The Orange County Association of Realtors (OCAR) published an eye-opening article on affordabilityÂ in this month's issue of Orange County Realtor.
Houses are more affordable today than they've been for 13 years. Let me show you what I mean.
In 1999 the median sales price for a detached single family home in Orange County was $280,900. Interest rates back then averaged at 7.4%, so the payment for that home was $1945.
Payments went up steadily from there. In 2002 (only 3 years later) it cost $2560 per month to buy that same home.
In 2006 and 2007 that number was $4461 and $4392, respectively. This for a house that was 7-8 years younger and over $2300 cheaper in 1999.
Last year in 2011 the monthly payment for that home was $2399.
Because interest rates are so low (for now), and because of the price dip real estate has seen, houses in 2012 are Actually close to 1999 affordability.
According to OCAR, this year the median sales price of an OC home is $449,000. That is 59.8% MORE dollars than in 1999. However, with an average interest rate of 3.9% (get it while you can!) the payment on that $449,000 home is a mere $173 more a month atÂ $2118.
So many buyer's today are looking for a "deal". In fact, home affordability may be the "deal" they have been waiting for. Buying right now may be the "deal" everyone wished they got in on.
According to the Orange County Realtor, the 2012 UCLA Anderson Forecast says that mortgage interest rates will rise to an average of 7.3% within a couple of years. At today's prices, that wouldÂ increase the monthly mortgage payment to $3078, or by almost $1000.
Would you like to save $1000 a month?
If you're interested in buying in Orange County give me a call.