There is an upshot to declining California home prices: people can afford them! Recent data illustrates that nearly three out of every four households can afford an entry-level home in the county of Sacramento, an increase in the county's affordability index to 74 percent in the fourth quarter of 2008. That is an increase of 3% from third quarter of 2008, but a huge jump from last spring's 53%.
Outside the Sacramento area, the affordability index averages 59% having climbed from 53% in the third quarter of 2008, but with pockets of higher affordability disbursed throughout. Statewide, the affordability index was only 33% at this time last year, so you do the math!
The beauty of California's diverse terrain and climate lends itself to a vast assortment of communities that span the affordability scale. The High Desert, for example (Palmdale and Lancaster,) ranks as the most affordable region in the state, weighing in at a whopping 76%, while the Central Coast's San Luis Obispo County is the least affordable area at only 44%, trailed by Los Angeles (46%) and San Francisco (47%.). There is hope for people dreaming of a starter home, and now it's time to put those dreams into action when the tides have steered the market their way.