Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Million dollar homes make up less than 2 percent of the market in 44 of the nation’s 100 largest metropolitan areas, according to a new analysis released last month by Trulia. But here in Fairfield County, Connecticut, the rate is 15 times higher, making the area one of Trulia’s top million-dollar metros in the area.
In total, 29.7 percent of Fairfield County listings on the real estate website are priced at or above $1 million, the analysis states. That really sets the market apart from the rest of the nation.
People spend a lot more of their income than they used to on housing, especially in desirable places like greater NYC and the SF Bay Area. My parents combined to make about $250k and to them spending $600k on a house still seems insane. It's partly generational I think, but people save much less now.
A well-educated professional married couple who maybe each got some equity in a condo or something through their 20s and can put down several hundred thousand getting a place after getting arrived, can afford the mortgage without a huge issue. There are tons of such couples in the area and other expensive places.
The single-breadwinner nuclear family is definitely fading.. You just can't compete with two incomes usually when it comes to house hunting.
A great exercise is to compare the median family incomes in a town to the median home value, particularly in a place with a distorted housing market like Fairfield County. Many show nearly a 10:1 ratio of home value to gross income.
People are just astonishingly leveraged. Sure, there's some distortion because there are wealthy retirees with relatively low incomes, people who have inherited wealth that's not necessarily reflected as income, people who moved to town decades ago when it was less expensive, etc. But let's cut that figure in half, as an exercise. Having a 5:1 housing debt : gross income ratio (which is not considered remarkable by any means) would have been absolutely inconceivable just 50 years ago.
It seems pretty clear that widely-available, insane mortgages are driving housing prices. E.g.: Pass a law eliminating the ability to get a mortgage for more than $100k. The number of houses asking >$1mm would be, at the very, very least, cut down by 70%. Most home buyers, particularly families, don't have anywhere near that kind of liquidity, even people making a substantial income.
And of course the two-parent working families thing is, in many ways, counterproductive. When people have more income and can afford to pay more, prices go up so it ends up as, on the whole, largely a wash. Except for people who don't want to delegate their child-care to strangers or who don't want two incomes for other reasons, who are pinched.
Imagine that low priced houses sell quickly, and high priced houses sell slowly.
The average price of a house on the market will then be quite high. But the average selling prices of houses will be much lower.
This is definitely true, and its why the "sold" averages/medians you see are typically drastically lower than the listing price averages/medians. I strongly doubt 30% of FFC homes are actually worth >$1mm.
That's not at all the point being made, actually. The point is that this survey looked only at listing prices, not sale prices. In addition to some discount off of sale price (which is what the figures you refer to show), the homes that actually sell tend to be much less expensive than the homes that are merely listed for sale.
E.g., the median sale price, per Zillow, in Darien is $500k lower than the median list price over the last year. It's about a $450k difference in New Canaan, $500k in Weston, $600k in Westport, $1mm in Greenwich, and about $300k in Wilton.
A pretty basic inference to draw from that is that the types of houses that are listed in such towns are not representative of the types of houses that eventually sell in those towns. Why? Longer time on the market for higher-priced homes, people trying to take advantage of a rising market by pricing high-end houses too high, etc.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
