Are you equity rich?
More than two of every five homeowners in California are considered equity rich, owing less than 50% of the estimated market value of their home.
The boost in equity, thanks to record-high home prices and owners staying in homes longer, greatly helps the economy, allowing consumers to spend and save.
The aptly named Golden State’s 43.6% equity rich share was the highest in the nation, outpacing Hawaii (39.3%) and third-place New York and Washington state, both at 34.2%, according to ATTOM Data Solutions.
California had four of the five counties with the highest share of equity rich homeowners, led by San Mateo County at 75.9% and second-place Santa Clara’s 73%.
“With homeowners staying put longer, homeownership equity will most likely continue to strengthen,” says Todd Teta, chief product officer with ATTOM Data Solutions.
Nationally, 25.6% of homeowners — about 14.5 million families — are considered equity rich. The current share of equity rich homeowners is down slightly from the 25.7% in third-quarter 2018 and off the record 26.5% in third-quarter 2017.
Check the equity rich share by cities.
Photo of San Jose subdivision by PBK-PG/Shutterstock
Many buyers see tiny homes as a big pain
Tiny homes get big-time attention on cable networks, with hit shows on HGTV and the FYI Television Network.
But the belief that cost-conscious and environmentally aware buyers would embrace pint-sized homes — those 500 square feet or less — has definitely missed the mark, according to a PropertyShark report.
Tiny homes accounted for only about 2% of sales during the past eight years in New York City and San Francisco, the largest percentage in the nation.
And tiny home sales were only 0.9% in San Diego, the second-largest percentage in California, while Los Angeles had a paltry 0.5% of tiny home sales. San Jose, the epicenter of the housing crunch in the state, had virtually no tiny home sales.
Yep, most homebuyers need more space and want to skip chemical toilets and climbing a ladder to get into bed.
In fact, a large majority of homebuyers in California — 74% in San Diego and 94% in San Jose — prefer homes of 1,000 square feet or more.
Photo of tiny home by BondRocketImages/Shutterstock
About the author
Ron Trujillo, an award-winning business journalist-turned-public relations executive, is the editor-owner of CalHomeNews and can be reached at firstname.lastname@example.org.
More high-income earners are renting rather than buying
High-income families are becoming a much-larger larger percentage of renters in California and nationwide, as fast-rising home prices are causing more consumers to hold off on purchasing.
Nationally, high-income renters — those earning more than $150,000 per year — increased by 1.35 million during the past decade, according to RENTCafe. High-income renters jumped 175% between 2007 and 2017, easily the fastest-growing segment nationwide.
San Francisco and Los Angeles have the second- and third-most high-income renters at 71,000 and 67,000, respectively. New York City has 249,000 high-income renters.
More than 30% of San Francisco renters earn more than $150,000, followed by 21% in San Jose, the largest percentages in the U.S. San Francisco has more high-income renters than homeowners who earn $150,000 or more, according to the report.
Of course, consumers earning $150,000 may be considered high-earners nationwide and even in several regions of the state, but buying a house in the Bay Area or even Southern California is tough. The average San Francisco buyer needs to earn at least $327,000 in order to qualify for a mortgage to purchase the median-priced home. In Los Angeles, the income needed is about $125,000, according to the California Association of Realtors.
Photo of apartments by Vladislav Gurfinkel/Shutterstock
More peaceful days in the housing market as bidding wars decline
Bidding wars and big-time competition for homes declined during the past year, as more homes arrive on the market and fewer consumers are willing to pay top dollar for homes.
Only one in every eight homes, about 13%, attracted multiple offers in January, a dramatic drop from the 53% a year ago, according to industry tracker Redfin.
California had the largest decline in bidding wars for homes, with the Bay Area down 64 points — 18% in January vs. 82% a year ago — followed by the 57-point plunge in Los Angeles.
San Diego — the nation’s second most-competitive market at 18%, behind only Denver and Portland — was off 45 points. Sacramento, one of the hottest housing markets in the nation, has cooled off, with only 11% of homes listed getting multiple offers.
It should be noted, the data is based only on Redfin-served markets. The company tracks many, but not all, markets nationwide.