Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Affordable & unaffordable real estate markets
Old 01-26-2005, 08:28 AM   #1
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Affordable & unaffordable real estate markets

Here's Bankrate.com's version of the 25 most-affordable and least-affordable housing markets.

The National Association of Home Builders ranks 162 metropolitan areas by estimating the percentage of homes sold that would be affordable to a family earning the area's median household income. Nine of the top 10 most-affordable markets in the National Association of Home Builders' Housing Opportunity Index are in Ohio, Michigan or Illinois. All of the top 10 least-affordable housing markets are in California.

http://www.bankrate.com/dls/news/mor...1.asp?print=on
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 09:19 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Re: Affordable & unaffordable real estate markets

I think affordable in this context compares median household income or some such measure of income to median house price.

For retired people, I think the most useful is raw data on cheap housing costs. Since most of us will not be working, the level of income in the community isn't very important except for whatever it might say about livability.

Anyone know a source for information on real estate prices, rentals etc.?

Mikey
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 09:58 AM   #3
Thinks s/he gets paid by the post
Hyperborea's Avatar
 
Join Date: Sep 2002
Location: Silicon Valley
Posts: 1,008
Re: Affordable & unaffordable real estate markets

Median home price to median income measures are not a good indicator of affordability or market "bubble-ness". There are some markets where there is a bimodal distribution of incomes (a big hump in the lower income grouping and a big hump in the upper income grouping and very few at the median). This occurs in markets that have a concentration of very high income earners (often in a small number of professions).

Another factor that can skew this kind of affordability measure is immigration into the community. If enough people move into a community with wealth or income from outside the community (retirees, telecommuters, overflow from nearby centres of high income, etc.) that is higher than can be earned locally then that will drive up housing prices. Natives to that city or region will then find that housing prices climb out of their reach. Examples of this are probably communities around New York and the SF Bay Area. The locals hold down jobs at the grocery store, school, etc. while the high income earners who work in finance in New York city or software in the SF Bay Area drive up the median home price.
__________________
Hyperborea is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 10:07 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Affordable & unaffordable real estate markets

[quote]I think affordable in this context compares median household income or some such measure of income to median house price.

For retired people, I think the most useful is raw data on cheap housing costs. Since most of us will not be working, the level of income in the community isn't very important except for whatever it might say about livability.

Anyone know a source for information on real estate prices, rentals etc.?

Mikey:
Good point, and probably would take a sociologist, rather than a real estate expert to explain the Calif. spread between local wages and the cost of housing.
I am a native Californian, and this spread has always amazed me.
I think one fact about California that comes into play, is the acceptance that immigrants find out here. In the Bay area of Calif. for instance, I have seen two families buying one home to get a foothold on home ownership.
It is truly different than any other area I have seen.
I have been waiting for the other shoe to drop, since buying my first home in 1964
Jarhead
__________________
Jarhead* is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 10:24 AM   #5
Recycles dryer sheets
 
Join Date: Oct 2004
Location: Seattle
Posts: 85
Re: Affordable & unaffordable real estate markets

Anyone know a source of information on real estate prices, rentals ,etc?


try www.realtor.com
__________________
gwix98 is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 04:55 PM   #6
Dryer sheet wannabe
 
Join Date: Jan 2005
Posts: 17
Re: Affordable & unaffordable real estate markets

Housing prices around here (Dallas/Fort Worth metroplex) seem affordable and in most markets have not budged much in the last 10 years. But, property taxes are a killer. For our home property taxes are almost as much as we are paying in interest 1 year into our 15 year 5% note. So, if you are going to be a house rich and income poor retiree this area is not the place. The tax man taketh about 2.5 grand per year per 100K of appraised value. Homeowners insurance is a killer too here in the buckle of the southern plains baseball size hail belt.

