First-home hurdle high in county
Mary Ellis of Grass Valley found a unique way to leave her mobile home and purchase her first house in western Nevada County: She bought a house in Sacramento.
“I couldn’t afford to buy a house here, but I could afford to buy a rental,” she said.
That was in 1997, when the lowest-priced house she could find in western Nevada County was $100,000. So she purchased a three-bedroom, one-bath house in Sacramento for $53,000 instead.
Six months later, she borrowed against the Sacramento house and purchased a home on Doris Drive in Grass Valley.
Ellis may represent an extreme example of what it takes to buy that first house in western Nevada County, but her story shows the situation hasn’t improved for first-time buyers in the past eight years.
With the median price of houses in western Nevada County now at $395,000, area Realtors define a starter home as anything under $325,000 – if you can find it.
There are less than 450 houses currently on the market in the west county, about a two-month inventory based on current sales rates, according to Mimi Simmons, owner/broker of ERA Cornerstone Realty Group in Nevada City. She would prefer to see a six-month inventory.
So when a starter house comes on the market, it doesn’t last long. “There is a lot of interest,” said Tom Dykstra, a Realtor for Coldwell Banker Grass Roots Realty in Grass Valley who works with a lot of first-time buyers.
“The low-end stuff goes real fast,” he said. “They get multiple offers, selling in a week or two. That’s making it tough for first-time buyers.”
As the median price of a single-family home continues to climb, fewer people can afford to buy them. The California Association of Realtors estimates that just 18 percent of households in California could afford a median-priced home in January, down 5 percent from a year earlier.
The association doesn’t calculate an affordability index for Nevada County, but said 20 percent of households in Northern California could afford a median-priced house in January. That is based on a median price of $372,880, more than $20,000 below the comparable figure in the west county.
Such prices are often beyond the reach of young families in the county, which helps explain why school enrollments are flat or declining, and the average age in the county is 10 years above the state average (46 years versus 36).
“Our prices are continuing to go up, so it is making it difficult for first-time buyers,” Simmons said. “To find something decent in the affordable price range is hard.”
Susanne Voter, who owns five Delta Home Loan offices in the west county, said the affordability issue isn’t a new one.
“I remember when I started in this business, first-time home buyers were buying in the neighborhood of $80,000 and not being able to afford them,” she said.
But Voter also points out that there is a great deal of flexibility when it comes to financing a home purchase.
“We have so many programs with 1 percent start rates, 107-percent financing, interest-only payments,” she said. “There’s all kinds of different programs out there.
“The bottom line is whether or not they can afford the payment and what program we can find to help them afford it.”
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