 12/13/2004 - Real Estate House Home Condo

Incomes in California Increasingly Lagging Behind Escalating Home Prices

In this year’s third quarter, a household with a median income of $52,940 needed an additional $55,370 in annual earnings to reach the $108,310 qualifying income needed to purchase a median-priced home of $462,510, according to the association’s quarterly Homebuyer Income Gap Index.

The gap between California’s median household income and its median-priced, single-family home grew by 47.9% from the third quarter of 2003, the index found. In last year’s third quarter, the gap was $37,440 to reach the $89,070 income needed to purchase a median-priced home at $385,720.

According to the report, the state’s Central Valley offers the most affordable housing options overall. The area’s median household income of $40,640 was $27,030 short of the $67,670 needed to buy a median-priced home of $288,960.

Conditions were most discouraging in the San Francisco Bay Area, where potential home buyers with a median household income of $68,430 needed $82, 910 more to reach the $151,340 in income needed to purchase the area’s median priced home at $646,280.

In October, the median price of an existing home in California was 21.4% higher than a year earlier, the Realtors® reported last month. Unsold inventories were up to a four-month supply, roughly twice as high as a year earlier.