Home affordability moved higher last quarter, boosted by the lowest mortgage rates in history, a rise in median income, and slow-to-recover home prices throughout Virginia and the country.
According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011′s fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.
Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.
Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation’s heartland.
The Top 5 most affordable U.S. cities in Q4 2011 were:
- Kokomo, IN (99.2% home affordability)
- Fairbanks, AK (97.5% home affordability)
- Cumberland, WV (96.9% home affordability)
- Lima, OH (96.0% home affordability)
- Rockford, IL (95.5% home affordability)
These are each considered “small markets”. The most affordable “major market” was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area’s local median income.
Not surprisingly, America’s “least affordable cities” were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.
San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took “Least Affordable Market” honors.
Just 29 percent of homes in and around New York City were affordable to households earning the area’s median income last quarter. It’s a large jump from the quarter prior during which 23 percent of homes were affordable.
The rankings for all 225 metro areas are available for download on the NAHB website.
According to the Census Bureau, more than 3.2 million U.S. workers spend over 3 hours commuting to and from work each day.
Commutes exceeding 90 minutes in each direction are known as “extreme commutes” in Census Bureau parlance. As compared to typical commute times nationwide, they’re aptly named.
The national, average commute time is just 25.1 minutes.
For home buyers in Fort Lee or in any U.S. city, make sure to make commute times a consideration before placing an offer on a property. The length of your daily commute will make an impact on your life.
Studies shows that shorter commutes are linked to higher levels of life satisfaction. Long commutes are linked to low levels of life satisfaction.
As ranked by the Census Bureau, here are the 10 cities with the longest average commute times, where commuting is defined as the total time to arrive at work, inclusive of all modes of transportation (i.e. automobile, train, subway, foot, or other) :
- New York / North New Jersey / Long Island : 34.6 minutes
- Washington, DC / Arlington / Alexandria : 33.4 minutes
Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutesBremerton / Silverdale, WA : 30.8 minutesChicago / Naperville / Joliet, IL : 30.7 minutesWinchester, VA : 30.3 minutesAtlanta / Sandy Springs / Marietta, GA 30.1 minutesRiverside / San Bernardino / Ontario, CA : 30.0 minutesStockton, CA : 29.8 minutesBaltimore / Towson, MD : 29.7 minutes
Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutes
- Bremerton / Silverdale, WA : 30.8 minutes
- Chicago / Naperville / Joliet, IL : 30.7 minutes
- Winchester, VA : 30.3 minutes
- Atlanta / Sandy Springs / Marietta, GA 30.1 minutes
- Riverside / San Bernardino / Ontario, CA : 30.0 minutes
- Stockton, CA : 29.8 minutes
- Baltimore / Towson, MD : 29.7 minutes
By contrast, the shortest commute belongs to residents of Great Falls, Montana. The average commute for the city’s 58,000 residents is 14.2 minutes.
A long commute to work should not deter you from moving to a particular home or neighborhood, but your time-en-route should be a consideration. Before making an offer on a home in Rivers Bend , therefore, practice the rush hour commute from your potential new neighborhood in the morning, and back to it again that evening.
Then, imagine making the commute every day.
Looking for safe cities in which to live? A recent study may help you.
Titled “America’s Safest Cities“, Forbes Magazine compiled data from more than 70 cities with populations of 250,000 or more, and ranked them by violent crime rate as reported by the Federal Bureau of Investigation.
A “violent crime” is one that can be categorized as murder, robbery, and assault, among others. Then, for each metropolis, local traffic-fatality rates were added to the area’s violent crime rate, and averaged into the data.
Forbes presents the 10 safest large cities in America as :
- Plano, Texas
- Henderson, Nevada
- Honolulu, Hawaii
- Santa Ana, California
- Lincoln, Nebraska
- San Jose, California
- Mesa. Arizona
- Colorado Springs, Colorado
- Aurora, Colorado
- New York, New York
Forbes is quick to note that “gridlocked” traffic patterns help keep cities safe; which may explain why cities like Honolulu and New York City made the Top 10. When cars are forced to move more slowly, the report states, traffic-related fatalities tend to plummet.
Don’t rush to make a home-buying decision based on Forbes data alone, however. Like everything else in real estate, data is local and city-wide statistics are too broad to be helpful to an everyday buyer in Chester.
For accurate, real-time, local crime data, be sure to ask a real estate profession.
In the housing market, amenities and location have as much to do with a home’s value as the everyday forces of supply-and-demand. Whereas the latter causes home values to rise and fall over time, the former creates a starting point for said values.
Where you live — and the features of your home — determine your home’s price range. Naturally, homes in some areas are consistently higher-valued than homes in others.
Using data compiled by real estate market data firm Altos Research, Forbes Magazine presents America’s 10 most expensive ZIP codes. California and the New York Metro area dominate the list.
