Real estate market won’t stabilize soon |

Real estate market won’t stabilize soon

A recent Union Home Fall Trade Show publication proclaimed on its cover the average household income for Nevada County residents as $90,000 a year.

Based on the average combined household income of $90,000 and a 28 percent debt to income ratio, the median Nevada County income earner could buy – with a 30-year loan fixed at 7 percent interest and a 20 percent downpayment of $46,000 – a house costing $278,000.

That would give the buyer a mortgage of $232,000, with $1,752 per month PITI.

The current median home price in Nevada County is $382,000, down from the peak of $435,500 in the fourth quarter 2005.

Until the median house price gets more in line with the median household income, home prices have nowhere to go but lower.

Couple this with rising interest rates, a return to normal lending practices requiring folks to actually save for the down payment, and a small rise in unemployment.

It will be some time before this market stabilizes.

Juan Browne

Nevada City

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