Again, folks … “salaries” (in relation to price of housing) only matters in *some* CA markets. In well-established areas, a much larger percentage of buyers use all cash or mostly cash for purchase money. Buyers utilizing 1031 exchanges typically don’t have to come up with very much cash because they trade “like for like.” Also, it is not uncommon in well-established areas for longtime neighbors to pay cash for a nearby prospective listing for a residence for other family members or gift a large downpayment to the buyer (typically a relative) OR tell distant relatives who will be cash buyers of a nearby prospective listing (before it is put on the MLS with the commensurate price increase). This can only happen if the listing agent/broker goes door to door telling neighbors of the listing before it is actually marketed (again, this is common practice in well-established areas).
In *newer* areas (attractive to worker-bee buyers who will typically get a PM mtg for 75%+ of the purchase price), the combo of HOA/MR can EASILY come to $500-$1500 mo OVER AND ABOVE PITI. THIS is what causes the out-of-pocket unaffordability to these buyers who are also paying high monthly PITI often IN ADDITION to simultaneously attempting to raise minor children.
It is the *newer* areas (built ~1993 or after but more likely those built after 2000) which will undoubtedly suffer price declines if fixed MIR’s go up significantly as the vast majority of the would-be sellers in those areas are in no position to carry a PM mortgage for a buyer who can’t qualify for a mortgage on the open market to pay them what they want for their properties. Higher MIR’s will affect the more established areas (in SD County, 20-90 yrs old) very little, if at all.
These are the two sides or “factions” of CA housing. The “truly haves” reside in the established areas and the “have-nots” who are “giving the appearance of having” reside in the *newer* areas …. by CHOICE. In doing so, they are CHOOSING to own in areas where their future property values depend on many more factors out of their control then the owners who reside in the established areas.
