Earlier in the year, San Jose was named the most unaffordable city in the country. It’s no wonder, with the median home cost at about $900,000. Still, with a population of over 1 million, and growing, people are making San Jose home sales work.
How are people in San Jose able to buy homes?
A report in September may explain how people are still buying real estate, despite the high costs. They’re getting help. According to a report from Attom Data Solutions, which compiles nationwide property data, just over half (50.9 percent) of San Jose’s homeowners bought with the help of a co-signer — that’s more than in any other city.
The report shows that for the first time, more than half of all home-purchase deals in San Jose involve co-borrowers. No other city has topped the majority. San Jose was followed by 45.2 percent in Miami; 39.1 percent in Seattle; 31.1 percent in Los Angeles; 29.4 percent in San Diego; and 28.8 percent in Portland.
“Climbing home prices are forcing more and more borrowers to consider other options, such as leveraging a parent’s credit, in order to qualify to buy,” Matthew Gardner, chief economist at Windermere Real Estate, said in the report.
Source: Mercury News
The good news is that percentage wise, homeowners in San Jose have more equity than in other cities. Partly because they are making bigger down payments and partly because San Jose’s real estate market is so strong. Nationally, the median down payment is only about 7.3 percent of the median price of a home.
Now look at the numbers for San Jose, where buyers put down 25.2 percent of the median price of a home. Again, that was the highest median down payment in the U.S., followed by San Francisco (22.3 percent), Los Angeles (19.3 percent); Naples, Florida (18.5 percent); and the Oxnard-Thousand-Oaks-Ventura metro in southern California (17.4 percent).
Perhaps the same people co-signing on the mortgages are also helping with the down payment, which of course, makes the mortgage payments far more affordable.
Featured image via David Sawyer/Flickr.