Depressing housing trivia for the day
I read this in our local freebie paper today:
"Thirty years ago, a family earning 70 percent of the state's median income could afford to buy a house at the median price. Today, a family must earn $110,000 per year, or 175 percent more than the median income, to afford a house that is priced at the statewide median, which is $469,000."
Ah, lovely. And then to think that the median price is higher in the Bay Area (granted, our median income is too, but not enough to make up the difference)... yup, hopeless!
And in completely unrelated news (ha!)... that housing measure I mentioned in my last post went down in flames, only garnering 28% of the vote. Let's see - 3.2 million spent to win about 6,000 votes - that works out to about $533 per vote. I really wonder what the developer's next step will be.
I know there is some connection between the first and second part of this post, but given what the developer was planning on building (50% above median price, 25% median price (i.e. approx 650K around here), 10% senior housing, 5% very affordable (earning less than 80% median income for this city per year for a family of 4), 10% affordable (earning less than 100% median income)) I'm not sure how much that would help make housing more accessible overall. It seems hard to believe that there is really a shortage of above median price housing and that by building more it would somehow address housing accessibility. The only thing I can think of is some sort of bizarre housing pyramid scheme where people who can afford more house can move up because more expensive houses are available, thus freeing each tier of housing for people who can't afford as much... sounds rather teneous and suspicious to me. And besides, most of the people who are buying the above median houses are banking on the equity provided by their existing home, which is in turn financed by the person who buys their home... and on and on until you get to the first-time buyer who gets to shoulder a pretty amazing financial burden in most cases. One thing I would really like to know is just how much does it cost the builder to build a basic suburban tract home? And how much housing stock would have to be developed to catch up with all the demand that seems to exist? And at what point is the bottom of the housing ladder going to be tapped out - i.e. when do even entry level houses and condos become so out of reach that the first time buyers can't even get started, thus stalling out the whole cycle of equity building and moving up?
Another thing that comes to mind is a conversation I overheard at the park in Walnut Creek today - two women in their 70's were discussing the area and what it was like when they were growing up here and then first settling down to start families just after WWII. They both were reminiscing about how expensive they thought homes were then and how hard it was to make it work at first... so perhaps the more things change, the more they stay the same. (although I would argue that the mid to late-40's where a rather difficult time in the housing arena because of the pint up demand, returning GI's, greater availability of financing, etc, etc, all which served to create a huge amount of demand that wouldn't be seen again for quite some time)
Someday I will no longer be quite so obsessed with this I'm sure... someday when I can be snug (smug? *grin*) in my own home and it won't be at the forefront of my mind. In the meantime, well, I apologize for boring to tears any of you who have made it this far.
"Thirty years ago, a family earning 70 percent of the state's median income could afford to buy a house at the median price. Today, a family must earn $110,000 per year, or 175 percent more than the median income, to afford a house that is priced at the statewide median, which is $469,000."
Ah, lovely. And then to think that the median price is higher in the Bay Area (granted, our median income is too, but not enough to make up the difference)... yup, hopeless!
And in completely unrelated news (ha!)... that housing measure I mentioned in my last post went down in flames, only garnering 28% of the vote. Let's see - 3.2 million spent to win about 6,000 votes - that works out to about $533 per vote. I really wonder what the developer's next step will be.
I know there is some connection between the first and second part of this post, but given what the developer was planning on building (50% above median price, 25% median price (i.e. approx 650K around here), 10% senior housing, 5% very affordable (earning less than 80% median income for this city per year for a family of 4), 10% affordable (earning less than 100% median income)) I'm not sure how much that would help make housing more accessible overall. It seems hard to believe that there is really a shortage of above median price housing and that by building more it would somehow address housing accessibility. The only thing I can think of is some sort of bizarre housing pyramid scheme where people who can afford more house can move up because more expensive houses are available, thus freeing each tier of housing for people who can't afford as much... sounds rather teneous and suspicious to me. And besides, most of the people who are buying the above median houses are banking on the equity provided by their existing home, which is in turn financed by the person who buys their home... and on and on until you get to the first-time buyer who gets to shoulder a pretty amazing financial burden in most cases. One thing I would really like to know is just how much does it cost the builder to build a basic suburban tract home? And how much housing stock would have to be developed to catch up with all the demand that seems to exist? And at what point is the bottom of the housing ladder going to be tapped out - i.e. when do even entry level houses and condos become so out of reach that the first time buyers can't even get started, thus stalling out the whole cycle of equity building and moving up?
Another thing that comes to mind is a conversation I overheard at the park in Walnut Creek today - two women in their 70's were discussing the area and what it was like when they were growing up here and then first settling down to start families just after WWII. They both were reminiscing about how expensive they thought homes were then and how hard it was to make it work at first... so perhaps the more things change, the more they stay the same. (although I would argue that the mid to late-40's where a rather difficult time in the housing arena because of the pint up demand, returning GI's, greater availability of financing, etc, etc, all which served to create a huge amount of demand that wouldn't be seen again for quite some time)
Someday I will no longer be quite so obsessed with this I'm sure... someday when I can be snug (smug? *grin*) in my own home and it won't be at the forefront of my mind. In the meantime, well, I apologize for boring to tears any of you who have made it this far.
posted by Amber at
7:26 PM
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