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JTF CAHousingMarketJTF

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object(Timber\Post)#3711 (44) { ["ImageClass"]=> string(12) "Timber\Image" ["PostClass"]=> string(11) "Timber\Post" ["TermClass"]=> string(11) "Timber\Term" ["object_type"]=> string(4) "post" ["custom"]=> array(5) { ["_wp_attached_file"]=> string(26) "JTF_CAHousingMarketJTF.pdf" ["wpmf_size"]=> string(6) "118962" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(6135) "March 2012 www.ppic.org CALIFORNIA’S HOUSING MARKET Hans Johnson  Housing construction and prices are highly cyclical in California . The current housing bust is e specially severe, but booms and busts have characterized housing prices and construction in California for decades. This is partly because California has long been at the forefront of population growth and change in the United States , and the state ’s housing market is especially vulnerable when growth slows.  Housing construction has fallen to record lows. The past three years saw the lowest level of new home construction in California in at least four decades. I n 2005 , 209,000 permits for new housing units were issued; starting in 2008, the number of permits issued fell below 50,000 per year .  Between 199 6 and 2006, median housing values in California increased more than threefold . In 1996, the median home value in California was just over $150 ,000; by 2006, it had risen to over $500,000. Places that were expensive became even more expensive (median values reached $73 7,5 00 in the state’s most expensive metropolitan area, San Jose). And inexpensive places became expensive: median values increased about fourfold in the metro areas of Ri verside –San Bernardino Merced , and Stockton (see table).  Since the ir 2006 peak, housing values have declined dramatically . Statewide, median values have declined by more than 40% to their lowest level in eight -plus years , reaching $295,300 by Decembe r 2011. Most of the decline occurred between mid -2006 and mid -2009. The largest declines have occurred in some of the same inland metros that had experienced the biggest run-up in values, including Merced (69% decline), Modesto (65% decline ) and Stockton (65% decline).  Foreclosure rates remain high. Foreclosure rates have declined but remain high . More than 40% of homes sold in California in the third quarter of 2011 were either bank owned or in some stage of foreclosure. Moreover, larg e numbers of Californians are “underwater” (owing more on their houses than they are worth). According to CoreLogic, 30 % of California homeowners who have a mortgage were underwater in the third quarter of 2011, the sixth-highest percentage in the nation (after Nevada, Arizona, Florida, Michigan , and Georgia ).  Aff ordability has become widespread, but homeownership rates have declined . Low interest rates and declines in prices have led to high rates of affordability in many California metropolitan areas . Affordability levels are especially high in the state’s inland regions, with more than 80% of households able to afford an entry -level home. Even in the most expensive Bay Area counties (Marin, San Mateo, San Francisco, and Santa Clara), high incomes coupled with low interest rates mean that about half of households can afford an entry -level home. Even so , loans have become more difficult to obtain , and the homeownership rate in California has fallen from 60% of all occupied households in 2006 to 56% in 201 1; it remain s far lower than the rate in the rest of the nation (67% in 2011).  Rents have gone up and vacancies remain relatively low. California’s rental market has not seen the booms or busts that characterize the homeownership market. While the housing market was in decline from 2006 to 2011, rents increased throughout the state. Rents increased by more than 10% in the Bay Area and Orange County, and by more than 20% in the metropolitan areas of Los Angeles, San Diego, Riverside –San Bernardino , and Fresno. Only in the Sacramento metropolitan area were rents up by less than 10%. Vacancy rates in California (7.5% in 2010) remain well below those in the rest of the nation (10.2%)  Demography is on our side. H ousing demand should rise over the next decade , as the children of the baby boomers reach the prime ages for starting families and establishing households : t he number of Californians in their late 20s and early 30s will increase by about 25% . CALIFORNIA’S