RealtyHop Housing Affordability Index: August 2022

[homebucket]

The 5 Least Affordable Housing Markets

1. Miami, FL
Miami continues to be the least affordable U.S. city this August, with a median home price of $610,000, 1.67% higher than the previous month. Based on the projected median household income of $44,581 and a 5.5% interest rate on a 30-year fixed rate mortgage, an average Miami family would have to set aside 87.39% of their annual income to afford a home.

2. Los Angeles, CA
Los Angeles remains the second least affordable city in the nation this month. The median list price rose slightly to $975,000 from $969,000. With a 5.5% mortgage interest rate, an average L.A. family will need to spend 85.34% of their annual income on homeownership costs.

3. New York, NY
New York City stays as third least affordable U.S. this July. The median asking price dropped to $925,000 in the past month. This is the second month where median home prices decreased month-over-month in New York City. With a projected median income of $68,129, families in New York should expect to allocate 82.47% of their annual income toward mortgage repayments and real estate taxes.

4. Newark, NJ
Newark remains the fourth least affordable housing market in the nation. The median list price for residential homes is currently $385,000. A local Newark family making a projected median income of $38,854 would have to set aside 77.52% of their annual income for mortgage payments and taxes. The homeownership burden is 1.34% higher than in July.

5. Hialeah, FL
Hialeah rounded out the top 5 least affordable housing markets this month. The median home price rose to $465,000 this August, up 3.56% from July. With a projected median household income of $40,036 and an interest rate of 5.5% on a 30-year fixed-rate mortgage, a local Hialeah family will need to spend 72.55% of their annual income on homeownership costs.

https://www.realtyhop.com/blog/housi...x-august-2022/

Thought this was an interesting perspective, since recently we were talking about the Bay Area and its astronomical housing prices, but taking into account the astronomical income, it's not as insane as one might think.

Here's how SF and some other Bay Area cities fared. Just for fun, I thought I'd add Chicago since it's commonly viewed here as the standard for housing affordability.

7. San Francisco, CA
Household income - $126,117
Home price - $1,338,000
Share of income - 66.56%

11. Oakland, CA
Household income - $82,649
Home price - $798,000
Share of income - 60.85%

15. San Jose, CA
Household income - $122,914
Home price - $1,100,000
Share of income - 55.76%

16. Fremont, CA
Household income - $149,563
Home price - $1,338,000
Share of income - 55.14%

47. Chicago, IL
Household income - $64,367
Home price - $359,900
Share of income - 38.36%

[homebucket]

And the other end of the spectrum:

The 5 Most Affordable Housing Markets

1. Fort Wayne, IN
Fort Wayne continues to rank as the most affordable U.S. housing market. The median home value rose slightly to $160,000 from $155,000 this month. With a 5.5% 30-year fixed-rate mortgage, an average Fort Wayne family can expect to spend 17.74% of their annual income toward homeownership.

2. Wichita, KS
Wichita remains the second most affordable U.S. city. The median real estate value currently sits at $159,000. After factoring in the local real estate taxes and a 5.5% 30-year fixed-rate mortgage, a typical household in Wichita can expect to spend $894.82 per month on homeownership costs. This translates to 17.94% of their annual income.

3. Detroit, MI
Detroit is the third most affordable U.S. housing market. The median asking price remains stable at $89,999 this month. For average Detroit families looking to finance their home purchase, they should allocate 19.03% of their annual income on mortgage payments and property taxes. The homeownership burden remains unchanged from the previous month.

4. Lubbock, TX
Lubbock improved one spot in our affordability rankings and became the fourth most affordable market, replacing Cleveland. The city’s real estate values remain relatively stable, with a median list price of $170,000. A Lubbock family looking to buy soon should expect to contribute 21.37% of their annual income toward homeownership.

5. Cleveland, OH
Cleveland dropped one spot as the fifth most affordable U.S. city. Median home value rose from $110,000 to $112,500 this August. Given a 5.5% mortgage interest rate, families in Cleveland should be prepared to spend 22.46% of their annual income on homeownership costs. The homeownership burden is 2.27% higher than in July.

[Steely Dan]

Originally Posted by homebucket

Just for fun, I thought I'd add Chicago since it's commonly viewed here as the standard for housing affordability.

of the 100 cities looked at for this study, chicago is the only one in the midwest that broke into the top 50, and even then only barely so at #47.

philly is the other oft-cited "cheapest urban buy", and it came in a little below chicago at #57.

