HOUSING MARKET SLUMBER

With August winding down we'll get a better grasp on just how broad and deep is this malaise that's settled over the residential real estate market.
We already know that in the San Fernando Valley it's reached Betty Grable status, meaning its got legs.
DataQuick Information Systems' monthly report, which usually comes out on the the15th (Tuesday) focuses on Southern California.
Past reports show that the broad Los Angeles County market is still chugging along in terms or price increases, although those gains now look tepid compared to the past several years. And San Diego County's median price has already fallen under the year-ago level one month before bouncing back up above it the next.
San Diego was the first market to take off and the first to retreat.
Others in the region are expected to follow suit.
The California Association of Realtors July tally follows the final week of the month.
And this market turn has been so strong that the association's economists made a big downward revision to this year's sales forecast a couple of months ago.
The bottom line: There are winners and losers in both bull and bear markets.
AFFORDABILITY
It wasn't that long ago that CAR rolled out its Housing Affordability Index every month. It tracked how many households in the state and major metro areas could afford to buy a median priced home two months ago.
Notice you haven't seen that index for a very long while. The association published its last one on Jan. 12.
Turns out there was a problem. Even though rising prices continued to drive down afford ability sales continued to rise.
Something had to be wrong.
There was. The index had a couple of problems.
It was not capturing who was buying. One component assumed that no more than 30 percent of a household's gross income could go toward the house payment and that a 20 percent down payment was required.
Lenders made loans on higher income limits and lower down payment requirements.
About a year ago the Los Angeles-based association quit issuing the index and said it was going to be reworked.
Now it appears that was a tougher job that initially thought. The original plan called for the re-jiggered index to be rolled out in the first quarter. The it was pushed back to the middle of this month, which is now.
Association spokesman Mark Giberson said that the new and better index comes out on Thursday. Actually, it will be two indexes.
One tracking first time buyers and the second repeat buyers.
Affordability will now be tracked on a quarterly, rather than monthly, basis.
The first one will cover this year's first and second quarters and compare them with the like period a year ago.
"Both have different assessments on down payments, loan products and that type of thing," Giberson said.
Here's a recap of the last index in its old form, which tracked affordability in November, 2005.
It fell an annual 5 percentage points and slipped to record lows in seven areas, including Los Angeles County. Rising interest were partly to blame them.'
They will be partly to blame now, I suppose.
As the year wound down just 14 percent of the state's households could afford a home priced at the then median of $548,770.
The record low for the state was 13 percent and that came twice in 1989.
In Los Angeles County the median priced home cost $575,310 last November, within reach of just 11 percent of households.
The biggest drop then, 16 percent, cane in the High Desert region, which includes the Antelope Valley. There 24 percent of households could afford a house priced at the median $320,860.
The bottom line: The index may be new but I suspect somethings will remain unchanged.
Affordability will lower this year than last year for both first timers and repeat buyers.
And the High Desert will be one of the most affordable regions in the state.
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