HOUSING MARKET March 2012 www.ppic.org The median v alue of houses in California peaked in 2006 Source: Zillow. The rise and fall of median home values in California’s metropolitan areas Region 1996–1997 minimum ($) 2005–2006 maximum ($) Current $ (December 2011) Min to max (% change ) Max to current (% change ) California 150,000 533,000 295,300 255 -45 Bakersfield metro 73,600 271,400 115,000 269 -58 Chico metro 94,000 299,100 172,000 218 -42 El Centro metro 83,600 261,200 120,200 212 -54 Fresno metro 83,200 294,700 132,000 254 -55 Hanford metro 71,700 192,300 100,700 168 -48 Los Angeles metro 164,800 616,300 383,100 274 -38 Madera metro 82,200 316,800 126,200 285 -60 Merced metro 85,200 351,100 107,200 312 -69 Modesto metro 96,800 368,100 129,400 280 -65 Napa metro 163,900 624,400 337,900 281 -46 Redding metro 92,000 278,200 147,100 202 -47 Riverside metro 97,500 402,200 178,700 313 -56 Sacramento metro 119,400 420,900 202,100 253 -52 Salinas metro 179,700 704,700 285,500 292 -59 San Diego metro 148,200 534,200 337,300 260 -37 San Francisco metro 210,300 700,900 464,000 233 -34 San Jose metro 232,900 737,500 544,500 217 -26 San Luis Obispo metro 158,000 583,600 360,900 269 -38 Santa Barbara metro 193,200 690,300 365,900 257 -47 Santa Cruz metro 201,500 726,700 462,100 261 -36 Santa Rosa metro 172,100 591,500 316,500 244 -46 Stockton metro 106,200 410,900 144,900 287 -65 Vallejo metro 129,200 472,900 185,300 266 -61 Ventura metro 168,300 558,800 371,000 232 -34 Visalia metro 78,300 229,000 112,200 192 -51 Yuba City metro 88,300 313,800 129,900 255 -59 Source: Zillow. S ources: Construction: U.S. Census Bureau. Median housing values : Zillow. Foreclosures: RealtyTrac , CoreLogic. Affordability: NAHB/Wells Fargo, California Association of Realtors . Rents: U.S. Department of Housing and Urban Development. Vacancy rates: U.S. Census B ureau. Population projections: California Department of Finance . Note: All dollar figures are in nominal terms. Contact: johnson@ppic.org $150,000 $533,000 $295,300 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000" } ["___content":protected]=> string(130) "

JTF CAHousingMarketJTF

" ["_permalink":protected]=> string(83) "https://www.ppic.org/publication/californias-housing-market/jtf_cahousingmarketjtf/" ["_next":protected]=> array(0) { } ["_prev":protected]=> array(0) { } ["_css_class":protected]=> NULL ["id"]=> int(8823) ["ID"]=> int(8823) ["post_author"]=> string(1) "1" ["post_content"]=> string(0) "" ["post_date"]=> string(19) "2017-05-20 02:41:10" ["post_excerpt"]=> string(0) "" ["post_parent"]=> int(4192) ["post_status"]=> string(7) "inherit" ["post_title"]=> string(22) "JTF CAHousingMarketJTF" ["post_type"]=> string(10) "attachment" ["slug"]=> string(22) "jtf_cahousingmarketjtf" ["__type":protected]=> NULL ["_wp_attached_file"]=> string(26) "JTF_CAHousingMarketJTF.pdf" ["wpmf_size"]=> string(6) "118962" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(6135) "March 2012 www.ppic.org CALIFORNIA’S HOUSING MARKET Hans Johnson  Housing construction and prices are highly cyclical in California . The current housing bust is e specially severe, but booms and busts have characterized housing prices and construction in California for decades. This is partly because California has long been at the forefront of population growth and change in the United States , and the state ’s housing market is especially vulnerable when growth slows.  Housing construction has fallen to record lows. The past three years saw the lowest level of new home construction in California in at least four decades. I n 2005 , 209,000 permits for new housing units were issued; starting in 2008, the number of permits issued fell below 50,000 per year .  Between 199 6 and 2006, median housing values in California increased more than threefold . In 1996, the median home value in California was just over $150 ,000; by 2006, it had risen to over $500,000. Places that were expensive became even more expensive (median values reached $73 7,5 00 in the state’s most expensive metropolitan area, San Jose). And inexpensive places became expensive: median values increased about fourfold in the metro areas of Ri verside –San Bernardino Merced , and Stockton (see table).  Since the ir 2006 peak, housing values have declined dramatically . Statewide, median values have declined by more than 40% to their lowest level in eight -plus years , reaching $295,300 by Decembe r 2011. Most of the decline occurred between mid -2006 and mid -2009. The largest declines have occurred in some of the same inland metros that had experienced the biggest run-up in values, including Merced (69% decline), Modesto (65% decline ) and Stockton (65% decline).  