Houses Looking Cheap Everywhere Else
Don’ get too excited: New York’s always been less affordable than the rest of the country and has lagged in its correction. But in many parts of the United States, home values are starting to look attractive on at least one historical measure—in relation to per capita income. You have a big debt overhang problem,…
Don’ get too excited: New York’s always been less affordable than the rest of the country and has lagged in its correction. But in many parts of the United States, home values are starting to look attractive on at least one historical measure—in relation to per capita income. You have a big debt overhang problem, but you don’t have a house price problem anymore, said Robert J. Barbera, the chief economist of ITG, an advisory firm. Of course, that still doesn’t mean anything for guy who makes $200,000 and wants to buy a house on Remsen Street.
Housing Market’s Upside: Affordability [NY Times]
“BHO, I think you’ve got it backwards.”
You thought correct. I made a complete ass of myself.
So, instead, I will say this. It was banruptcies and foreclosures that achieved this “cheap” appearance of home prices outside NYC. When you’ve just lost your home and restructured your credit card debt, your disposabe income spikes if you’re lucky enough to still be working. But you can no longer finance a home. So, yes, homes APPEAR cheaper but they’re actually expensive because you’d have to pay all cash. And they’re not too cheap to the much smaller pool of qualified buyers because these buyers have too much inventory to choose from (higher supply, lower qualified demand), all asking the same price (per type of property). Cheap is when a stand-out seller is ahead of the curve and realistically drops his/her price by a staggering amount.
I always have to disagree, huh? I couldn’t just accept a reasonable assertion (houses appear cheaper because they are) and shut up could I?
***Bid half off peak comps***
Does anyone know how they calculate “disposable income”? It seems that it is a pretty amorphous concept to begin with, but I can’t even imagine how they caclculate it in real time. And using this stat with real time home prices (or close to) and historical disposable income wouldn’t really be an accurate reflection of affordability. That’s not even to mention the raise in average downpayment requirements.
The total cost of ownership has been at historic lows since about 2001, thanks largely to low interest rates.
BHO…even when it stares you in the face you can’t seem to admit it!!!!!!
“There’s only one way to interpret this graph: Disposable income is falling faster than home prices.”
BHO, I think you’ve got it backwards. The graph seems to be saying the opposite, and seems to be in agreement with the usual point you make here. If that graph represented Brooklyn brownstones, you would be well on your way to your dream.
Complete nonsense.
There’s only one way to interpret this graph: Disposable income is falling faster than home prices.
This makes home prices look more expensive. When you’re unemployed and broke or employed but paid less, there’s no such thing as a cheap house.
***Bid half off peak comps***
That poor guy…