Gov. announces $70M in low-income housing

February 7, 2008 1:48:56 PM PST
The newest indicator that the economy is in trouble comes from the National Association of Realtors. It says that pending U.S. home sales fell 1.5-percent in December to the second lowest reading on record. In California, the real estate experts are revising their forecasts downward. However, help is on the way.

Governor Schwarzenegger made a brief visit Thursday to Palo Alto. He announced there would be about $70 million to build low-income housing throughout the state. Five million dollars will go to Palo Alto for 50 low-income apartments for seniors.

Low-income defined as a family of four making between $17,000 and $35,000 per year.

The middle class could use some help, too, according to the California Association of Realtors. They say home price declines in California are going to be twice as steep as previously estimated -- from four-percent to 10-percent, bringing the median statewide home price down to $518,000.

If you're looking for some good news, it means the market will hit bottom faster and then start rebounding faster.

In many parts of the Bay Area, things aren't so bad. A spokesman for the Silicon Valley Association of Realtors says all over the peninsula, home prices will continue to climb.

"We don't have the luxury of land where we can just keep building and building. So for us there continues to be a shortage of housing and I think that will keep prices on the uptick, not as much as it has been in the years past, but I still see that median prices will continue to increase," says Nadr Essabhoy with the Silicon Valley Association of Realtors.

The median price in Palo Alto is currently $1.6 million.