Posted on Tue, Aug. 24, 2010

Despite a softening real estate market, buying a home continues to be out of reach for many San Luis Obispo County residents.

For the past year, the county has been the least affordable in the state to buy an entry-level home, according to the California Association of Realtors.

The second quarter of this year was no exception, with the percentage of county households that could afford to purchase a starter home at 48 percent, followed by the Bay Area at 49 percent. The High Desert region was the most affordable, at 84 percent, according to the association’s housing affordability index released last week.

The median price of an entry-level home here was $337,730 in the second quarter ending June 30, according to the association. The median is the statistical point at which half of homes sell for more and half for less.

The minimum annual income needed to qualify was $55,670, and the estimated monthly payment, including taxes and insurance, was $1,860.

Leslie Appleton-Young, vice president and chief economist for the association, said that San Luis Obispo County remains in the least affordable category because many would-be buyers still do not have sufficient income to buy a home here.

The median household income this year in San Luis Obispo County is $59,530.

“The median price (of an entry-level home) in your county is similar to San Diego County, but your index is 10 points lower because you have a lower income distribution,” she told The Tribune. “It’s not that the prices aren’t really attractive or that mortgage rates aren’t attractive, because they really are. It’s that the income of the population is lower.”

Incomes, Appleton-Young noted, are tied to “bigger forces than the housing market.”

“That has to do with the jobs base, and that’s a larger issue,” she said.

Kirk Lesh, an economist with California Lutheran University, agreed that incomes in the county have not caught up with prices. However, he also said that home buying remains a dream for many in the county because prices in this region have continued to hold steady when compared with other communities.

“The point is that even though prices have dropped, they may not have dropped as much as in other places,” he said. “Go to the Central Valley and buy a house. In places like Riverside and San Bernardino, it’s ‘hello, affordability.’ ”

In June, the median price of a single-family home in San Luis Obispo County was $440,000, compared to $191,900 in the Riverside-San Bernardino region, the association reported. The association’s July report is due for release today.

San Luis Obispo County isn’t faring much better on the nationwide front.

It was the least affordable of the smaller housing markets in the country during the second quarter, according to the National Association of Home Builders, which released its housing opportunity index last week.

Others hovering near the bottom were Santa Cruz-Watsonville, Santa Barbara-Santa Maria-Goleta, Napa and Ocean City, N.J.

Jerry Rioux, executive director of the San Luis Obispo County Housing Trust Fund, said the county’s economy is heavily dependent on service jobs, positions that often do not pay well.

“Lots of people here make $10, $12, $15 an hour,” he said. “When you’ve got a husband and wife each making $20,000 to $30,000 a year, you’re still below the median.”

But even if affordability were higher, concerns about job security and the difficulty of qualifying for a loan during the recession would put a damper on home ownership.

“If you are worried that your company might go under, there’s no way you’re going to buy a home,” he said.