April 19th - The Home Affordability Crisis: Are You Being Priced Out Of The Real Estate Market?

Unaffordability Rising In Hot Markets, Going Down In Others

In today’s interview with Terry Story, we talk about rising affordability problems in certain local housing markets, reasons why the market is not generating more sales turnover, and understanding deed restrictions before buying a home. 
Affordability comes down to the ratio of home prices to wages, and the stats have been heading in the wrong direction—towards unaffordability—in roughly 25% of national markets.  Wage growth isn’t keeping pace with rising home prices, and the result is that would-be buyers, especially on the lower end, are being priced out.  Offsetting this trend to some degree is an uptick in wages in 50% of markets.  This silver lining is mitigated by the fact that the wage growth is occurring in places that aren’t seeing a lot of interest from people looking to relocate: Wayne County in Michigan, Trumbull County, parts of Ohio, Wisconsin, Georgia, and New York state, for example.  The deteriorating affordability problem, meanwhile, is affecting more sought after locales like California, Hawaii, Manhattan, and Brooklyn.  The number of people who are willing to bail on Maui or San Francisco or NYC to start over in Clayton County, Georgia is very finite, if not negligible. Expect these discrepancies between increasingly unaffordable markets and cheaper ones with gradually improving economics to persist and widen for the foreseeable future.