Good news? Those looking to sell a home can expect prices to rise. Bad news? Sales could be hindered by those rising values.
The median home price in California is forecast to increase by 2.5% to $607,900 this year, according to a recent report from the California Association of Realtors (CAR). But lack of affordability will likely limit home sales in 2020.
“With interest rates expected to remain near three-year lows, buyers have more purchasing power than in years past, but they may be reluctant to get off the sidelines because of economic and market uncertainties,” CAR President Jared Martin said in a news release. “Additionally, an affordability crunch will cut into demand in some regions such as the Bay Area, where affordability is significantly below state and national levels. These factors together will subdue sales growth next year.”
CAR’s Traditional Housing Affordability Index is a measure of the percentage of households that can afford to buy a median-priced home based on traditional assumptions. In Calaveras County, only 49% of households can afford a median-priced home by this metric, which is less than the 56% average for the country as a whole, but well above the state average of 31%.
In the wake of the subprime mortgage crisis that spread across the country beginning in 2007, Calaveras County saw several years of declining home prices.
According to the Zillow Home Value Index (ZHVI), which takes median home values for a given region and adjusts them for seasonality and errors in individual home estimates, the median value of a home in Calaveras County was $284,144 in January 2008.
In February 2012, the median home price bottomed out at $214,535. Since then, prices have steadily increased. By November 2018, the median price came up to $311,469, and by November 2019, the ZHVI was calculated at $321,840.
Neighboring Amador and Tuolumne counties followed a similar trend. In January 2008, ZHVI in Amador County was $267,171. In March 2012, it reached a low point of $205,260. By November 2018, the median price had risen to $297,249, and by November 2019, it had gone up to $302,091.
For Tuolumne County, ZHVI figures are only available beginning in January 2017. At that time, the median home price was calculated at $233,086. By November 2018, this number had risen to $275,459. However, the ZHVI peaked in June 2019 at $281,716, and has since declined slightly to $275,207 in November 2019.
In Calaveras County, home sales and sales prices have lagged far behind home listings and asking prices in recent years.
According to Zillow, the average home listings per month numbered 496 in 2013; 537 in 2018; and 584 between January and November 2019.
In contrast, home sales per month averaged 87 in 2013; 111 in 2018; and 111 in 2019.
A similar gap can be seen between listing prices and sale prices in recent years. The median list price was $295,000 in January 2010; $359,000 in November 2018; and $369,000 in November 2019.
However, the median seasonally-adjusted sale price was only $206,700 for January 2010; $313,900 for November 2018; and $319,000 for October 2019.
The rise in home prices in recent years has not led to a boom in construction. According to the United States Census Bureau 2013-2017 American Community Survey 5-Year Estimates, only 133 new housing units were built between 2014 and 2017.
The bulk of the county’s housing was built between 1970 and 2010. During this time, 77.7% of the county’s housing was constructed, with an average of 5,467 units built each decade. About 21% of the county’s housing units were constructed prior to 1970.
While there are a total of 28,169 housing units in the county, only 63.2% are occupied as primary residences, with 36.8% defined as vacant by the Census Bureau.
Of occupied housing units, 78.2% is owner occupied, while 21.8% is renter occupied.
Eighty-six-point-three percent of the county’s housing units are detached, one-unit residences. There are also 2,268 mobile homes in the county, making up 8.1% of total housing units.
In Calaveras County, median monthly housing cost is $1,806 with a mortgage, and $533 without a mortgage. The median cost of monthly rent is $1,195.
A household is considered cost-burdened by the United States Department of Housing and Urban Development (HUD) if it spends more than 30% of income on housing, which means that it may have trouble affording basic necessities.
In Calaveras County, 46.6% of households with a mortgage are considered cost-burdened. For households without a mortgage, 20.2% are considered cost-burdened. For renters, 58.7% are defined as cost-burdened.
“I think the biggest issue is the availability of a range of rental housing and homes for first-time buyers,” Planning Director Peter Maurer said. “The cost of construction essentially exceeds the market value, so unless you are an equity immigrant or retiring from a high-paying job elsewhere, little housing is being built.”
This past year, the county adopted a Housing Element update meant to address issues surrounding housing in the county.
“I think the biggest change will be the county’s efforts to actually implement some of the measures that have been on the books for a number of years, especially with new funding available from the state,” Maurer said. “Addressing homelessness will be a big issue, and looking at ways to reduce housing costs is something that the board has already directed us to tackle.”