[iheartthed]

I get the sense that they were using city median price vs metro area income. That's what it appears they did for Detroit at least.

Nevermind.

[Steely Dan]

Originally Posted by iheartthed

I get the sense that they were using city median price vs metro area income. That's what it appears they did for Detroit at least.

for the detroit entry, they have household income listed at $34,932.

there's no way that the detroit metro area median household income could be that low, right?

that's gotta be a city-proper only figure.

[iheartthed]

Originally Posted by Steely Dan

for the detroit entry, they have household income listed at $34,932.

there's no way that the detroit metro area median household income could be that low, right?

that's gotta be a city-proper only figure.

Yeah, that's the city. I take back what I said.

[dave8721]

Originally Posted by iheartthed

I get the sense that they were using city median price vs metro area income. That's what it appears they did for Detroit at least.

With Miami, that's the City. Not the metro because you can see neighboring Hialeah right there in the top 5 with a different value also. Also NYC and Newark are in the top 5 also.

Obviously with stats like this, they don't really mean anything because someone making the median family income generally doesn't own their home in places like NY or Miami, they rent. Rent in the city or move to the burbs to buy a home.

[Steely Dan]

Originally Posted by dave8721

Obviously with stats like this, they don't really mean anything because someone making the median family income generally doesn't own their home in places like NY or Miami, they rent. Rent in the city or move to the burbs to buy a home.

renting is obviously a fine option for many people.

and even better for those renting in cities with some form of rent control.

that said, if one is hell-bent on owning their own home, there are some cities that have lower barriers to enter the real estate market than others, so it's not always just a straight-line case of "you either have to rent in the city or buy out in the burbs".

in chicago's case, the ZHVI for the city proper is $321,131, while the ZHVI for the entire metro area is $313,828, so not an earth-shattering difference overall.

[JohnIngersoll]

Thanks for sharing your experience with us.

[pdxtex]

Stay out of Witchita! That's my bug out spot after I get priced out of Portland. High plains drifting! Nah I don't care. Its starting to pick up a Austin/OKC kind of vibe I hear. Looks like a cool local art scene too.

[dktshb]

I cannot believe Reno is #19 as least affordable in the nation and that the average price of a home at $570K is almost $100K more than Sacramento. It must be Bay Area people flocking there.

[Wigs]

Originally Posted by pdxtex

Stay out of Witchita! That's my bug out spot after I get priced out of Portland. High plains drifting! Nah I don't care. Its starting to pick up a Austin/OKC kind of vibe I hear. Looks like a cool local art scene too.

The Portland of the Plains

[ocman]

Originally Posted by homebucket

Thought this was an interesting perspective, since recently we were talking about the Bay Area and its astronomical housing prices, but taking into account the astronomical income, it's not as insane as one might think.

Here's how SF and some other Bay Area cities fared. Just for fun, I thought I'd add Chicago since it's commonly viewed here as the standard for housing affordability.

7. San Francisco, CA
Household income - $126,117
Home price - $1,338,000
Share of income - 66.56%

11. Oakland, CA
Household income - $82,649
Home price - $798,000
Share of income - 60.85%

15. San Jose, CA
Household income - $122,914
Home price - $1,100,000
Share of income - 55.76%

16. Fremont, CA
Household income - $149,563
Home price - $1,338,000
Share of income - 55.14%

47. Chicago, IL
Household income - $64,367
Home price - $359,900
Share of income - 38.36%

I can’t believe how cheap Chicago is. A California homeowner could buy 3 houses without breaking a sweat over how to pay for it.

[Nomad9]

Originally Posted by pdxtex

Stay out of Witchita! That's my bug out spot after I get priced out of Portland. High plains drifting! Nah I don't care. Its starting to pick up a Austin/OKC kind of vibe I hear. Looks like a cool local art scene too.

Those I-35/I-29 corridor plains cities aren’t very exciting if you’re below ~30, but if you have a young family or up, they’re pretty underrated for what you get IMO. They often have a good mix of solid economies, low COL, solid cultural amenities (because they often serve as the cultural capitol for a huge geographic area), decent park systems, and decent public education.

