By Nef Cortez
The Diamond Bar Median Household income has continued to rise to the level where it has now surpassed the national average by more 52%. The national median household income stood at $59,039.00 as per the last figures available from the U.S. Census. The same data source reported the Diamond Bar number at $89, 845.00.
Last week’s comparison between the California Median Sales Price of a single family home and the Median Sales Price of homes in neighboring states highlighted some major differences. The cost of housing on a straight line comparison of the Median Sales Price of homes in California as compared to Texas showed a 150% higher cost in California. How much more affordable is housing there when compared to the Median Household Income?
The ratio between the Median Sales Price of a single family home and the Median Household Income for California is 8.6 to 1. The ratio for Texas, in comparison, is 4.1 to 1. That means that the homes are selling for a multiple of 8.6 times the annual household income in California, or twice as much as they are in Texas.
One of the “comeback statements” to this affordability differential is the job market. “Sure, homes are more affordable, but there are no jobs there!” is a common retort in conversations about housing costs in different regions. The job market in fact shows that the unemployment rate in Texas sits at 4.1 versus California’s 4.2. The job market in Texas appears to be as good as or better than California’s.
The conclusion is that California housing stock is definitely out of line with the populace’s ability to pay. At a certain point, the housing affordability issue will “rise its head” and negatively impact the housing market. As prices continue to increase in California, we get closer and closer to that point in time. Stay tuned!!!
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 www.nefcortez.com. Please feel free to email any questions regarding real estate.