Here’s some interesting news: The California Association of Realtors reported that only seven of California’s 32 counties have homes priced within the average homebuyers’ reach. Seven out of 32 counties! Statewide, the median home price was just over $446,000 in 2015’s second quarter, which is 50 percent higher than what most California income makers can afford. The state’s real estate market remains hot but appears to be closed to a majority of homebuyers. This is where you come in.

These seven counties are priced just right, and investors seeking residential property can use this data to increase the odds of their fix-and-flipped/rehabbed homes being sold upon construction completion. People may have hopes for a dream home in a certain neighborhood, but ultimately, if they want to buy, they need to buy where they can afford it. As an investor, you have plenty of options — and buyers — in California’s most affordable counties.

Where to Buy California Homes: Some Stats to Consider

Let’s take a look at some of the statistics from the CAR report. It probably won’t surprise you that San Francisco is California’s least affordable county. The median income is $75,910, meaning that people can afford a $383,670 home—however, the average house price is 225 percent higher at $1.2 million. The story is similar for the other least affordable counties, most of which are in the Bay Area. The disparities are extreme, and an additional 23 out of California’s 32 counties have real estate markets priced too high for the median buyer. But who exactly is the median buyer?

The Seven Counties Where Affordability Reigns

If the numbers don’t look promising for potential homebuyers with lower-to-middle-class incomes, you know that it equally doesn’t bode well for real estate investors trying to make a profit on any fix-and-flip or residential rehab. The pool of buyers is small and competitive, so you need to go elsewhere. Here’s a closer look at the CAR report on affordable California homes and the seven counties that round out the top of the list:

County Median Income Median Home Price Median
Income Affordability
$ Difference % Difference
Kings $48,220 $186,330 $243,730 -$57,403 -23.6%
Tulare $41,340 $188,740 $208,920 -$20,184 -9.7%
Merced $45,580 $203,930 $230,350 -$26,424 -11.5%
Madera $42,820 $215,710 $216,440 -$730 -0.3%
Fresno $42,920 $216,160 $216,910 -$755 -0.3%
San Bernardino $50,640 $222,310 $255,970 -$33,659 -13.1%
Shasta $46,870 $231,820 $236,910 -$5,090 -2.1%


These numbers present quite a different story than the numbers for San Francisco and other top counties. While all of seven of these counties show promising median home prices, real estate investors should particularly note the difference between home price and affordability.

Alongside affordability, the limited supply of middle-income housing is also an issue. According to CAR, less than 29 percent of California homes are priced under $304,000, and this includes condominiums and townhomes. Of the seven affordable counties, Kings, Merced, and San Bernardino have 50 percent or higher density of affordable homes.

What This Means for Investors: The Demand for Median-Income Housing

It’s a simple case of supply and demand: The demand for median-income housing is much higher than high-income housing. The buyers will go to where the market is affordable, and smart real estate investors will be there waiting for them. Properties in these areas are less expensive to acquire and generally less expensive to rehab, meaning the entire rehab process will be less costly. The best part? Once the house is ready for sale, you have a greater pool of homebuyers to solicit.

Multiple properties are for the taking in these affordable counties, and you’ll have homebuyers waiting once yours is ready to sell. And if you need some extra cash, Socotra Capital can finance your fix-and-flip or residential rehab with a hard-money loan. Contact us today to learn more!