Not all of them have all of that, plus the weather can suck. And I’m biased because I live in one of them. But still. Aren’t many places these days where I can buy a 3-4 bed, pre-war, nice house in a leafy neighborhood where I can bike a greenway to work and send my kids to decent schools for ~ mid 300s.

[AviationGuy]

Originally Posted by pdxtex

Stay out of Witchita! That's my bug out spot after I get priced out of Portland. High plains drifting! Nah I don't care. Its starting to pick up a Austin/OKC kind of vibe I hear. Looks like a cool local art scene too.

I've thought about Wichita as well. Not too big, not too small, with an increasingly good vibe. The 2020 election map tells the story, too.

Wichita can get awfully cold in the winter, but way more moderate overall than a lot of the Midwest since it's in southern Kansas.

[JManc]

Originally Posted by ocman

I can’t believe how cheap Chicago is. A California homeowner could buy 3 houses without breaking a sweat over how to pay for it.

I don't about that. I suspect a LOT of people are sweating paying on their mortgages around here. Lot's older cars in driveways, houses that could use some (or a lot) of TLC and so on. That's a tell-tale sign that homeowners are barely hanging on.

[EastSideHBG]

Originally Posted by Steely Dan

of the 100 cities looked at for this study, chicago is the only one in the midwest that broke into the top 50, and even then only barely so at #47.

philly is the other oft-cited "cheapest urban buy", and it came in a little below chicago at #57.

Philly can look cheap on paper because we still have many dismal neighborhoods that drive the averages way down but if you want a more stable place to live, it's not cheap anymore. Also, our household income is still very low in comparison to many others and that shows how much poverty is still around.

I assume with Chicago's size and similar issues as Philly that this could be the case here also (well maybe minus the household income portion, as that is higher than Philly)?

[galleyfox]

Originally Posted by EastSideHBG

Philly can look cheap on paper because we still have many dismal neighborhoods that drive the averages way down but if you want a more stable place to live, it's not cheap anymore. Also, our household income is still very low in comparison to many others and that shows how much poverty is still around.

I assume with Chicago's size and similar issues as Philly that this could be the case here also (well maybe minus the household income portion, as that is higher than Philly)?

No, I don’t believe that’s the case for Chicago.

It’s affordable on paper, and affordable in reality, except for a few notable high end areas.

Chicago’s affordability is due to a huge ring of stable middle-class bungalow belt neighborhoods. Also, multifamily units are affordable everywhere, even most of the North side.

Here’s a rough approximation of units by neighborhood tiers.

Basically, the North side cancels out most of the poorer South and West side. Then, the Northwest and Southwest neighborhoods which are huge in their own right, solidify the city’s real estate in the middle-class price range.

Expensive
North: 350K Units

Middle class, Working class
Northwest: 300K Units
Southwest: 200K Units

Poor, Lower Middle
West: 150K Units
South: 250K Units


Nobody on their right mind would tell you to avoid Jefferson Park, for example.

Jefferson Park
https://www.zillow.com/jefferson-park-chicago-il/sold/

Clearing
https://www.zillow.com/homes/Clearing,-Chicago,-IL_rb/

[pdxtex]

Originally Posted by Nomad9

Those I-35/I-29 corridor plains cities aren’t very exciting if you’re below ~30, but if you have a young family or up, they’re pretty underrated for what you get IMO. They often have a good mix of solid economies, low COL, solid cultural amenities (because they often serve as the cultural capitol for a huge geographic area), decent park systems, and decent public education.

Not all of them have all of that, plus the weather can suck. And I’m biased because I live in one of them. But still. Aren’t many places these days where I can buy a 3-4 bed, pre-war, nice house in a leafy neighborhood where I can bike a greenway to work and send my kids to decent schools for ~ mid 300s.

Leafy and bikey without mounds of snow, 300k ppl and a solvent political climate are my basic requirements. Witchita looks cool. Its like the wild west of the midwest so its got a little adventure if you know where to look for it. I have a few ideas but most of them are in metros around a million ppl or less. But more than anything its imperative i get the eff you see kay out of Portland, Oregon. My time on the frontier has come to a close.

[MolsonExport]

Originally Posted by pdxtex

Stay out of Witchita! That's my bug out spot after I get priced out of Portland. High plains drifting! Nah I don't care. Its starting to pick up a Austin/OKC kind of vibe I hear. Looks like a cool local art scene too.