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Old 03-06-2014, 08:09 AM
 
Location: In the Zombie Room
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so this is an interesting article that I read
10 cities where ordinary people can no longer afford homes - Yahoo Finance

Thoughts???
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Old 03-06-2014, 08:37 AM
 
11,115 posts, read 18,186,094 times
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Originally Posted by Halo_in_reverse View Post
so this is an interesting article that I read
10 cities where ordinary people can no longer afford homes - Yahoo Finance

Thoughts???

The "affordability rating" for Asheville is a 90, the highest on the chart shown. "Asheville" is subjective as the recent thread on here regarding Asheville in general area is not only the city; and we don't know where they got their figures from. I know it's Realty Trac and they are fairly reputable, but the motivation for the article itself may not be totally reliable, more information and statistics are needed. Much depends on what the researchers describe as "ordinary people" affordability, compared to price ranges in other states. Someone selling a home in Walnut Creek CA for example, retiring here with deep pockets most likely and a fat pension, investment income etc., won't sneeze at paying $350,000 or $400,000 cash (and more) for their special mtn. home with a view and a golf course nearby. Someone selling a $150,000 home that depreciated grossly in FL and took a loss on their sale there, will most likely want the home they sold in FL here for that same $150,000 and most likely have to take a mortgage. All real estate markets are local.

Mortgages or cash buyers in the Asheville area are also a measure of 'affordability'. A very high percentage of buyers in Western NC pay cash. Especially retirees relocating from other states; so they're not concerned with mortgage rates or closing costs, and might take an equity loan later on.

There is also a good market for investors who purchase condominiums, small vacation rental properties etc., and those prices skew the stats as well. There are so many variables here, as in every tourist destination. But the 90% affordability rating bodes well for the area.
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Old 03-06-2014, 10:45 AM
 
Location: Full Time Resident of City of Asheville
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From the article: (The affordability index represents the median income per county as a percentage of the required income for a typical home purchase, so cities with a rating below 100 are less affordable while those above 100 are more affordable). My guess is the closer you get to the City of Asheville, the lower the "affordability" score would be, since the "90" is apparently based on Buncombe County. There is a noticeable desirability factor, based on what this article describes as "vibrancy", among the cities with lower affordability ratings. However, it doesn't make much sense that NY is very close to Asheville in that rating. I consider myself an "ordinary person", who worked hard, saved money, made sound property decisions resulting in profits, retired and bought a new home in the City of Asheville for cash. It was the "vibrancy factor" that brought me here. That's the distinctive factor of listed cities. This is another good news report for Asheville.
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Old 03-06-2014, 04:21 PM
 
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The article's focus is 'ordinary families'. Ordinary families are neither retired, nor cash buyers.
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Old 03-06-2014, 04:50 PM
 
11,115 posts, read 18,186,094 times
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Originally Posted by daveatgso View Post
The article's focus is 'ordinary families'. Ordinary families are neither retired, nor cash buyers.
When taken into consideration that Western NC and Buncombe County is an attractive relocation area and buyers come from a wide range of price ranges; I set that out in two examples in my post. An ordinary family selling a house for $500K in Cali. would find Western NC very affordable. An ordinary family selling for $150K in some areas of FL may have a problem finding something affordable.

Then, as the article points out, income level goes into the mix of course. Many retirees consider themselves "ordinary" as well. Many "ordinary" families and others also inherit money, or save the old fashioned way. You don't have to be "old" to have a pension or been lucky in investments either.
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Old 03-06-2014, 06:24 PM
 
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Originally Posted by QuilterChick View Post
When taken into consideration that Western NC and Buncombe County is an attractive relocation area and buyers come from a wide range of price ranges; I set that out in two examples in my post. An ordinary family selling a house for $500K in Cali. would find Western NC very affordable. An ordinary family selling for $150K in some areas of FL may have a problem finding something affordable.

Then, as the article points out, income level goes into the mix of course. Many retirees consider themselves "ordinary" as well. Many "ordinary" families and others also inherit money, or save the old fashioned way. You don't have to be "old" to have a pension or been lucky in investments either.
I think it's fair to say that 'ordinary family' is intended to mean 'average family', which would be a husband and wife with X number of kids, one or two jobs, and a mortgage. Any things beyond this are outliers IMO. Baby boomer and CA RE wealth are bubbles that will one day burst. Then the RE market in this area will crash hard, and the average family will then be able to afford living here. Just my opinion, of course.
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Old 03-07-2014, 06:46 AM
 
