Home affordability has hit a record high in Stanislaus County.
New statistics show Stanislaus' median-income families could afford to buy 83.5 percent of the homes sold during the first three months of this year.
That's the highest affordability rate in California and the highest in Stanislaus County's history.
It's a remarkable turnaround since 2005, the height of the building boom, when just 3 percent of homes were affordable to Stanislaus' median-income families.
Merced and San Joaquin counties also set records for affordability this year, according to the National Association of Home Builders-Wells Fargo Housing Opportunity Index released Monday.
Merced hit 81 percent. San Joaquin reached 80.3 percent.
The national average is 72.5 percent. The index has been calculating affordability rates since 1991.
The Northern San Joaquin Valley now is among the most affordable places in the United States for homeownership. The opposite was true from 2004 through 2006, when the three counties routinely ranked among the nation's least affordable.
Home prices have plummeted since then, however, primarily because foreclosure rates have soared. In Stanislaus, for instance, prices dropped 66 percent, from a median $396,000 in December 2005 to $135,000 this March.
The crash in home prices has created a buying frenzy for first-time homeowners. They're able to tap near record-low mortgage interest rates, federal and state income tax credits, and down payment assistance grants to make buying even more attractive.
"Who would have thought buyers would be able to buy homes at these unbelievable prices, then borrow the money at fantastic rates and then get a tax credit for doing so," said Chad Costa of Re-Max Executive, who is among the region's top-selling agents. "It is a recipe for an unbelievable buyers' market."
Costa said so many homes have been selling that the number of houses for sale declined dramatically the past six months. But new listings -- mostly bank-owned foreclosures -- have started increasing recently, giving buyers more choices.
There's competition for the best deals, however, and sellers have become choosy about with whom they sign contracts.
"It is imperative that buyers get pre-approved before they enter the marketplace," Costa said. "All sellers in this market require a pre- approval or at least a pre- qualification when the offer is submitted. Besides, the buyers need to know how much they can afford."
More than 700 potential home buyers got advice on how, what and when to buy during Sunday's Homeownership Modesto event at Modesto Centre Plaza.
The event, sponsored by The Modesto Bee and the city of Modesto, offered workshops and informational booths to explain government and private programs designed to help people buy homes.
About 350 people completed an intensive four-hour homeownership training program, which was the largest such HUD-certified educational session ever offered in the region.
Among the things emphasized in that training was the importance of families not committing too much of their income to a mortgage.
The Housing Opportunity Index is based on the same premise. It is calculated based on the assumption that a family can afford to spend up to 28 percent of its gross income on housing.
The index uses home sales data from government records to determine median prices, and it uses federal income estimates for each county. It calculates mortgage costs based on average 30-year, fixed-rate interest with a 10 percent down payment.
Bee staff writer J.N. Sbranti can be reached at email@example.com or 578-2196.