The housing affordability gap is widening
According to the May Trulia Price Monitor and Trulia Rent Monitor, asking prices for homes rose 1.1 percent compared to the previous month, and while it is a substantial improvement for one month, it is a slower pace of improvement than the previous three months. Home prices have risen 9.5 percent compared to May 2012, Trulia reports.
Of particular note, the report indicates that the housing price recovery has actually put the least affordable housing markets even farther out of reach, as prices rose over 20 percent annually in Orange County, Oakland, and San Jose, the three least affordable markets. Overall, in the 10 least affordable markets, prices rose 16.3 percent, substantially more than the national average of 9.5 percent during the same period.
The affordability gap is not just widening for home buyers, but for rentals, as in two of the least affordable rental markets – Miami and Boston – rents rose more than 5 percent annually while national rents only rose 2.3 percent.
People might think about relocating
Trulia says this affordability gap will make more people think about relocating from expensive to cheaper markets – and may create headaches for national housing policy.
“Home prices are rising fastest in the local markets that were least affordable to begin with,” said Dr. Jed Kolko, Trulia’s Chief Economist. “As the gap between the most and least affordable markets widens, more people in expensive markets like California will look to relocate to cheaper markets like Texas when the time comes to buy.”
“If you own in pricey markets like Honolulu or San Francisco, or rent in expensive places like New York or Miami, you could be spending more than half your earnings on housing,” Dr. Kolko added. “Even spending one-third of your pre-tax earnings on housing can stretch the family budget. But to own in more affordable markets like Detroit, Houston, or Atlanta, you’ll spend much less than one-third of your earnings on housing – leaving a lot more money left over to spend on other things or build up savings.”
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Opinion Editorials3 days ago
Questions you wished recruiters would answer
Business Entrepreneur2 weeks ago
3 things to consider before you pivot your business model
Business Entrepreneur2 days ago
Zen, please: Demand for mental health services surges during pandemic
Opinion Editorials3 days ago
6 skills humans have that AI doesn’t… yet
Business Entrepreneur2 days ago
This startup makes managing remote internships easier for all
Tech News2 weeks ago
Facebook is cracking down on Groups, here’s what you should know
Business Marketing2 weeks ago
Marketing amidst uncertainty: 3 considerations
Business News2 weeks ago
This web platform for cannabis is blowing up online distribution