So - look at all the costs when considering housing costs.
__________________
The Man's pawn number 34,672
BilltSuperTester is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 05:21 PM   #7
 
Posts: n/a
Re: Affordable & unaffordable real estate markets

I think Texas real estate prices are generally very low, compared to other areas I am familiar with, even the DFW metroplex if compared to other large urban areas.
Outside of the larger cities, the pricing advantages in Texas over the northern rural midwest may be slight but
the weather is a hell of a lot better

JG
__________________
  Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 05:31 PM   #8
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Re: Affordable & unaffordable real estate markets

Quote:
I think Texas real estate prices are generally very low,...
They are on the increase in the Texas Hill Country. Too many people want to own a few acres "away from it all" but only an hour or so from Austin or San Antonio. Don't even think about moving here.
REW
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 07:32 PM   #9
Recycles dryer sheets
 
Join Date: Jan 2004
Posts: 188
Re: Affordable & unaffordable real estate markets

I bought my small acreage ranch in Texas Hill Country about 4 years ago at $6500 per acre on the highest ridge in the county.

I just finished negotiating and am awaiting closing on 11 1/2 acres more to capture more of the ridgeline next to my place. Am againg paying a bit more than I feel it should be at $8200 an acre.

This additional acreage allows me to better preserve my agricultural exemption on taxes ... rate is just over $2 per acre .. keep anyone from building in my view ... (see my online photo website, check my member profile for it)
... and since I have enough market exposure, it will serve as a good investment as the boomers from San Antonio (50 minutes away), and Austin (1 hour away) begin looking for their own small acreage ranch. Being born in 1946 I have always been able to predict boomer behavior by my own wants and needs.

I figure by 2007 - 2011 when the masses begin to retire the land will be much more valuable. Time is running out for anyone who wants to stay ahead of this curve. Buy your special place now ... do not wait much longer!

Raw and just 10 miles closer to the cities is going for $10,000 per acre and up for small parcels. ! and 2 acres 'estate lots' near shopping are going $15,000 - $20,000 ...

__________________
Ol&#039; Rancher<br /><br />I wake up in the morning with nothing to do, and by the end of the day, I feel lucky if I&#039;ve gotten less than half of it done.
Ol_Rancher is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-26-2005, 08:46 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: E. Wash
Posts: 1,057
Re: Affordable & unaffordable real estate markets

Quote:

I figure by 2007 - 2011 when the masses begin to retire the land will be much more valuable. Time is running out for anyone who wants to stay ahead of this curve. Buy your special place now ... do not wait much longer!

Raw and just 10 miles closer to the cities is going for $10,000 per acre and up for small parcels. ! and 2 acres 'estate lots' near shopping are going $15,000 - $20,000 ...
Old Rancher,
One word of caution--watch out for the city dwellers. I will agree in your part of the world probably less risk, but the in the environmental kook world we have in much of the West, there seem to be a different perspective about property development. In King Co Wash (Seattle) the greenies (County Govt is controlled urban dwellers--8 of 11 councilpersons) have decided everything outside the urban growth zone has to be "protected" by new zoning rules requiring owners to keep at least 65% of their property in native cover. (Minimum tract size is already 5-10 acres). Effectively kills development for many owners especially when coupled with separate state laws relative to wetland buffers and stream bank set asides (protects salmon). One guy with 10 acres could not even add a separate garage much less subdivide. Results is more that one ER and R has seen their development rights and returns eliminated.
Watch out for those city folks who want to play in your yard while you pay the cost.
NWsteve
__________________
nwsteve is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-27-2005, 06:31 AM   #11
Dryer sheet aficionado
 
Join Date: Apr 2005
Posts: 49
Re: Affordable & unaffordable real estate markets

"here in the buckle of the southern plains baseball size hail belt"

Bill, too funny (but true).
__________________
Janie is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-27-2005, 07:07 AM   #12
Full time employment: Posting here.
 
Join Date: Aug 2004
Posts: 909
Send a message via ICQ to Marshac Send a message via AIM to Marshac Send a message via Yahoo to Marshac
Re: Affordable & unaffordable real estate markets

Quote:
...
At least they have been easing up those restrictions in Snohomish County. I don't know how the process works for King, but at least in Snohonish County, the county planners often have public planning and comment sessions. Currently they are looking at expanding the urban growth boundary, so we went to one of the planning sessions to make sure that the expansion covered our property. As a result of a lot of people doing exactly what we had done, they redrew some of the proposals to include our area. We'll see what they finally do. If you know others who have similar complaints as you, have them write the county council/planners.
__________________
Marshac is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-27-2005, 05:19 PM   #13
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Re: Affordable & unaffordable real estate markets

Quote:
I bought my small acreage ranch in Texas Hill Country about 4 years ago...

