C.A.R. Reports California's Housing Affordability Index Fell Four Points to 14 Percent in August; Lowest on Record Since 1989

LOS ANGELES--(BUSINESS WIRE)--Oct. 6, 2005--The percentage of households in California able to afford a median-priced home stood at 14 percent in August, a 4 percentage-point decrease compared with the same period a year ago when the Index was at 18 percent, according to a report released today by the California Association of REALTORS(R) (C.A.R.). The August Housing Affordability Index (HAI) declined 2 percentage points compared with July, when it stood at 16 percent.

C.A.R.'s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. C.A.R. also reports housing affordability indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being in the state.

The minimum household income needed to purchase a median-priced home at $568,890 in California in August was $133,800, based on an average effective mortgage interest rate of 5.87 percent and assuming a 20 percent downpayment. The minimum household income needed to purchase a median-priced home was up from $110,980 in August 2004, when the median price of a home was $473,520 and the prevailing interest rate was 5.83 percent.

The minimum household income needed to purchase a median-priced home at $220,000 in the U.S. in August 2005 was $51,740.

At 28 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 19 percent. The Santa Barbara region was the least affordable in the state at 6 percent.

C.A.R.'s September 2005 sales and median price report for the state and regions within the state will be released on Tuesday, Oct. 25.

Leading the Way...(R) in California real estate for 100 years, the California Association of REALTORS(R) (www.car.org) is one of the largest state trade organizations in the United States, with more than 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

    C.A.R. HOUSING AFFORDABILITY INDEX (a)


                                          Aug-05     Jul-05     Aug-04
California                                   14         16         18
California - Condos                          21         22         27
United States                                48         49         54
C.A.R. REGION
Central Valley                               17         18         26
High Desert                                  28         30         42
Los Angeles                                  12         14         17
Monterey Region                               9          9         12
Northern California                          15         16         20
Northern Wine Country                         7          7         13
Orange County                                11         11         11
Palm Sprgs/Lwr Desert                        11         11         13
Riverside/SBernardino                       n.a.        15         21
Sacramento                                   19         20         26
San Diego                                     9          9         10
San Francisco Bay Area                       12         12         14
San Luis Obispo                              10         10         14
Santa Barbara County                          6          7         12
Santa Clara                                  18         18         23
Ventura                                      13         13         14
COUNTY
Alameda                                      11         11         15
Contra Costa                                 10         10         10
Fresno                                       18         21         27
Marin                                        11         11         14
Merced                                       10         11         21
Riverside                                   n.a.        15         18
San Bernardino                              n.a.        19         28
San Francisco                                 9          9         11
San Joaquin                                  11         11         19
San Mateo                                    12         12         15
Santa Cruz                                   10         11         14
Sonoma                                        7          7         13
Stanislaus                                   16         17         28

(a) -- percentage of California households that can afford to purchase
       a median-priced home
 r  -- revised
Source: California Association of REALTORS(R)


Median Prices By Region - Current Month vs. Year Ago

                              Aug-05      Jul-05        Aug-04
----------------------------------------------------------------------
Calif. (sf)                   $568,890    $540,900      $473,520 r
Calif. (condo)                $433,040    $426,320      $370,700 r
C.A.R. REGION
Central Valley                $363,720    $356,260      $289,360
High Desert                   $305,700    $298,950      $236,890
Los Angeles                   $564,340    $543,890      $455,590
Monterey Region               $727,500    $729,250      $613,120
Monterey County               $690,000    $698,000      $555,000
Santa Cruz County             $783,000    $759,000      $639,000
Northern California           $440,420    $418,630      $366,050
Northern Wine Country         $640,700    $639,670      $505,790
Orange County                 $716,300    $706,820      $649,590
Palm Springs/Lower Desert     $371,020    $371,390      $326,740
Riverside/San Bernardino      NA          $384,910      $310,120
Sacramento                    $394,450    $387,810      $328,410
San Diego                     $616,870    $616,050      $579,040
San Francisco Bay             $730,360    $724,890      $644,920
San Luis Obispo               $566,510    $559,900      $454,720
Santa Barbara County          $819,850    $654,170      $541,670 r
Santa Barbara South Coast     $1,301,000  $1,340,000 r  $997,300 r
North Santa Barbara County    $462,880    $462,690      $411,700
Santa Clara                   $760,000    $750,000      $625,000
Ventura                       $685,680    $694,690      $626,730

na - not available
r - revised
Source: California Association of REALTORS(R)

Today's release also is available on C.A.R. Online at http://www.car.org/index.php?id=MzU1NDk.