Saving for a home? It’s going to take a lot more time
By Ron Trujilloemail@example.com
Silicon Valley may boast the biggest paychecks, but homebuyers need every one of those dollars for a down payment.
San Jose-area homebuyers looking to save 20% for a down payment need 13.3 more years today compared to 1988, according to a Zillow report. California had four of the cities with the largest increase in years needed to save for a 20% down payment compared to three decades ago — Los Angeles (9.5 more years today), San Francisco (8.5 years) and San Diego (7.3 years).
The national average was 7.1 years more compared to 1988.
Homebuyers looking to purchase in Sacramento and Riverside required 4.8 more years — the seventh- and eighth-largest increase in the nation. Seattle and Portland (Ore.) finished in fifth and sixth place.
Homebuyers, especially those in their 20s and early 30s, have a serious disadvantage saving for a home today — rents take 28.4% of income now compared to 25.8% in 1988 — and a four-year degree at a public university costs 231% more today than in 1988.
Foreclosure rates a mixed bag in CA
A booming economy, bigger paychecks and hefty equity gains dropped the national third-quarter foreclosure rate to the lowest level since fourth-quarter 2005, the period before the previous housing boom went bust.
ATTOM Data Solutions reported 177,146 homes entered foreclosure proceedings during the third quarter, a 6% decline from the second quarter and 8% lower than a year ago. It’s the eighth-consecutive quarter below pre-recession foreclosure levels, the latest evidence of a still-strong housing economy despite signs of a slowdown.
“A decade after poorly underwritten mortgages triggered a housing market crash, it’s clear that the foreclosure risk associated with those problem mortgages has faded — average foreclosure timelines have dropped to a two-year low, and the share of foreclosures tied to 2004-to-2008 loans had dropped well below 50 percent,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.
Most California cities followed the national trend, with foreclosures falling, including down 18% in Bakersfield, 11% in Sacramento and 10% in San Francisco.
But amid the good news, there are some signs of a softening market in a few regions. Santa Barbara-Santa Maria had a 20% increase in foreclosures, while Los Angeles and San Diego were up 2% and 4%, respectively.
Certainly, not a huge concern, but something to keep watching.
Santa Rosa had a 61% increase in foreclosures during the third quarter. However, many of those foreclosures stem from the devastating wildfires last fall.
Click the interactive map below to check how your city fared with foreclosures during the third quarter.
Photo of foreclosure sign by Jeff Turner/Flickr
Fast-moving spring home sales slow in late summer
Bidding wars and multiple offers dominated in many California markets during the spring, but they have definitely slowed in recent weeks.
Two of every three homes listed in San Jose entered escrow within two weeks on the market in March and April, but has dropped to 31% Aug. 13 through Sept. 9, according to Redfin.
Oakland, San Francisco and Sacramento had similar declines compared to spring 2017, spring 2018 and the final weeks of summer.
Photo of Menlo Park home by Krista Abel/Shutterstock
- Percent of homes sold within two weeks (March 5-April 29, 2018) 66% 66%
- Percent of homes sold within two weeks (Aug. 13-Sept. 9, 2018) 31% 31%
- Percent of homes sold within two weeks (March 5-April 29, 2018) 61% 61%
- Percent of homes sold within two weeks (Aug. 13-Sept. 9, 2018) 38% 38%
- Percent of homes sold within two weeks (March 5-April 29, 2018) 54% 54%
- Percent of homes sold within two weeks (Aug. 13-Sept. 9, 2018) 40% 40%
- Percent of homes sold within two weeks (March 5-April 29, 2018) 50% 50%
- Percent of homes sold within two weeks (Aug. 13-Sept. 9, 2018) 32% 32%