Time is running out for anyone who wants to stay ahead of this curve. Buy your special place now ... do not wait much longer!
Ol_Rancher, no telling who is reading this stuff. Mum's the word on the Hill Country. Summers are way too hot anyhow.

REW
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-29-2005, 04:39 AM   #14
Dryer sheet wannabe
 
Join Date: Jan 2005
Posts: 17
Re: Affordable & unaffordable real estate markets

All this talk about the hill country is really making me want to FIRE. The Man keeps me up here in north Texas for now. I agree that the summers and the fire ants do make the hill country undesirable
__________________
The Man&#039;s pawn number 34,672
BilltSuperTester is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 01-29-2005, 05:02 AM   #15
 
Posts: n/a
Re: Affordable & unaffordable real estate markets

I have been all over Texas except for the Corpus/Brownsville area. It really is like a whole other
country. The hill country has its charm. I suppose my favorite area is the piney woods of east Texas. It reminds me of Upper Michigan, i.e. lots of woods and water. I spent a lot of time looking for property in that area, but ended up north of Dallas mainly as I had already lived there and knew my way around. I think
if that had not been the case, and we were still set on Texas, we would probably settled in around Toledo Bend
somewhere. Where we ended up is a bit more
"upscale" being so close to the Metroplex, but looking
ahead I figured that would make our property easier to sell in the event we wanted to make a move later on. Of course, our "later on" is much reduced now
and so it may be my heirs who reap the benefits. Anyway, whoever said "location location location"
knew what they were talking about. Both our homes
are in fast growing areas and on the lower end of the
price scale. Selling either should never be much of a problem if it comes to that.

JG
__________________
  Reply With Quote
Re: Affordable & unaffordable real estate marketsT
Old 02-01-2005, 08:12 AM   #16
 
Posts: n/a
Re: Affordable & unaffordable real estate marketsT

California can actually be a friendlier place to retire "if" you own your home there. The reason is that Prop13 limits property taxes.

We have a place (for aging parents) in NJ and a place in CA (for ourselves). It's amazing that property taxes are higher in NJ for a place that is valued at less than 1/3 of what our CA place is.

What's even more amazing is that we have a retired school teacher and a retired beautician on either side of us in CA. They probably pay less than $2K annually in property taxes for houses worth over $1M.



__________________
  Reply With Quote
Re: Affordable & unaffordable real estate marketsT
Old 02-13-2005, 06:52 AM   #17
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: Affordable & unaffordable real estate marketsT

Quote:
California can actually be a friendlier place to retire "if" you own your home there. The reason is that Prop13 limits property taxes.
That's one of the reasons that the state is in debt. Arnold is trying to raise on other things, i.e., college tuition.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 02-13-2005, 07:41 AM   #18
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 325
Re: Affordable & unaffordable real estate markets

Re: *Prop 13:

I have lived in California and now live in Arizona. *The point about the advantage of having your property taxes capped under prop 13 should not be ingnored. *The politicians can't work the numbers (it seems they are in concert with the realtors) *to appraise your house as high as they can for ad valorem taxes in California. *This helps prevent the "Tax and Spend" cycle they would other wise engage in to buy votes and remain in power from eventually evicting us ER's from our homes. *If you control taxes you control the tyranny of political graft for votes, usually taking from the haves to buy the votes of the have nots. *Here in Phoenix the assesor is very aggressive and uses the realtors data and the MLS to justify the constant increase in taxes on home ownership attributable to a paper increase in home resale values. *I am not selling my home, bought it years ago for cash, so why should I pay a form of ongoing capital gains tax for money I have not realized? *I like flat taxes. *I will pay my share for services. *But I want a way to keep these political empire builders under control. *I do not want to be taxed out of my own home.

One idea, though there must be others that would work. *Make a tax on a square foot basis across an entire district, and put any ad valorem tax increases for the entire district up to vote as a form of fiscal control, just like a bond referendum. What occurs in most places is a home owner - property tax payer's death by a thousand cuts, each year a few percentage points higher and higher, until you have a tax bill that is more onerous than your fomer mortgage, and you are taxed out of your home. *Just present the county budget to the tax payers, and the ad valorem means to finance it, and do it on a district based, rather than property by property based method.

