Plano housing market most healthy in the US? (Beverly Hills: low income, sale)

[EDS_]

These guys think so. Other DFW cities do well also.


https://www.dallasnews.com/business/...s-housing-list

[Wittgenstein's Ghost]

Originally Posted by EDS_

These guys think so. Other DFW cities do well also.


https://www.dallasnews.com/business/...s-housing-list

Quote from the article: The ranking was based on big city housing markets that provide the most stability, affordability, fluidity and lowest risk of loss.

You have to be kidding me. In a ranking that supposedly affordability 40% of the weight, Plano was picked as the healthiest market. That is insane.

Reading between the lines regarding their methodology, they should clarify that by "affordability," they mean how well people living in Plano can afford their houses in Plano. That is not what is normally meant by "affordability." Plano housing is, relatively speaking, expensive. Plano is a wealthy area, so residents there can afford expensive houses, but the claim that Plano has an especially affordable housing market is a bit deceptive.

[TurtleCreek80]

Originally Posted by Wittgenstein's Ghost

Quote from the article: The ranking was based on big city housing markets that provide the most stability, affordability, fluidity and lowest risk of loss.

You have to be kidding me. In a ranking that supposedly affordability 40% of the weight, Plano was picked as the healthiest market. That is insane.

Reading between the lines regarding their methodology, they should clarify that by "affordability," they mean how well people living in Plano can afford their houses in Plano. That is not what is normally meant by "affordability." Plano housing is, relatively speaking, expensive. Plano is a wealthy area, so residents there can afford expensive houses, but the claim that Plano has an especially affordable housing market is a bit deceptive.

Well of course affordability is relative to the location. Plano's median income is about $80k and the median home sale price is a bit over $300k. That's in line- and remember the median income of homeowners is likely closer to $100k as lower income households tend to rent.

It's really not difficult to understand the analysis behind the ranking.

[EDS_]

Originally Posted by Wittgenstein's Ghost

Quote from the article: The ranking was based on big city housing markets that provide the most stability, affordability, fluidity and lowest risk of loss.

You have to be kidding me. In a ranking that supposedly affordability 40% of the weight, Plano was picked as the healthiest market. That is insane.

Reading between the lines regarding their methodology, they should clarify that by "affordability," they mean how well people living in Plano can afford their houses in Plano. That is not what is normally meant by "affordability." Plano housing is, relatively speaking, expensive. Plano is a wealthy area, so residents there can afford expensive houses, but the claim that Plano has an especially affordable housing market is a bit deceptive.

I think most people understand that sans some mention of another relative income measure the authors mean Plano incomes versus housing costs in Plano.....not Plano housing costs versus incomes in Fairbanks.

[TheOverdog]

Well of course affordability is relative to the location.

Maybe but Plano is just one city in the DFW metro (what really should be the metric). That people who live in Plano (or coastal CA- also on the list) can afford houses in Plano is a tautology - of course they can. The ones who can't don't live there. It should be median salary of the MSA vs median home price.

[Wittgenstein's Ghost]

Originally Posted by TurtleCreek80

Well of course affordability is relative to the location. Plano's median income is about $80k and the median home sale price is a bit over $300k. That's in line- and remember the median income of homeowners is likely closer to $100k as lower income households tend to rent.

It's really not difficult to understand the analysis behind the ranking.

I didn't have any difficulty understanding the analysis. In fact, I think I gave a pretty accurate synopsis of it in my post. I simply don't think this is the normal use of "affordable." As TheOverdog sort of referenced above, we have a bit of a chicken-and-egg scenario here. Of course people who own houses in Plano can afford houses in Plano. This analysis is really just a statement about how financially stretched Plano homeowners are relative to homeowners in other areas. It isn't actually a statement about what a low-income person could afford in the area, which is the normal sense of "affordable."

Originally Posted by EDS_

I think most people understand that sans some mention of another relative income measure the authors mean Plano incomes versus housing costs in Plano.....not Plano housing costs versus incomes in Fairbanks.

