Everyone Should Take Interest in California's Housing Crisis

With a gross state product of (GSP) of more than $2.3 trillion, California has an economy that rivals that of most countries and is the largest state economy in America. Home to almost 40 million people, the state has a median home value of $371,400, according to the US Census. Median gross rent is $1,243. All of that with a median household income of $61,489 and a per capita income of approximately $29,906. You do not have to be an economist to see that those numbers add up to millions of people having difficulty finding affordable housing.

Home prices skyrocketed in the early 2000s with easily obtainable mortgages. When banks tightened their lending requirements in early 2007, prices dropped. This brought many cash buyer investors into the market. Now, with the median price at about $650,000 for the San Francisco Bay Area and the most affordable region being the Central Valley at a median home value of around $290,000, California has one of the lowest Housing Affordability Indexes in the country. It also is the most expensive state in the country to lease a home.

The California Economic Summit

Early in April of 2016, housing experts came together with builders, lawmakers, city planners, and environmentalists at the California Economic Summit to address the housing crisis that is affecting millions of Californians. Their goal is to find a way that people of all income levels can afford quality housing. It is crucial to the health of the state's overall economy that California address its low Housing Affordable Index. By finding ways to lower the percentage of annual income a household must devote to housing, they free up billions of dollars to be spent in other areas of the economy. For years separate groups have been advocating affordable housing for seniors, the homeless population, and veterans. The reality is that California's housing crisis is affecting everyone. New numbers for 2016 show that the housing crisis goes beyond people with minimum wage jobs. It is hitting middle class people and altering their lifestyle and spending.

Why the rest of the country should care

Many people never thought about title insurance before the housing market collapse. The quick shifting of ownership by banks after foreclosure led to many title issues. Approximately one of every three title searchers reveals a cloud on the title or some other defect in the public record that needs clearing to close the real estate transaction. The national housing crisis shined a spotlight on the need for homeowners to have their own title insurance policy, in addition to the lenders coverage. A recent report by the Public and Affordable Housing Research Corporation (PAHRC) reveals another problem growing beneath the radar for every state in the country. While federal programs are providing homes for approximately 5 million American families, there are many more applying for assistance who can't even get on a waiting list for aid.

There are 2.76 million families on the existing waiting lists for housing vouchers. Analyst estimate that an additional 9.5 million households would apply for housing vouchers were there no caps on the waiting lists. Housing agencies have closed their waiting list due to limited resources and vouchers. These numbers do not take into consideration the eligible families who do not seek federal assistance, but are still struggling to keep a roof over their heads.

One in four renters across the US pay over half of their income toward housing. Even for people living in the Eastern United States, California's housing problems are closer than many people realize. We have all seen how one sector of the economy affects the total economy and lifestyle of all Americans. To seriously address issues like poverty and the needs of our aging population, we must consider affordable housing for everyone. It is the only way to protect future generations of hard-working Americans in every state from having their dreams of home ownership evaporate away before their eyes.

Title insurance protects the current home owner and their heirs. A standard title insurance policy will usually protect against fraud, forgeries, and other title issues. For more complete coverage, talk to your title insurance representative.