One of the weekly emails I receive and read from the CALIFORNIA ASSOCIATION OF REALTORS® is C.A.R. Newsline. Their most headline caught my attention not only from the headline but also to the fact they said Napa being the lowest in the entire United states of how the recent home price increases have priced people out of the market.
The truth, Napa’s median price increase for July 2013 vs July 2014 is up $90,000. Does this mean 171 families have been priced out of the market here due to the price increase in home values, or does this mean anything. Given the number of home sold in July 2104 was 155 compared to 136 for July 2013, I feel this is another statistic one has to read thoughtfully. If this fact was totally true, in about another month or two, no one buying here would be able to afford to do so. The facts just don’t support this and at some point you need to look beyond and determine what works for you.
$1,000 INCREASE IN HOME PRICES KEEPS MORE THAN 200,000 OUT OF THE MARKET
Each $1,000 increase in the cost of a new, median-priced home forces 206,000 prospective buyers out of the marketplace, according to a new study by the National Association of Home Builders (NAHB). The number of households affected varies across states and metro areas and largely depends on their population, income distribution, and new home prices.
Among the states, the number of households that would no longer be eligible to qualify for a mortgage based on a $1,000 increase to a median-priced home ranges from a low of 313 in Wyoming to a high of 18,250 in Texas.
The analysis found that every $833 increase in fees paid during the construction process – such as the price of a construction permit or an impact fee – adds an additional $1,000 to the final price of the home.
Measured by local metro areas, the number of households who would be priced out of the market based on a $1,000 increase range from a low of 19 in Napa, Calif. to a high of 5,742 in the New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. area.