“OKLAHOMA DREAMING…may not be the actual name of the Beach Boys song but some younger Californians may be doing just that. The San Diego Transcript reported yesterday that most Californians make less than half of what they need to buy the average California home. The median home price of $488,600 requires an annual income of $113,920 to qualify for the standard mortgage, and the vast majority of Californians make well less than half that figure. So who is buying the costly homes? Repeat buyers using their new found equity to trade up. For young families seeking their first home, it can quickly become a broken dream and many such people are beginning to look elsewhere for affordable housing. For Oklahoma, which has long waited for its youth to return, this is called o-p-p-o-r-t-u-n-i-t-y.” Reprinted from the Ponca City Development Authority Weekly Update May 6, 2005.
I was at NAIOP’s semi-annual meeting last week where the urbanist Joel Kotkin talked about the cost of housing in San Francisco. The medium priced house there is $900,000 and only 10% of their workers can afford to buy a house. It is an unsustainable market condition.
An additional “quality of life” factor is drive times. In Los Angeles the average rush hour commute is at 35 mph and even in San Bernardino it is only 42 mph. Hours stuck in traffic average 58 hours/year in LA and 35 hours/year in San Bernardino.
If you have a list of former residents (high school and college alums), you should be marketing to them if they live in CA. Remind them of how much house they can buy in your community compared to what they could get in selling out in lofty CA.