By Nef Cortez
The Diamond Bar housing market has achieved a median sales price which is at an ALL TIME high!
The roller coaster ride that has been housing sales prices in the last 30 years is now achieving new record high levels. Factors that drive this market to its current high include a shortage of inventory, historically low levels of mortgage interest rates, continuing in migration of foreign nationals, and a strongly surging economy.
Exciting as it is for the current property owners, it is becoming increasingly difficult for many buyers to find what they are looking at an affordable price.
The median sales price last reported by the California Regional Multiple Listing Service (CRMLS) for Diamond Bar Single Family homes in the 4th quarter of 2017 was $745,000.00. Seeing an annualized increase of 11% in the median sales price for Diamond Bar homes brings up the question of affordability.
The surging economy notwithstanding, we are not seeing annual wage increases of 11%. The wage increases have to keep up with the rate of increasing sales prices, or housing reaches its breaking point of affordability. The current US Census figures report (the last surveyed years of 2012-2016) a median household income for Diamond Bar households to be $89,845.00.
With the median household income as it is the obvious question is; how many Diamond Bar households can actually afford to buy a home? The purchase of the median priced home would typically require a down payment of 20 % of the purchase price, which in this example would be $150,000.00. The loan balance would be just under the Jumbo loan limits at $600,000.00, carrying an interest rate of approximately 4.375 %, with an APR of 4.375%. The payment of principal and interest on this loan would be $2,996.00, taxes would be $782.00, and Homeowner’s Insurance an additional $80.00 per month, for a total of $3,858.00 (PITI). Conforming guidelines (FNMA and FHLMC) for loan qualifying require that no more than 28% of the household income be utilized for housing cost, in this case it would represent a monthly income of $13,778.00 necessary to qualify. This monthly income represents an annual household income of $165,000.00 necessary to qualify for the median priced single family home in Diamond Bar, or almost twice as much as the current level of the median household. Wow!
This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at firstname.lastname@example.org or website http://www.nefcortez.com. Please feel free to email any questions regarding real estate.
Broker DRE # 00560181
RE/MAX Universal Realty
1411 S. Diamond Bar Blvd.,
Diamond Bar, Ca. 91765
Certified REO Broker
Certified Distress Property Expert