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How would you know people are living pay check to pay check? Do you mean the median income for an area? If that is the case, I can see that to mean something though. Pay check to pay check living can also come from poor management (spending side) and not just the income side. My zip code has a median house hold income of 85K in 2009, probably higher now. People buying house here, I would think, are better off than most other places.
I would think median income is a good indicator. For example, in Spring Hill, the median household income is around 40K per year. This is pretty dead on. I know plenty of families there who were making about that. (I used to work at a private school there and we would have to look at income in order to award need-based scholarships.) The thing is, many of these families making such low salaries were living in homes that were pretty expensive comparatively. Both my husband and I knew it was only a matter of time before they could no longer afford to do so. That's a big warning sign, in my opinion … people who are living beyond their means.
You are right … it could also mean poor management. And that's not something you can research on the internet. Unfortunately you just can't tell that unless you get to know the people living in the area first. I guess that's why it's a good idea to rent first in unfamiliar areas before buying.
I wonder if people could look at the median income and then the median housing values of an area to determine how safe it is from going through a foreclosure problem. Spring Hill's median household income is about 40K per year, but it's median house value for detached homes was close to 200K. I'm no statistician, but that seems a little off to me. If my family brought in 40K per year, there is NO WAY I'd purchase a home that was anywhere near 200K!
I would think median income is a good indicator. For example, in Spring Hill, the median household income is around 40K per year. This is pretty dead on. I know plenty of families there who were making about that. (I used to work at a private school there and we would have to look at income in order to award need-based scholarships.) The thing is, many of these families making such low salaries were living in homes that were pretty expensive comparatively. Both my husband and I knew it was only a matter of time before they could no longer afford to do so. That's a big warning sign, in my opinion … people who are living beyond their means.
You are right … it could also mean poor management. And that's not something you can research on the internet. Unfortunately you just can't tell that unless you get to know the people living in the area first. I guess that's why it's a good idea to rent first in unfamiliar areas before buying.
I wonder if people could look at the median income and then the median housing values of an area to determine how safe it is from going through a foreclosure problem. Spring Hill's median household income is about 40K per year, but it's median house value for detached homes was close to 200K. I'm no statistician, but that seems a little off to me. If my family brought in 40K per year, there is NO WAY I'd purchase a home that was anywhere near 200K!
I would think that the median income number is possibly skewed by the large population of retirees who have very little or no income. I completely agree that there aren't enough higher-income households here to offset that, probably very few. Just on my street, I only know of two other households where someone goes to work every day. Everyone else here appears to be retirees/snowbirds. Alot of them are still trying to figure me out, which I find amusing. It works for me, because it's quiet and everyone keeps their properties looking nice.
People in general have a tendency to overreach. It happens all over the country. I lived in what was described as an affluent town in PA before moving here. School district is consistently rated tops in the state. There are million-dollar plus homes down to $200K plus homes. Taxes were higher (more than double what I am paying here). Houses, if priced right, generally sell as soon as they hit the market because it really is a great place to live. But, there were plenty of foreclosures there too because alot of people bought more house than they could afford because they wanted their kids in that great school district. There's no industry to speak of there either, everyone commutes somewhere else for jobs other than the retail/restaurant variety.
I would think median income is a good indicator. For example, in Spring Hill, the median household income is around 40K per year. This is pretty dead on. I know plenty of families there who were making about that. (I used to work at a private school there and we would have to look at income in order to award need-based scholarships.) The thing is, many of these families making such low salaries were living in homes that were pretty expensive comparatively. Both my husband and I knew it was only a matter of time before they could no longer afford to do so. That's a big warning sign, in my opinion … people who are living beyond their means.
You are right … it could also mean poor management. And that's not something you can research on the internet. Unfortunately you just can't tell that unless you get to know the people living in the area first. I guess that's why it's a good idea to rent first in unfamiliar areas before buying.
I wonder if people could look at the median income and then the median housing values of an area to determine how safe it is from going through a foreclosure problem. Spring Hill's median household income is about 40K per year, but it's median house value for detached homes was close to 200K. I'm no statistician, but that seems a little off to me. If my family brought in 40K per year, there is NO WAY I'd purchase a home that was anywhere near 200K!
That's the key right there! When the median home value and median house price are out of wack, a red flag for an area, if you ask me. That place need outside money to sustain it long term (or house price have to come down) and unless you are big city with outside money pouring in, it ain't gonna sustain. That's simple demand and supply.
People in general have a tendency to overreach. It happens all over the country. I lived in what was described as an affluent town in PA before moving here. School district is consistently rated tops in the state. There are million-dollar plus homes down to $200K plus homes. Taxes were higher (more than double what I am paying here). Houses, if priced right, generally sell as soon as they hit the market because it really is a great place to live. But, there were plenty of foreclosures there too because alot of people bought more house than they could afford because they wanted their kids in that great school district. There's no industry to speak of there either, everyone commutes somewhere else for jobs other than the retail/restaurant variety.
I don't buy that people buy-in what they can't afford just for their kids to be in good school. No, they wanted it to be there as if the richness will rub off in them. Kid's school are just an excuse . Most people think buying in such place is a safe bet, which make sense in many places but over reach way more than they can afford? That's just a risky decision they took. So, they are gonna live with the consquences.
I would think that the median income number is possibly skewed by the large population of retirees who have very little or no income. I completely agree that there aren't enough higher-income households here to offset that, probably very few. Just on my street, I only know of two other households where someone goes to work every day. Everyone else here appears to be retirees/snowbirds. Alot of them are still trying to figure me out, which I find amusing. It works for me, because it's quiet and everyone keeps their properties looking nice.
