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Los Angeles Cheap Homes Improved Home Affordability



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By : John Cutts    99 or more times read
Los Angeles cheap homes improved home affordability for first time buyers in the metro area in the last months of 2009, based on figures from the California Association of Realtors and a real estate research firm.

In February, houses sales in Los Angeles County increased by nearly 10 percent year over year despite an uptick in prices because buyers believed the price levels were still affordable.

More than 5,000 houses were sold in February, a jump from the 4,590 units sold in February 2009. Buyers pursued their home purchases despite upticks in prices, pushing the February 2010 median sales price to $315,000, up by more than five percent from the $299,000 median in February 2009.

The almost 176,000 homes that defaulted or entered foreclosure auctions in Los Angeles and in other portions of the Los Angeles-Long Beach metro area in 2009 helped improved housing affordability for first time buyers in the area.

According to the statewide realtor association, the home affordability index for first time buyers soared to 64 percent in the July to September quarter of 2009. The index shows the percentage of families that can afford to buy an entry-level house in California.

The number of first time home buyers soared to 47 percent of all home buyers in the state because they were enticed by affordable homes, federal tax credits, low mortgage rates and record numbers of single-family and townhouse foreclosed homes. Sales of Los Angeles cheap homes contributed sharply to the increased share of first-time buyer purchases in California.

The 47-percent share of first-time home buyer purchases in 2009 was a record jump from the 2008 share of 35.9 percent and from the long-running share of 38.6 percent. It was also the highest percentage since 1995 when over 50 percent of all house sales were made to first time buyers.

According to CAR members, almost 40 percent of first time home buyers said they would have not made their purchases if no federal tax credits were offered and almost 70 percent said the tax credits were an important factor in their home purchase decision.

The home price median in California in 2009 was $271,000, a figure higher than the median price during the first months which was only around $245,170, signifying a steady increase throughout the year.

While the home sales price median in Los Angeles is typically higher than the statewide median, determined buyers can still find Los Angeles cheap homes priced lower than the statewide median.


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