There is plenty I did not like about California's politics, but Prop. 13 is one idea that I believe should be used nationwide, perhaps with some modifications. *

I resent the ad valorem tax rates. They are a threat to anyone over time if unchecked. *The increase in house prices will require a forced sale on many retired folks property without real compensation to remedy this tax abuse. *All of us have limits on our budget. *The county should be limited by direct vote as to *their annual taxing authority and the methods they use to obtain taxes. Recall that history is full of peasant revolts to unjust property taxation by the ruling class. *Prop 13 *was the equivalent of the Magna carta in this battle. *We need more, not less of this type of legislation for fair tax allocation. (I have to leave now, as the County Assesors Secret Police might trace this message to my address.) *8)
__________________
&quot;TEMPUS FUGIT&quot;
LEX is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 02-13-2005, 09:34 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Affordable & unaffordable real estate markets

Revoking prop 13 is a red herring anyway. The average homeowner moves approximately every 7 years anyway, causing a tax revision on each home bought and sold. The number of people who live in a home for a very long time without making a change that could trigger a reassessment (adding on, building a garage, putting in a pool, etc) are small and probably principally elderly retirees or soon-to-be retirees.

All a revokation would do is accellerate some tax revenues into the current tax year, followed by roughly the same annual incremental revenues. Not a panacea by any means.

And it'd be really great for anyone living near the coast who has been in their home for more than 20 years. I'd bet a huge percentage would have to sell. There are a boatload of homes that were bought for <100k that are worth 6-10x that now.

I wish there was an economically reasonable way to hang onto my wifes old house...she owned it for 14 years. Property taxes on a 1400sq foot house on 1/3 acre is ~$420 a year. Pretty sweet.

Its nice knowing that my property taxes wont double and triple to support ridiculous spending programs that dont work half the time.

As far as affordable vs unaffordable, I've been making some good hay selling appreciated properties in the midst of growth explosions and then buying again just on the edge of the urban sprawl. I dont really have any way to do that again at this point as all real estate within an hour radius of where I live now is hideously overpriced.

As Jarhead will attest, I live in the middle of the "least affordable" area by this study's measure of income vs home prices. A lot of folks around here are living near the poverty line among homes that have quadrupled in value in the last 6 years. Its only a matter of time before landlords make the same decision I just made on my wifes old house...rent it for $1000-1200 a month with headaches or sell it for $240-250k. We should experience a wholesale change in demographics around here over the next 3 years. I just dont know where all the poor people are going to move to unless its wayyy out of the area or out of state.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Affordable & unaffordable real estate markets
Old 02-13-2005, 10:03 AM   #20
 
Posts: n/a
Re: Affordable & unaffordable real estate markets

Quote:
There is plenty I did not like about California's politics, but Prop. 13 is one idea that I believe should be used nationwide, perhaps with some modifications.
Capping property tax increases seems like a good idea but prop-13 is grossly unfair and runs counter to free market principles. Say I move to CA with my wife and a kid. Why should I pay 2,3, or 5x what the neighbors are paying in property tax? That neighbor might even have 4 or 5 kids and are therefore using more resources. Seems to me that the people of CA are saying we want lots of government services, but let's make the newcomers pay for them. Was the business lobby opposed? Maybe it didn't have a big affect when the economy was booming, but the cost of housing (and taxes) are certainly a deterrent now.

It seems to be that there are other ways to solve the problem that aren't unfair. For example, Lex's sqft idea, or the option to defer a portion of payments until the house is sold.
__________________
  Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Real estate as an investment wzd FIRE and Money 46 09-30-2008 12:04 PM
Long-term returns from real estate wabmester FIRE and Money 56 11-20-2006 02:38 PM
The advantages of owning real estate... cube_rat FIRE and Money 13 09-06-2006 06:34 PM
Real Estate Bubble in D.C. - CBS News tonite.... Cut-Throat FIRE and Money 23 05-19-2005 02:44 PM
New with Real Estate question trumpeting_angel Hi, I am... 25 08-10-2004 06:51 AM

 

 
All times are GMT -6. The time now is 12:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.