That definitely may play into things in Spring Hill. Too bad they don't factor that out when providing the demographic information. Spring Hill is made up of many retirees and snowbirds.
The 'housing bubble' issue is hard to predict. It seems unlikely that the perfect storm circumstances that led to the last one will repeat again. I work in real estate in Hillsborough and Pinellas and lenders have cracked down hard, very hard. Prices came down an average of 40% in the area during the bust and the market was flooded. About 3-4 years ago prices started stabilizing at these lower levels, buyers began to feel more confident and the excess inventory was slowly absorbed. Inventory reached historically normal levels About 2 years ago prices started to slowly climb -at historically NORMAL levels, and the market once again seems to be determined by supply and demand (a rise in interest rates should have some negative impact on housing prices as the pool of buyers is reduced). Over the last year I have been in several bidding wars as inventory is now low in some of the more desirable areas (Westchase is a prime example). Properties that are correctly priced and upgraded go under contract within a few days of hitting the market in these areas. Appraisers need to factor in supply and demand and the trend in rising prices and appraisals have been coming in higher, which contributes to the upward swing in prices. So to answer your question assume it is a somewhat normal real estate market, at least for the near future, and use the criteria you normally would when making an investment in property. 3 words - location, location, location. You can't go wrong with Westchase, it is very homogeneous, it is a planned well maintained, beautiful community and every street in nice. You won't find that in many areas around here.
I don't buy that people buy-in what they can't afford just for their kids to be in good school. No, they wanted it to be there as if the richness will rub off in them. Kid's school are just an excuse . Most people think buying in such place is a safe bet, which make sense in many places but over reach way more than they can afford? That's just a risky decision they took. So, they are gonna live with the consquences.
You might have a point, but I can truly attest that some of the surrounding school districts were horrid. A family a few doors down from me at the old place lost their house (short sale) because the wife lost her job and they couldn't maintain the $2500+ mortgage. I know for a fact they moved there for the blue ribbon schools. Others, I am sure just wanted to live in the ritzy neighborhood. I ended up there because when I married my wife she didn't want to pull her kids out of that school district.
You might have a point, but I can truly attest that some of the surrounding school districts were horrid. A family a few doors down from me at the old place lost their house (short sale) because the wife lost her job and they couldn't maintain the $2500+ mortgage. I know for a fact they moved there for the blue ribbon schools. Others, I am sure just wanted to live in the ritzy neighborhood. I ended up there because when I married my wife she didn't want to pull her kids out of that school district.
I completely agree with this, but I think it is multi-faceted. Parents want their children in the best schools, so they move to an area that has quality schools. Because good schools typically are in wealthier areas, housing tends to be expensive. I don't begrudge these people for wanting the best education for their children - my goodness, it is so necessary in today's crazy economy! However, they could achieve the same goal (getting their child into an excellent school) by living with less. This may mean moving to a great area but living in an apartment or town home or a smaller home. Unfortunately, people DO get caught up in wanting to keep up with their neighbors in the community, and this traps them into something they cannot afford.
Thankfully, however, lenders are far more careful than they were before. Obtaining a mortgage now is not as easy as it once was. We just went through it last year. Although we have excellent credit, very little debt, and solid income, we still had a TON of hoops to jump through! It was a pain, but if it prevents another bubble from happening, I'm all for it.
The 'housing bubble' issue is hard to predict. It seems unlikely that the perfect storm circumstances that led to the last one will repeat again. I work in real estate in Hillsborough and Pinellas and lenders have cracked down hard, very hard. Prices came down an average of 40% in the area during the bust and the market was flooded. About 3-4 years ago prices started stabilizing at these lower levels, buyers began to feel more confident and the excess inventory was slowly absorbed. Inventory reached historically normal levels About 2 years ago prices started to slowly climb -at historically NORMAL levels, and the market once again seems to be determined by supply and demand (a rise in interest rates should have some negative impact on housing prices as the pool of buyers is reduced). Over the last year I have been in several bidding wars as inventory is now low in some of the more desirable areas (Westchase is a prime example). Properties that are correctly priced and upgraded go under contract within a few days of hitting the market in these areas. Appraisers need to factor in supply and demand and the trend in rising prices and appraisals have been coming in higher, which contributes to the upward swing in prices. So to answer your question assume it is a somewhat normal real estate market, at least for the near future, and use the criteria you normally would when making an investment in property. 3 words - location, location, location. You can't go wrong with Westchase, it is very homogeneous, it is a planned well maintained, beautiful community and every street in nice. You won't find that in many areas around here.
With your real estate knowledge, what do you think of the following places:
Dunedin
Palm Harbor
Safety Harbor
Countryside
I've always ranked them up there with Westchase and would be interested to get a realtor's perspective on them.
You know your thread made me curious and looked at some of the listing in my area and looked up how much these people paid for their house when they bought it. Most of them are listing a house they bought in 2005/2006. Any bell rings? And guess what most are asking a little higher or breaking even to the price they paid for it . Of course, they are asking. One needs to look at the sold price to really see what's going on. Talk about recovery if you buy-in a good neighborhood. So, from the little sample I pulled in my neck of woods, people are getting under the house they bought in the bubble.
When did we get back to the bubble price? I have no idea.
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Unfortunately you just can't tell that unless you get to know the people living in the area first. I guess that's why it's a good idea to rent first in unfamiliar areas before buying. 