Plano is a wealthy spot in a larger, more diverse MSA. The fact that people who have bought houses in Plano haven't stretched themselves as far as people in other areas doesn't mean Plano housing is affordable. "Affordable," at least in the normal sense, means that housing can be purchased by low-income people. The fact that Plano doesn't have any low-income people doesn't suddenly mean the housing is affordable.

[EDS_]

Originally Posted by TheOverdog

Maybe but Plano is just one city in the DFW metro (what really should be the metric). That people who live in Plano (or coastal CA- also on the list) can afford houses in Plano is a tautology - of course they can. The ones who can't don't live there. It should be median salary of the MSA vs median home price.

Absolutely not. It simply does not matter if people in a broad area can or can't afford Plano housing except as a measuring stick.

The authors are making the point, among a bunch of others, that Plano is a very healthy housing market in terms of affordability because for the people who actually live in Plano incomes are such that Plano housing is affordable - sorry for the loop.

[TurtleCreek80]

Originally Posted by Wittgenstein's Ghost

I didn't have any difficulty understanding the analysis. In fact, I think I gave a pretty accurate synopsis of it in my post. I simply don't think this is the normal use of "affordable." As TheOverdog sort of referenced above, we have a bit of a chicken-and-egg scenario here. Of course people who own houses in Plano can afford houses in Plano. This analysis is really just a statement about how financially stretched Plano homeowners are relative to homeowners in other areas. It isn't actually a statement about what a low-income person could afford in the area, which is the normal sense of "affordable."



Plano is a wealthy spot in a larger, more diverse MSA. The fact that people who have bought houses in Plano haven't stretched themselves as far as people in other areas doesn't mean Plano housing is affordable. "Affordable," at least in the normal sense, means that housing can be purchased by low-income people. The fact that Plano doesn't have any low-income people doesn't suddenly mean the housing is affordable.

The chart in the article clearly states housing costs as a percent of income. By that measure, Plano is very affordable.

The definition of affordable is not directly tied to low income household affordability or the breaking point at which everyone can afford a house. Affordable means "within ones financial means." Housing afforability is usually tied to local household income. Again, with Plano's median income at $80k and Collin County's between $85-90k, housing in Plano IS affordable.

[Wittgenstein's Ghost]

Originally Posted by EDS_

Plano is a very healthy housing market in terms of affordability because for the people who actually live in Plano incomes are such that Plano housing is affordable - sorry for the loop.

Yes, and I don't doubt that point. I am simply saying that this not what people typically mean when they say "affordable housing." If Beverly Hills (arbitrary example) only consists of billionaires, and no one who isn't extremely wealthy can afford to live in Beverly Hills, it makes no sense to say that Beverly Hills is an affordable housing market because all of the people who live there can easily afford their houses.

I'm not saying this sort of analysis isn't useful. It certainly is. It probably means there's little chance of a foreclosure-driven housing crash, among other things. I just don't think this is what most people mean when they say "affordable housing."

[Wittgenstein's Ghost]

Originally Posted by TurtleCreek80

The chart in the article clearly states housing costs as a percent of income. By that measure, Plano is very affordable.

I agree. I'm not denying that. Again, I am having no difficulty in understanding the methodology used. I didn't say the article wasn't clear.

Originally Posted by TurtleCreek80

The definition of affordable is not directly tied to low income household affordability or the breaking point at which everyone can afford a house. Affordable means "within ones financial means." Housing afforability is usually tied to local household income. Again, with Plano's median income at $80k and Collin County's between $85-90k, housing in Plano IS affordable.

I disagree. I think "affordable housing" normally means housing that be afforded by people who are not wealthy, and in some cases, low income folks. If all of DFW exhibited this phenomenon -- expensive houses but even higher incomes -- I might be more inclined to agree with this argument. But Plano is a suburb that employs people at the local McDonalds and retail outlets, car mechanics, etc. Can those people afford to live in Plano? Of course not. Many of them live elsewhere and drive into Plano. That an area is so expensive that no low income folks can afford to live there, or they have to live in surrounding suburbs, doesn't suddenly make it affordable.

Like I said to EDS, I'm not saying there's no value in this kind of analysis. I just think it's deceptive to call Plano's housing market particularly affordable because only wealthy people can afford to live there, and those wealthy people can easily afford their houses.