Affordability on the rise

Of course we all know about the rising marketing times, declining number of homes sold, and declining prices. The buyers are sitting on their hands, and even if they do want to buy, the banks won't give them a loan. A gloomy picture indeed. When will it end?

Remember, this too shall pass. As prices drop, affordability rises, meaning more and more people can afford to buy who couldn't before. Look at it this way - when prices were at their peak, only 8% of households could afford the median priced home in North San Diego County. So everyone who could afford to buy already had, and the pool of buyers started to dry up.

So if salaries stay the same or increase, and home prices decrease, the affordability goes up, meaning more can afford to buy. Add to that the fact the rents are on the rise here, and sooner or later, it looks a lot better to own than to rent. So the homebuyer who was priced out of the market in 2005 can now afford to buy in 2008.

Eventually the pendulum swings the other way, and the current oversupply of homes will be absorbed, and since very few are being built, there will once again be a shortage.

Here's a list of affordability rates throughout the North County.

• Rancho Santa Fe (92067, 92091), Del Mar (92014), Carmel Valley (92130),
Solana Beach (92075), Rancho Bernardo (92127), and Cardiff (92007) were the
least affordable areas in North San Diego County with affordability levels of five
percent or below.

• Encinitas (92024), Carlsbad (92008, 92009, 92010, 92011), Escondido (92025,
92029), and Rancho Penasquitos (92129) had affordability levels ranging between
six and nine percent.

• Bonsall (92003), Oceanside (92054, 92057), Vista (92081, 92084), Fallbrook
(92028), Valley Center (92082), Poway (92064), Ramona (92065), and Rancho
Bernardo (92128) reported affordability levels between 12 and 19 percent. Vista
(92083), Oceanside (92056), and Escondido (92026, 92027) were the most
affordable areas ranging between 21 and 23 percent.