So are you ready to hear some good news about the local housing market for a change? There is an obscure tracking measure called the “Affordability Index”. It measures the percentage of homeowners who can afford the median priced house at current mortgage interest rates. The combination of record-low interest rates, coupled with a housing market that has had it’s head kicked in for the last half-decade, puts the Affordability Index at 65%, the highest rate that has ever been recorded.

So what exactly does this mean for La Quinta real estate? Well it means a couple of things, and they are all pretty good. First, it means that there are more buyers in the pool of potential customers. Second, it means that because there are more buyers, there will be more transactions. And more transactions usually translates into shorter hold time for Sellers, so the deals that do happen, happen quicker. So more transactions AND faster transactions. 

There is also something else at work here, and that is that the people that were first to jump ship and short sell their house, have had their two year scarlet letter removed, and are now finding that banks will start to lend to them again. Maybe they had a strategic default, never lost their job, never took a hit in income, but just ditched a house that was 40% underwater. Now they are coming back into the market as new buyers, leaving their rental house, and turning back into a buyer again. This is great news for people selling their house because a new wave of potential buyers are coming back into the market once their credit is restored. 

When you look at the insanity of the peak of the housing bubble, and believe me, I was up to my ears in it, the Affordability Index was 14%. So a little more than one out of nine people were actually qualified to buy a house. Compare that now with six out of nine people who are qualified and you can see that there just might be something good brewing in the housing sector. So if you are thinking about buying or selling La Quinta real estate, you might want to sit down and have a really candid talk with your family because the times are changing, and you’ll be glad that you were able to read the signs in advance. 

Charlie Robinson

Broker/Owner, Par 5 Realty