Location: Full Time Resident of City of Asheville
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The article referenced is focused on "ordinary people". There is no mention of ordinary families consisting of a man/wife and x kids. The definition of "ordinary people" depends on the characteristics of the majority of people buying houses for a given location. If it wasn't for the ordinary retirees and ordinary non-tradtional families that chose to relocate here, Asheville would be an undeveloped uninteresting traditionally conservative mountain town on no one's list. Sorry, but the range of outliers here is a better definition of ordinary people than the assumed one for "traditional families".
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Old 03-07-2014, 08:01 AM
 
11,115 posts, read 18,186,094 times
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Quote:
Originally Posted by Imhere now View Post
The article referenced is focused on "ordinary people". There is no mention of ordinary families consisting of a man/wife and x kids. The definition of "ordinary people" depends on the characteristics of the majority of people buying houses for a given location. If it wasn't for the ordinary retirees and ordinary non-tradtional families that chose to relocate here, Asheville would be an undeveloped uninteresting traditionally conservative mountain town on no one's list. Sorry, but the range of outliers here is a better definition of ordinary people than the assumed one for "traditional families".


Here is a excerpt from the article explaining factors of how all real estate markets are local. The Asheville area/Buncombe County is a vibrant location and as such, (location, location, location) attracts varying types of buyers, and has been for many years. As I mentioned earlier, many cash buyers locate here, except for first time buyers and working singles who buy condos. Prices in subdivisions that attract the average working family are affordable, especially with the lower mortgage rates. When mortgage rates get into double digit territory, that will cause some problems for obvious reasons. Lack of higher paying jobs within a radius of Asheville is a huge factor in affordability for working buyers.

Given a "score" of 90 on the affordability index is quite close to the "over 100 is affordable" comments. Stats are interpreted by +/- scales. I was just looking through MLS listings in the $150K to $250K range, condos, single family homes in family type areas; and 8 out of 10 are "pending sales", in "due diligence" which means subject to acceptance of all inspections .... just within the past month. The market always gets better here from April to October, and Realtors are looking forward to good activity going forward.

Here is the excerpt"

"The problem with the most affordable cities is they tend to be less vibrant than those where demand for housing is strong and prices are rising. So while affordability may still be good in many cities, economic opportunity may be lacking.

Meanwhile, the other big factor that determines whether families can buy a home — even if they may have the money for a down payment — is whether their credit rating is strong enough to qualify for a mortgage. Banks have been loosening up, and some have recently begun to lend to subprime borrowers for the first time since the housing bubble began to burst back in 2006. But for some borrowers, it’s a Catch-22: Lending standards are easing just as affordability is worsening. Some families that might have been able to afford a home a year ago can’t now, even if they’re more likely to qualify for a mortgage.

All of these factors will determine whether the housing recovery continues or peters out, which some economists are starting to worry about. While 2013 seemed to be a nice comeback year for housing after six years of price declines, some analysts think it was illusory. “The housing price gains in 2013 may have been a mirage,” writes Jeffrey Rosen, chief economist at research firm Briefing.com. “First-time home buyers have been effectively priced out of the market.”

Rosen believes a surge of all-cash buyers — who are usually investors buying properties to flip or rent — pushed up prices in 2013, a trend that could reverse itself in 2014 as demand from investors wanes. If so, homes that have drifted beyond the reach of first-time buyers could become more affordable, not less. “Affordability conditions need to revert to where they were in January 2013,” Rosen says.
If that happens, potential homeowners should make sure they don’t miss a historic buying opportunity twice.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

Last edited by QuilterChick; 03-07-2014 at 08:09 AM..
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Old 03-07-2014, 10:05 AM
 
503 posts, read 875,878 times
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Quote:
Originally Posted by Imhere now View Post
The article referenced is focused on "ordinary people". There is no mention of ordinary families consisting of a man/wife and x kids. The definition of "ordinary people" depends on the characteristics of the majority of people buying houses for a given location. If it wasn't for the ordinary retirees and ordinary non-tradtional families that chose to relocate here, Asheville would be an undeveloped uninteresting traditionally conservative mountain town on no one's list. Sorry, but the range of outliers here is a better definition of ordinary people than the assumed one for "traditional families".
From the article:

Three factors are pushing the cost of owning a home beyond the financial reach of ordinary families: Mortgage rates are ticking upwward as the Federal Reserve backs away from the super-easy monetary policy of the past five years. Home prices are rising as the economy recovers. And incomes are barely budging, which means typical families are once again falling behind as they try to bank enough to buy a home.

Meanwhile, the other big factor that determines whether families can buy a home


From your comment:

Asheville would be an undeveloped uninteresting traditionally conservative mountain town on no one's list.


What a blessing that would be. However, I will counter one point. Asheville has never been uninteresting in the past 35 years that I've known it. It has always had a non-conformist subculture, and really doesn't have anything now that it didn't have in the '70s except for over-development, excessive traffic, higher taxes, higher housing costs, more rude people; and, granted, more quality restaurants.
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