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BUYERS STILL AHEAD FOR NOW ... HOUSING AFFORDABILITY SOARS AS INTEREST RATES AND PRICES GO DOWN

 SAN JOSE, Calif., Sept. 2 /PRNewswire/ -- Due to lower interest rates and softening prices, housing affordability soared in the Santa Clara County residential real estate market in August, according to Glenn Kinsey, president of the San Jose Real Estate Board, and according to the California Association of REALTORS(R) (CAR's) Housing Affordability Index.
 "Interest rates and home prices were down in August, contributing to an increased affordability rate of 49 percent, meaning that 49 percent of working people here can now buy the median-priced home which sold for $216,000 in August," said Kinsey. "As recently as 1989, CAR's Affordability Index showed that only 6 percent of working people here could buy the median-priced home. In 1989, there were fewer homes available, interest rates were higher and so were prices. The opposite is now the case.
 "As an example of affordable housing for sale, of those single- family detached homes available right now," said Kinsey, "1,037 are listed at or under $200,000. Those homes can be found in the Willow Glen/Cambrian area (61), the downtown San Jose area (315) and the East Valley (234) and in most other areas of Santa Clara County.
 "Increased affordability is very significant," said Kinsey, "However, if inventory continues to shrink, that can take the glow off the 'buyer's market' by reducing the number of choices for buyers and weakening their leverage in the market. If inventory gets low enough, it can, in combination with other important factors such as prices and interest rates, mark the beginning of the end for buyers and turn the market advantage back to sellers, reducing affordability again. Inventory is one of many important factors to keep an eye on when trying to predict real estate market trends. And our shrinking inventory is an indication the market is still leveling off here in terms of available listings.
 "Of the 6,790 single-family detached, condominiums and townhouses on the Multiple Listing Service in August, 17 percent sold, meaning that there was only a 5.8-month supply of housing available in the area at the August sales rate."
 Residential resales were down slightly to 1,178 from July's 1,187, a decrease in sales of 1 percent for the month, and also down 5 percent compared with August 1992 when sales were 1,245. The average price also decreased from July's $254,324 to August's $250,088 and was also down compared with $250,520 in August 1992.
 The August median price also decreased to $216,000 from $219,500 in July. The median was $219,000 in August 1992. (The median is the mid- point; half sold for more, half for less.)
 Established in 1896, the San Jose Real Estate Board (SJREB) is the oldest trade association and the second largest real estate board in California, operating the largest on-line computerized multiple listing service in the nation. With a current membership exceeding 8,000, the SJREB has made and continues to make significant contributions to the community over the nearly 100 years of its existence. REALTOR(R) members adhere to the strict National Association of REALTORS(R) Code of Ethics and have been instrumental in protecting private property rights at all levels of government.
 -0- 9/2/93
 /CONTACT: Glenn Kinsey, president, 408-266-0430, or Diane Brazil, communications director, 408-998-7300, ext. 260, both of the San Jose Real Estate Board/


CO: San Jose Real Estate Board ST: California IN: SU:

TB-TM -- SJ010 -- 8621 09/02/93 17:45 EDT
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Publication:PR Newswire
Date:Sep 2, 1993
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