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Of course a majority of realtors, are going to encourage 7 to 8 times household income on a mortgage compared to traditionally when people purchased homes that were around 3 times household income.
I know there was a poster a while back who claimed that the biggest expense a majority of household have being a mortgage or rental payment has nothing to do with inflation.
The government appointed federal reserve lies about housing prices because if they were truthful the inflation rates would be much, much higher and the interest rates would rise.
Those in real estate and mortgage lending absolutely love it when people pay 8 times their household income.
I posted yesterday that the real estate shortage is a massive hoax, vacant housing units have skyrocketed in the last 20 years. There are far more units held off the market nationwide now to create an artificial scarcity so that many people pay 8 times their household incomes in mortgages, compared to traditional 3 times.
It looks like median home value is much higher than that now in Wake County.
Interesting, how the "median home price" is so much different than the "median home value". The Median Home Value is off a computer algorithm or from valuations years ago.
Who knows how the "median home value" is calculated.
People in real estate have a vested interest in wanting people to pay 7 or 8 times their income for a mortgage. Of course, they don't want people paying just 4 times their income for mortgages because that means less fiat currency for them.
there's no reason to lash out and make wild claims just because someone makes a counter argument.
When you find me saying "You should spend 8x your income" let us all know. When I say "Oh, there's no vacant properties", let me know. Meanwhile, the doom and gloom and crisis-level situation you HAVE claimed for > 1 year continues on, showing your crystal ball is kind of foggy.
You're using MEANINGLESS stats, unless you can show us your R/E portfolio that is doing quite well, and how you chose it based on these principles.
A housing unit is vacant if no one is living in it at the time of the interview, unless its occupants are only temporarily absent. In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere. New units not yet occupied are classified as vacant housing units if construction has reached a point where all exterior windows and doors are installed and final usable floors are in place.
So, between tenants counts.
Second homes count.
New construction - that may even be sold but awaiting finishing and closing - they might count depending on when the "interview" is done
I grew up in an area with "actual longer winters", and I'll die before I go back
Yeah, it "illustrates" why many keep moving to mediocre to economically backward smaller metro areas of Florida when many smaller metro areas of the Upper Midwest are far more economically prosperous, (not accounting for moves strictly from retirees).
The Western United States is really leading the way when it comes this tremendous housing bubble.
The median home prices are skyrocketing coast to coast, but the Western United States is basically similar to tulip-mania these days.
Median home prices of 14 times the per-capita income in Arizona, 21 times the per-capita in California and 20 times per-capita income in Utah.
In Arizona, for instance the per-capita income is $30,000 but the median list price is $427,000 for a home.
Interestingly, Arizona which is one of the poorest states per-capita now has per-capita debt burdens similar to New Jersey which is one of the most affluent states in America.
Arizona residents tend to have very large families, the utility bills are extremely high in much of the state and taxes are increasing rapidly for many also.
In Utah, the average list price of a home is $599,000 compared to $190,000 in Kansas. Kansas however has per-capita incomes that are about 10% higher.
California median home list price: $799,500 Per-capita income: $36,955
Colorado median home list price: $552,000 Per-capita income: $38,226
Idaho median list price: $496,000 Per-capita income: $27,970
West Virginia median list price: $158,000 Per-capita income: $26,480
You should look at house price to income ratio in terms of household income, not per capita income, for the reason bolded. So your ratios are overstating the degree of the problem.
I completely agree though that homes are overpriced if they exceed 3-4x annual household income.
You should look at house price to income ratio in terms of household income, not per capita income, for the reason bolded. So your ratios are overstating the degree of the problem.
I completely agree though that homes are overpriced if they exceed 3-4x annual household income.
The entire western US is going to be very unaffordable with exorbitant price to income ratios of 5-8x annual median household income in most larger metro areas in the next couple of years. The caveat with the western US is that it doesn't have many of the medium sized or smaller metro areas and less expensive micropolitan areas to move to like many areas of the eastern US. The West is either increasingly expensive metro areas, VERY expensive mountain towns across many areas of the Rocky Mountains, or very remote towns with no amenities and services and nothing around for 1-3 hours in any direction or more. The next run up in prices will be other areas of the Southeast, moving northward into the Upper South or Lower Midwest next.
I live in austin 15-20 minutes from downtown. my neighbors are overwhelmingly retired professional state government employees who bought their homes in the 80s and raised their kids 20 years ago. we are one of only three couples, the other two are transplants from california and DC, who moved to this street within the last 10 years. there isn't much turnover.
state employees with kids could not afford to buy a home in my neighborhood now. i find that amazing....and sad.
Last edited by texan2yankee; 03-09-2021 at 02:17 PM..
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
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Quote:
Originally Posted by GraniteStater
Yeah, it "illustrates" why many keep moving to mediocre to economically backward smaller metro areas of Florida when many smaller metro areas of the Upper Midwest are far more economically prosperous, (not accounting for moves strictly from retirees).
Lol, the only economically prosperous metro's in the Midwest are Chicago, Minneapolis and Detroit; and of those, only Minneapolis is "upper midwest"
I'm now working in the 2nd biggest metro in the entire country (LA), and work is busy
Yep, I was only 1 in 3 of dozens of acquaintances, friends, and family that knew the 2006 bubble wasn't sustainable. Everyone looked at me like I was stupid and told me it was just going to keep going up.
Some who bought into the bubble went bankrupt, others muddled through but were house poor for almost a decade and finally got out of them. My friends uncle sold high, then cashed out 3 homes in a development that went stale after the crash, rented them out, and then sold them all for about 2-1/2X what he paid for them.
The economic graphs don't lie, there is a 10-year pattern of boom-bust. If I had a place ready to list for sale I'd do it right now, rent a place for the interim, and wait for the correction.
Far too many Americans are scared to move to areas with an actual longer winter.
But over the years places are seeing less and less of a winter and out past 70 years it will be much less of any cooler weather most everywhere on the planet..
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