Prices Chase Away Home Buyers?

This was the sub-heading of a Daily Pilot article I came across as I was sorting through old archives in a home I recently purchased in Laguna Beach. The article was published on May 8, 1977 and was preceded with the headline “Fantasy Fades Out,” meaning the fantasy of home ownership. It went on to bemoan the rapidly increasing cost of housing as home prices outpaced the high rate of inflation. The reason, the writer suggests, is that building costs had become excessively high and that there were too few homes available, especially to first-time buyers.

 

Snippets of the article really caught my fancy. Some of the juicier bits include: “People who are gainfully employed cannot afford housing because of the costs.” “We have a middle-class housing problem.” “The MIT-Harvard Joint Center for Urban Studies reports only 27 percent of American families can afford the median home price.” “The pressure is greatest on the first-time buyer.”

 

Does any of this sound familiar?

 

45 years after this article was published, much of the verbiage can be cut and pasted into an article today and be just as pertinent. Of course, the more things change, the more they stay the same. Although the sentiment is perfectly suitable to today’s market, the figures are quite different.

 

According to this piece, the median home price was $44,200 and the typical down payment was $13,000 or about 29%. It goes on to say “The average monthly payment for principle and interest exceeds $300.” Ahhh, the good old days. In comparing these statistics to today’s figures, as of June 2022 in Orange County, the median home price has escalated to $1,100,000 or $612 per square foot; about 44 times as much as in 1977. To borrow another phrase, it’s all relative.

 

Here at Cove Canyon Realty, we pride ourselves in helping our clients navigate these complicated market dynamics by providing honest, intelligent guidance. As difficult as it was to pull the trigger on that $44,200 home in 1977, it would sure be a nice little nest egg today.