The most affordable place to live in California

Stanislaus County homes are the most affordable in California,
followed by Merced and San Joaquin counties, a study released Thursday
shows.
That's the good news.
The bad
news is that home sales prices plunged again in January, pushing values
back to what they were in autumn 2000. Stanislaus home prices, for
instances, have fallen nearly 65 percent since peaking in December
2005, and Merced and San Joaquin values have dropped even more.
Housing statistics from various sources keep demonstrating how drastically things have changed in the valley.
New
calculations show that Stanislaus' median-income families can afford to
buy 71.1 percent of homes on the market. Three years ago, before the
housing bubble burst, only 3 percent of Stanislaus homes were
affordable to median-income families.
Most homes also are affordable in Merced (70.9 percent) and San Joaquin (66.4 percent).
That's terrific for first-time buyers such as Tammy L'Allier.
"I
have a fairly decent job, but I never thought I'd be able to afford my
own home in California because I've always been a single mom," said
L'Allier, 47. So she was shocked last summer when she saw a home for
sale in her price range. "I thought: Oh, my God! I could actually
afford that."
She started searching and by October
bought a $129,000 home on Estep Drive in central Modesto. The
foreclosed house, with more than 1,600 square feet, costs her only
about $150 more per month than what she had been paying for rent. She
expects to save at least that much in income tax deductions.
"I
still can't believe it. Now I can own dogs and paint my walls any color
I want, which I couldn't as a renter," said L'Allier, who has painted
her living room dark chocolate and put black stripes on her bedroom
walls. "I love it!"
Andy and Amanda Baker of Modesto
also are thrilled. They bought their first home in December for
$123,000, and their monthly payment is just $930.
"We're
so thankful we were able to do this," said Andy Baker, 38, who is an
adoptions social worker in Merced County. He and his wife, who is 36
and works with developmentally disabled adults, expressed sorrow that
their Carol Street home's previous owner went into foreclosure. "It was
hard to buy knowing someone else lost this home," he said.
But the Bakers, who have two children, had been frustrated for years as they watched home prices soar out of reach.
"We
were ready to settle down and get that first home," said Andy Baker,
who was raised in Merced County. He advises others to consider buying
now, but he cautions: "Make sure the home is within your ability to pay
for and that it's someplace you want to live."
The
National Association of Home Builders/Wells Fargo Housing Opportunity
Index, released Thursday, shows how the Northern San Joaquin Valley has
flipped from being among the nation's least affordable places to buy to
being among the most affordable.
Stanislaus hit its
highest affordability level in 1998, when median-income families could
afford nearly 80 percent of homes. That was well above the national
average, but the county fell way below average during this decade's
housing boom.
The index shows that 62.4 percent of
homes sold nationwide in October, November and December 2008 were
affordable to families earning the national me- dian income of $61,500.
The median income was calcu- lated at $56,500 for Stanislaus, $47,400
for Merced and $61,300 for San Joaquin.
Those incomes were about the same three years ago, even though homes cost more than double what they do today.
In
January, the median-priced home sold for just $140,000 in Stanislaus,
which was $17,500 below December and $256,000 less than 2005's peak
price, according to MDA DataQuick. That's a 64.6 percent decline.
That
value drop, obviously, is bad for current homeowners, many of whom now
owe more on their mortgages than their homes are worth.
During
the past 24 months, lenders have repossessed more than 11,601
Stanislaus County homes as homeowners have defaulted on more than $3.9
billion in loans, according to statistics released this week by
Foreclosure- Radar.
To attract new buyers for those
foreclosed properties, banks typically offer to sell at bargain prices.
That drives down home values even more.
Because existing
homes are priced so low, new home builders are struggling. Stanislaus
new home building permits fell to the lowest level on rec- ord in 2008,
and this year is expected to be worse, according to recent forecasts by
the California Building Industry Asso- ciation.
To see all the affordability statistics, visit www.nahb.org/hoi. Additional home price data is posted with this story at www.modbee.com.