- Alpine, NJ (07620) : $4,550,000
- Atherton, CA (94027) : $4,295,000
- Sagaponack, NY (11962) : $3.595,000
- Hillsborough, CA (94010) : $3,499,000
- Beverly Hills, CA (90210) : $3,469,891
- New York, NY (10012) : $3,392,574
- New York, NY (10013) : $3,317,962
- Water Mill, NY (11976) : $3,300,000
- Montecito, CA (93108) : $3,099,348
- Old Westbury, NY (11568) : $3,095,000
In fact, of the top 50 most expensive ZIP codes, only 6 are located outside of California and New York regions. 3 are Colorado resort towns — Snowmass (81654), Aspen (81611) and Telluride (81435) — one is in Maryland, one is in Florida, and the last is in Washington State.
Chicago-suburb Kenilworth (60043) is the top-ranked Midwest ZIP code. It placed 86th overall.
The Forbes list may be interesting but, to home buyers or sellers in Chesterfield , it should not be the final word in home values. Real estate is a local market which means that — even within a given ZIP code — prices can vary based on street and neighborhood.
Look past general data and get specific. Talk to your real estate agent for local market pricing.
I was once told a good decision is only as good as the facts. I open this BLOG post with a question for every homeowner who is thinking about selling their home this upcoming spring…if you were to be honest…do you think property values will be higher this spring? This is a question anyone thinking about selling must ask. Should they sell now or should they wait for the spring? Most years that would be an interesting question. There is a belief that many buyers come out in the spring and, with that increase in demand for housing, prices may appreciate. This year is unlike any year in recent memory. Most experts believe there will be continuing depreciation of home values throughout the next 18 months.As I posted on recent BLOG post, there may be a window of opportunity throughout the rest of 2010 as the banks try to straighten out the paperwork on thousands of foreclosures. Once that paperwork is corrected, the flow of distressed properties coming to the market at discounted prices will begin again.
This was mentioned in the latest Home Price Expectation Survey. Robert Shiller, MacroMarkets co-founder and chief economist said this:
“Over the past month, the average projection for 2010 nationwide home price performance improved slightly among our experts, but for each year thereafter it deteriorated. One plausible explanation for this month’s more negative overall sentiment is recent news concerning foreclosure processing questions and the related possibility of extending the supply pipeline.”
Other experts are also reporting that prices will soften next year
In October’s RPX Monthly Housing Market Report, CEO Michael Feder commented:
“We are at a flex point in housing valuation. With record supply, already paltry demand and systemic threats to a possible correction, we remain terribly concerned about forward home prices.”
The very next day, in a special release, Clear Capital reported a “sudden and dramatic” drop in U.S. home prices:
Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months.
If you plan to sell within the next year, you shouldn’t wait for the spring market. Price the home at a compelling price to make sure it sells in the next sixty days. I would welcome the opportunity to chat with you about your homes market value.
The news is not as bad as it might appear at face value. I knew this would happen because when the numbers come out they are compared with the same month of last year. Last year, August through October, we had an anomaly with the tax incentive program in play. Something which we do not have this year. The numbers for our area (CVRMLS) for September 2010.
Pending Sales & Sales Success
In this market segment, Pending Sales for September are down by 13.72% to 1,038 versus September of last year at 1,203 that went under contract. With 2,808 newly listed homes this month and 1,038 under contract, the sales success index of 36.97% for September decreased 5.70% versus last year’s index of 39.20% in 2009.
According to the September 2010 statistics, this market area has experienced some downward momentum with the decline of average prices at closing. Prices dipped 1.29% to $211,307 versus the previous year September at $214,066. This is a difference in price of $2,758.
New Listings & Months Supply of Inventory
New Listing in this area for the month of September yielded 2,808 available resale dwellings. This was a decline of 8.50% or 261 units in comparison to September 2009. The total housing inventory at the end of September dipped by 0.60% to 13,783 existing homes available for sale. At an average of 1,075 closed sales per month over the last 12 months (October 2009 – September 2010), represented an unsold inventory index of 12.83 MSI for this market segment.
As 2009 was ending, the “experts” were busy making forecasts about the U.S. economy and what to expect in 2010.
With respect to the housing markets, two predictions were made again and again:
It reminds us that economists are much more skilled with analysis of the past versus predictions of the future.
A pile of data can only get you so far.
Think of Chesterfield housing market predictions like watching a local weather forecast. A meteorologist can look at the radar and tell you that rain is coming, but it’s never with 100% certainty. There is always a chance of change.
The housing market is the same way. Just as the U.S. economy is unpredictable, so are housing prices, and so are mortgage rates.
Therefore, when you have a personal finance decision to make, evaluate your options based on the information at hand today rather than an educated guess about the future. The future, after all, is subject to change — despite what the experts forecast.