Agents Heaven - Real Estate Blog

Does Your City Make Forbes’ “Most Affordable Real Estate Markets” List?

It’s no secret that home prices have seen an out of control surge in places like the northeast and west coast of the United States, making homes virtually unfordable to anyone except the super rich in some cities. But that’s not the case everywhere…

From Forbes.com comes the list of the most affordable real estate markets in the country:

Homeowners in Indianapolis know what that’s like. Its residents don’t have to scrimp and save to afford a home at the median price. There, the bulk of the housing stock is well within reach of the average household. Savings depleted? According to our calculations, it would take just two years of gross salary to become a homeowner there.

Cleveland and Detroit are also reasonably priced. But affordability isn’t limited to the Midwest. Pittsburgh, Atlanta and Greensboro, N.C., made our list as well.

Forbes addresses the critics who scream “rust belt” anytime they’re presented with the fact on the affordability of home ownership in of these many cities. While acknowledging that some cities like Detroit and Cleveland aren’t the healthiest markets, this isn’t always the case:

Other areas on our list, however, such as Dallas and Atlanta, are experiencing growth, yet remain affordable.

Price-to-income affordability in Dallas was seventh best overall, and just under 70% of homes sold in Atlanta in the first quarter of this year were available to the median income-earning household. Prices can remain affordable in fast-growing cities when there are high rates of new-home construction and relaxed growth restrictions.

Additionally, as someone who lives in the northeast, and who grew up with the unaffordability of Boston real estate being common knowledge, I found their comparison to Raleigh, North Carolina’s real estate market extremely interesting:

High demand doesn’t necessarily impede affordability either.

Examine the difference between Boston and Raleigh, N.C.; since 2000, Boston has experienced steady emigration, while Raleigh has welcomed new residents.

But during that time, Boston home prices increased by 16.7%, and median income-earning households can afford about half of what they could seven years ago. In Raleigh, home prices have grown by 37%, but the share of median income earners who can afford homes has only dropped by 3%, all while the city underwent a population boom.

What gives? A high increase in new-home construction and growth policies not overburdened by regulation acted as price reliefs in Raleigh. Boston doesn’t have such policies and hasn’t seen a great deal of new-home construction.

Both Raleigh and Charlotte, N.C., just missed making the list, landing at Nos. 12 and 13, respectively.

Read the rest to find out if you’re in one of these buyer’s markets.

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Does a Foreclosure-palooza in Some Cities & States Mean a Deal For You?

Just last week CNNmoney.com posted an article listing the top ten cities in the United States facing sharp increases in home foreclosures. This comes only weeks after they published an article focusing on the most “ruthless foreclosure states“, which focuses on the amount of time one can lose there home in various states across the country. You don’t have to look far to find countless articles on this hot news item.

What does this all mean for you? At this point, it’s anyone’s guess. We heard for years, experts tell us that there was a “housing bubble” that was set to “pop”, but it never did did it? The housing market has in fact had a very manageable slowdown, with the primary bumps in the road being folks foreclosing on properties they bought, but couldn’t actually afford, often with adjustable rate mortgages.

These aren’t bad people, and we should certainly all have sympathy for them, but the lesson we learn is a simple one we should have already known - buy within your means… And DON’T get an adjustable rate mortgage!

Now, the question is… does the surge in foreclosure activity provide you with a buying opportunity? Certainly it doesn’t take a genius to recognize that with home sales slowing down, and more homes coming on the market, it has gone from being one of the best sellers markets a year ago, to a buyers market with a lot of further potential today.

Obviously there’s never a guarantee when home prices will go back up, and how quickly, and in what regions, so do your research. If you’ve been on the fence about getting in to the real estate market, this is a great time to look in to it more seriously. But don’t go wild with the buying opportunity unless you’ve got good reason to believe it will provide you with a big pay off in your region. You’d hate to get stuck with properties that have barely increased in value and require a lot of work to sell 5 or 10 years down the road.

Tags: real estate market, foreclosing, foreclosed, home foreclosure, buyers market, real estate, home foreclosing, cheap real estate, cnnmoney, foreclosed home, foreclosure, housing bubble