California Market Report 

The California Association of Realtors First-Time Buyer Housing-Affordability Index measures the percentage of households that can afford to purchase an entry-level home in California. The index is the most fundamental measure of housing well-being for first-time buyers in the state. The First-Time Buyer Housing-Affordability Index stood at 69% in the first quarter of 2009, compared with 46% in the first quarter of 2008. To give you a comparison of how significant a 69% index is, you only have to compare the 2009 index with the 2007 index, which stood at 26%. The formula for the index takes into account the median price of homes, current interest rates, and average income. Simply stated, only about 1 in 4 California households could afford an entry-level home in 2007, but, today, almost 7 out of 10 households can afford an entry-level home. The current index is the highest ever recorded.
 
The 69% Housing-Affordability Index is one positive outcome resulting from the sub-prime mortgage crisis. A few years ago, many first-time home buyers were having to go out of state to find affordable housing, but, today, California is now offering affordable housing.
 
The California housing market today offers low prices, low interest rates, and ample inventory (especially in the middle and upper price ranges). The high California taxes and a double-digit unemployment rate will keep the housing market from overheating in the near future.