Even wealthy homebuyers can’t find homes in California
Apparently, Silicon Valley is experiencing a new shortage of high-end homes that is finally affecting wealthy homebuyers. According to real estate website Trulia, there were 42 percent fewer premium homes available in San Jose in December than during the same time last year. This is causing experts to believe that the disappearance of those high-end homes means higher prices and tougher competition for all homebuyers. Cheryl Young, senior economist at Trulia, stated,
Even homes that are very expensive are harder to find. There’s sort of nothing out there, even if you have cash to burn.
Trulia claims that San Jose’s supply of premium homes fell by 11 percent in 2016, and these homes are priced at $2.5 million or more. Oakland and San Francisco, along with San Jose, were among the 10 cities experiencing the biggest dip in premium homes. Oakland’s premium home inventory dropped 25 percent in the past year, while San Francisco’s fell 23 percent. Unfortunately, it appears that premium homebuyers who can’t find a top-tier home may buy a cheaper home, which would take it out of the housing market for lower-income buyers.
Homes that cost less than $500,000 are becoming rare in the Bay Area. Unfortunately, the supply of starter homes in San Jose dropped 55 percent this year, while in San Francisco it dropped 48 percent, and in Oakland it fell 35 percent. Trulia’s report claims that first-time homebuyers nationwide would have to pay about 40 percent of their monthly income to afford a median-priced starter home. However, first-time homebuyers in the Bay Area would have to spend 95 percent of their monthly income to afford a home in San Jose, and 113 percent in San Francisco, according to Trulia. More housing is needed in California and hopefully some sort of solution can be found to solve this issue.