Foreclosure rates remain high. Foreclosure rates have declined but remain high . More than 40% of homes sold in California in the third quarter of 2011 were either bank owned or in some stage of foreclosure. Moreover, larg e numbers of Californians are “underwater” (owing more on their houses than they are worth). According to CoreLogic, 30 % of California homeowners who have a mortgage were underwater in the third quarter of 2011, the sixth-highest percentage in the nation (after Nevada, Arizona, Florida, Michigan , and Georgia ).  Aff ordability has become widespread, but homeownership rates have declined . Low interest rates and declines in prices have led to high rates of affordability in many California metropolitan areas . Affordability levels are especially high in the state’s inland regions, with more than 80% of households able to afford an entry -level home. Even in the most expensive Bay Area counties (Marin, San Mateo, San Francisco, and Santa Clara), high incomes coupled with low interest rates mean that about half of households can afford an entry -level home. Even so , loans have become more difficult to obtain , and the homeownership rate in California has fallen from 60% of all occupied households in 2006 to 56% in 201 1; it remain s far lower than the rate in the rest of the nation (67% in 2011).  Rents have gone up and vacancies remain relatively low. California’s rental market has not seen the booms or busts that characterize the homeownership market. While the housing market was in decline from 2006 to 2011, rents increased throughout the state. Rents increased by more than 10% in the Bay Area and Orange County, and by more than 20% in the metropolitan areas of Los Angeles, San Diego, Riverside –San Bernardino , and Fresno. Only in the Sacramento metropolitan area were rents up by less than 10%. Vacancy rates in California (7.5% in 2010) remain well below those in the rest of the nation (10.2%)  Demography is on our side. H ousing demand should rise over the next decade , as the children of the baby boomers reach the prime ages for starting families and establishing households : t he number of Californians in their late 20s and early 30s will increase by about 25% . CALIFORNIA’S HOUSING MARKET March 2012 www.ppic.org The median v alue of houses in California peaked in 2006 Source: Zillow. The rise and fall of median home values in California’s metropolitan areas Region 1996–1997 minimum ($) 2005–2006 maximum ($) Current $ (December 2011) Min to max (% change ) Max to current (% change ) California 150,000 533,000 295,300 255 -45 Bakersfield metro 73,600 271,400 115,000 269 -58 Chico metro 94,000 299,100 172,000 218 -42 El Centro metro 83,600 261,200 120,200 212 -54 Fresno metro 83,200 294,700 132,000 254 -55 Hanford metro 71,700 192,300 100,700 168 -48 Los Angeles metro 164,800 616,300 383,100 274 -38 Madera metro 82,200 316,800 126,200 285 -60 Merced metro 85,200 351,100 107,200 312 -69 Modesto metro 96,800 368,100 129,400 280 -65 Napa metro 163,900 624,400 337,900 281 -46 Redding metro 92,000 278,200 147,100 202 -47 Riverside metro 97,500 402,200 178,700 313 -56 Sacramento metro 119,400 420,900 202,100 253 -52 Salinas metro 179,700 704,700 285,500 292 -59 San Diego metro 148,200 534,200 337,300 260 -37 San Francisco metro 210,300 700,900 464,000 233 -34 San Jose metro 232,900 737,500 544,500 217 -26 San Luis Obispo metro 158,000 583,600 360,900 269 -38 Santa Barbara metro 193,200 690,300 365,900 257 -47 Santa Cruz metro 201,500 726,700 462,100 261 -36 Santa Rosa metro 172,100 591,500 316,500 244 -46 Stockton metro 106,200 410,900 144,900 287 -65 Vallejo metro 129,200 472,900 185,300 266 -61 Ventura metro 168,300 558,800 371,000 232 -34 Visalia metro 78,300 229,000 112,200 192 -51 Yuba City metro 88,300 313,800 129,900 255 -59 Source: Zillow. S ources: Construction: U.S. Census Bureau. Median housing values : Zillow. Foreclosures: RealtyTrac , CoreLogic. Affordability: NAHB/Wells Fargo, California Association of Realtors . Rents: U.S. Department of Housing and Urban Development. Vacancy rates: U.S. Census B ureau. Population projections: California Department of Finance . Note: All dollar figures are in nominal terms. 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