To buy a median priced home in Cleveland only takes $22,348 in annual income, but in San Francisco, it takes $125,072 per year to afford the median home. In Seattle, you need $63,145 in income to purchase a home valued at $354,700.
Here is a summary published by HSH Associates based on the third quarter report from the National Association of Realtors. The income estimates assume a 20% down payment has been made and that amount is subtracted from the home price to calculate the payments.
The Salary You Must Earn to Buy a Home in 25 Cities
RE/MAX Advantage Lake Chelan
Al Lorenz, author of the Chelan Real Estate Blog, has joined forces with RE/MAX Advantage Lake Chelan.
That couples Al’s commitment to his client’s best interests and the fantastic exposure that the RE/MAX brand brings to the market.
With the recent conversion of the Lake Chelan Realtors from a local MLS system to becoming members of the Northwest Multiple Listing system, it no longer required an independent agency to be a member of the NWMLS.
RE/MAX’s market leading brand and worldwide exposure will bring additional benefit for my clients and I will bring my technology expertise to the RE/MAX Advantage Lake Chelan.
Stay tuned for some exciting new marketing programs!
Fortune/CNN Money have a posting on 5 housing markets that are potentially entering “bubble” territory. A bubble type of market sees rapidly increasing prices and demand followed by a crash with rapid price declines and and scarce demand.
In America, most are familiar with the dot.com bubble and the housing bubble. The last housing bubble burst in 2007. But, in the last couple of years, housing has suddenly seen rapid price increases and demand.
Here are the markets in the Fortune article:
- Australia: Housing prices in Sydney surged 13% this year to a record of $718,122 for an average home. Australia’s central bank is urging lenders to stop making mortgages so easy to obtain.
- Brazil: In the last 5 years, home prices in Brazil have doubled. In the urban centers of Sao Paulo and Rio de Janeiro, prices are up 188% and 230% respectively since the beginning of the year
- New Zealand: Low borrowing costs have pushed prices in Auckland up 17%. The housing market had a near bubble in the early 2000s, but current lending practices have pushed home prices higher yet again.
- China: Home prices increased in the fastest pace in almost three years in 2013. Prices in Beijing are up 16% and in Shenzhen they are up 20% for the year. China has relatively low residential mortgage debt and the population tends to save as well as put money in real estate.
- United States: Finally, the rapid price recovery in the U.S. has created fear that a new housing bubble is growing after the 2007 crash. Existing single family homes increased 12.5% in the third quarter from 2012 to $207,300. Dallas Fed President Richard Fisher mentioned that he believes the economy is entering a housing bubble in a speech last month.
That news should add balance to the previous articles, coming from government economists and the Realtors at the FHFA, Freddie Mac and the National Association of Realtors.
According to the National Association of Realtors, tight home inventories are continuing to create double digit increases in home prices in many parts of the country.
“Low inventory is holding back sales while at the same time pushing up home prices in most of the country,” says Lawrence Yun, NAR’s chief economist. “More new-home construction is needed to help relieve the inventory pressure and moderate price gains.”
The national median existing-home price was $199,500 in October. That was a 12.8 percent gain over one year earlier. October was also the 11th consecutive month of double-digit year-over-year increases, NAR reports.
The NAR also reports that housing inventories dropped in October, to 2.13 million existing homes for sale. That total is a 5 month supply at the current sales pace.
The median time on the market for all home types was 54 days in October, up from 50 days in September. In October 2012, the median time on the market was 71 days.
Economists at Freddie Mac are predicting a much stronger economic recovery will take root next year to be “led by a resurgent housing sector” according to Freddie Mac’s November U.S. Economic & Housing Market Outlook report.
Freddie’s economists believe housing will remain affordable in most of the country despite rising interest rates and home prices.
Further, the economists expect overall growth to be 2.5% to 3% in 2014, over half a percentage point better than what is expected in 2013. They predict the unemployment rate will fall below 7% by mid-2014 and single-family home sales and home starts will reach their highest levels since 2007.
Of course, who can believe unemployment numbers anyway!
Through October, home sales in Wenatchee are 24% higher by sales volume and 28% higher in sales dollar volume than 2012. That compares favorably to the Lake Chelan area, where sales transaction volume has only risen by 2.3%.
October home sales in Wenatchee were 13% higher than October 2012 compared to Lake Chelan where home sales were 47% higher. Nationally, home sales in October were 6% above their 2012 levels.
Both Wenatchee and Chelan had strong Octobers relative to the national numbers. Rental properties in both Chelan and Wenatchee have low vacancies.
All of those results are certainly an improvement from where the market was 18 months ago.
Down payment requirement for homes are going lower. According to LendingTree, the average down payment for a 30-year fixed rate mortgage fell to 15.73% of the homes value in the third quarter. That id a drop of 2.74% from the second quarter.
Some banks are offering mortgages with down payments as low as 5%, but they do require private mortgage insurance on their loans. TD Bank, Bank of America, and Wells Fargo bank are among the banks offering the lower down payment loans.
Obamacare is not funded solely through health care premiums and the penalty tax. There is a tax to support Obamacare that you may have to pay when you sell your home as well.
One of the additional taxes that support Obamacare is a tax, in addition to capital gains tax, that you might have to pay when you sell your home.
If you are single with an adjusted gross income of $200,000 or file jointly with an income of $250,000 or more, you may be subject to this new tax. When you sell your home, any profits over the first $500,000 for a married couple are already subject to a capital gains tax. To fund Obamacare, those profits will be subject to an additional 3.8% tax.
This can be a large tax. Capital gains, and this tax, are not indexed for inflation. If you have owned your home for many years, it is likely you will show a profit on your sale just due to inflation. That makes this an insidious tax that can penalize people entering or during retirement.
Unfortunately, since it isn’t hitting millions of people at once, it likely won’t generate the type of outrage and press attention that it deserves.
Lenders are currently offering jumbo loans, which are above $417,000 in size, at lower rates than conforming loans by more than one quarter of a percentage point. It is actually unusual for the wealthy to get their loans for a lower rate than a regular home loan.
An unusual combination of market conditions at banks and Federal Housing Finance Agency requirements that are increasing costs and fees on Fannie Mae and Freddie Mac that are driving the relatively low cost jumbo loans.
There is no telling how long this window of opportunity on jumbo loans will be open so it is a good thing that there is a great inventory of luxury Lake Chelan homes available!
One of the benefits of the changeover from a local MLS system for Lake Chelan to the local Realtors becoming members of the NWMLS is better information on the ownership and sale status of properties.
There are more searchable fields in the NWMLS than our old system. One way that shows up is that Bank Owned/REO and Short Sale properties can now be searched for and found by your Lake Chelan realtor. In the past, there was no way to search for those features in the database.
Of course, sellers benefit as well. There are now over 21,000 agents who also see the details on your properties for sale. Additionally, having better search information allows buyers to find the match they are looking for without extraneous homes showing up in their search. They can exclude bank owned or short sale properties from searches too.
Further, waterfront searches can now be sorted by high bank, low bank, lake, etc. Marketing properties at Lake Chelan just became more sophisticated. Of course, we have been using these tools to market Lake Chelan homes for years!