High-end housing’s rise, fall
By Ron Trujillofirstname.lastname@example.org
When it comes to high-end homes, California is a tale of two cities.
The average price for a high-end home – considered the top 5% of the market – increased 4.2% to $1.65 million nationwide during the first quarter compared to the same three-month period in 2016, according to Redfin.
San Francisco – where the average home price is close to the national high-end price – had a 19.9% increase at the top end of the market, the sixth-largest gain in the nation. The average high-end home in San Francisco was $5.29 million during the first quarter, more than three times the national rate.
That compares to a much lower 4.6% gain for the rest of the housing market in San Francisco, where the average price was $1.27 million, according to Redfin. What does the almost 20% increase show? Competition for high-end homes is just as strong as the overall market in San Francisco.
Meanwhile, San Diego had the sixth-largest decline in high-end home prices in the nation during the first quarter compared to a year ago.
The city’s average high-end price declined 3.6% to $2.38 million, while the overall market gained 9.5% to $578,000.
Feature photo of Bay Area Menlo Park home by Krista Abel/Shutterstock. San Diego photo by Dancestrokes/Shutterstock.
Granny flats could help first-time buyers
California’s critical housing shortage and fast-rising home prices have prompted lawmakers to recently approve two bills that will help entry-level homebuyers and those looking for lower-priced rentals.
State lawmakers have eased city and county ordinances that banned homeowners from building accessory dwelling units on their properties. The bills relaxed height restriction and set-back requirements, and even reduced or eliminated off-street parking regulations.
So, more homeowners can build granny flats and in-law quarters to boost their income and help with the housing crunch, according to state officials.
The California Housing Finance Agency (CalHFA) has announced that rental income from granny flats and in-law units will be considered when consumers apply for loans, which could make a difference in the approval process. The move, which went into effect May 1, increases the loan-to-income ratio for homebuyers.
“We are always looking for creative ways to help more Californians find a place to call home, which is why we are taking this step to help more buyers qualify for our loan products,” said Tia Boatman Patterson, CalHFA Executive Director. “What we are doing today is increasing financing options for first-time homebuyers purchasing a home with an existing accessory dwelling unit.”
Granny flat photo by Artazum/Shutterstock.