By Dave Melendi LOS ANGELES -- The percentage of Los Angeles County households able to afford a median-priced home dipped 4 percentage points in July compared to the previous year, according to a monthly industry report released Thursday. The 4 percent dip in the so-called "housing affordability index" mirrored the state decline. In the county, 31 percent of households were able to afford a $286,070 home, while in the state, where the median home price was $323,700, 28 percent were in the same boat, according to the California Association of Realtors. Housing prices have been hitting record highs for the past several months and experts don't see an immediate end to the hikes in sight. "I would expect the prices are going to continue along this trajectory," said Raphael Bostic, a USC real estate professor and director of the Casden Real Estate Economics Forecast at the Lusk Center. "Probably not at the same pace that it has for the last 12 months or so, but there is excess demand in the market and when that happens prices go up. "Part of it is the area is built out. Part of it is land is very expensive so if you are going to build you have to build toward the higher end, which doesn't help most of the populous. Plus the permitting process takes so long." CAR President Robert Bailey also expects continued downward pressure on the affordability index. In the late 1980s and early 1990s, the index reached the high teens before the recession turned it around. "The housing supply is just not keeping pace with both family creation and growth within the communities from a population standpoint," Bailey said. "You combine that with the historic low interest rates drawing more people into the market ... ." Of the 16 regions CAR breaks the state into for the report, the High Desert ranked as the most affordable in California with 66 percent of households able to buy a median-priced home. The least affordable region was Monterey at 16 percent. The Los Angeles region's 31 percent figure ranked it sixth on the list. Riverside/San Bernardino tied Sacramento for second at 43 percent. Orange County tied Santa Clara for 10th on the state list. The July index was unchanged from June in both the county and state. "This is going to be an ongoing challenge," Bostic said. "One of the issues that the region has to face is supply of housing and is that meeting the demand. The evidence right now would suggest no it's not."
September 6, 2002