Real Estate News for Tuesday, November 1st, 2005

Hope everyone had a fun Halloween, but now we all have to get back to work... so here's today's news!

California households are nearly $74,000 short of the $127,950 qualifying income needed to purchase a median home in the state, according to the California Association of Realtors Homebuyer Income Gap Index report for the third quarter of 2005, released today. According to the report, potential home buyers in the Central Valley, with a median household income of $41,460, had the smallest income gap at $43,170, and needed a qualifying income of $84,630 to purchase a median-priced home at $361,090. The San Francisco Bay Area had the highest gap in the state at $100,670, where potential home buyers had a median household income of $68,520 but needed a qualifying income of $169,180 to purchase a median-priced home at $721,850. Click here to read more.

The economic outlook for 2006 looks a lot like it has been in 2005 – slow, steady growth – but that picture could darken if interest rates rise too high or the housing market tumbles, a panel of economists told a conference of the San Diego Regional Chamber of Commerce yesterday. But Christopher Thornberg, economist with the Anderson Forecast of the University of California Los Angeles, downplayed the effect of interest rates on the economy. He was more concerned by a potential slowing of the housing market. "All of the prosperity that we've experienced over recent years has a single root: real estate," he said. "Where real estate goes, so goes the California economy." Over the past several years, employment growth in California has been tied to the continuing growth of the housing market. The fastest growing job segments have been construction, credit and retail. "That reflects people building new homes, financing new homes and furnishing their homes," Thornberg said. Thornberg does not expect homes to dramatically lose value. Instead, he predicts that within the next couple years, home prices will stop growing at their double-digit rates and grow a percent or two above the inflation rate, which is now about 2 percent. Click here to read more.

~Tina Jan~
Coldwell Banker Kivett-Teeters
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