Interesting Data from 2010 Housing Market Forecast

I was reading over CAR’s 2010 Housing Market Forecast Presentation today and came across some interesting data I wanted to share.

When did the housing market peak? In the San Francisco Bay area, it peaked in the summer of 2007, specifically, May 2007, when the median home price reached $853,910! As of August 2009, it decreased to $531,580 or a reduction of 37.7%.

Fig. A

Anecdotally, many of us who list homes see a lot of cash offers being made recently, especially towards the lower end of the price spectrum. What percentage of buyers are actually making all cash offers? In California, in 2009. 19.6% of buyers are coming in with all cash.

Figure B

Why are buyers purchasing now rather than at other times? 67% of buyers said it was due to lower prices while 39% attributed lower interest rates.

Figure C

Directly related to the notion of “lower prices” is the Housing Affordability Index which measures the percentage of buyers who can afford to purchase an average home in California. It just fell shy 70% in August of 2009. This means for the first time in this decade, approximately 70% of Californians can afford to purchase an average home. This figure corresponds almost exactly with the 67% of those who purchased homes this year believing low prices prompted them to bite the bullet.

Fig. D