Yes, the Seattle real estate market is hot. However, my clients who are first-time buyers trying to purchase homes on their own (i.e., without the financial help of a spouse, parents, etc.) are often surpised to see just how little their hard-earned moderate income can buy them. These are people who work as schoolteachers, interpreters for the deaf, physicians’ assistants, and graphic designers. While these clients can easily obtain a home loan, they will have to allot as much as half of their monthly income to meet to their new housing costs. This affordability issue seems to be increasingly problematic as housing prices rise in Seattle.
And, according to a newly-released report (5MB PDF) from Harvard’s Joint Center for Housing Studies, this affordability issue is a growing concern nationwide. From an RIS Media article on the study:
“While the future looks bright for housing investment, there is little cause for optimism that the nation’s housing affordability challenges will diminish; in fact they are growing worse,” says the center’s Executive Director Eric Belsky. Between 2000 and 2003 alone, the numbers of households spending more than half of their income on housing increased by 2.5 million. “Housing affordability is a chronic problem and narrowing the gap between what decent housing costs and what low-wage workers and retirees can afford will remain a major national challenge.”
For those of you not up to reading the full report, ‘The NWReporter‘, a publication of the Northwest Multiple Listing Service, offers a synopsis of the study.
Besides the affordability issue, trends of note in the Harvard study include commuting patterns and the shift in buyer demographics. As the NWReporter notes, “Minority, single-person, single-parent and female-headed households are fueling demand for housing, together with record numbers of immigrants.” Commuting trends saw a three-fold increase in the number of metropolitan areas in the country where more than half of the households live 10 or more miles from the central business district. In other words, lots of people are commuting more than an hour to work. From 1990 to 2000, the number of Seattlites commuting an hour or more to work more than doubled (4.3% to 9.1%).
Technorati Tags: Affordability, General, Housing Studies
Snohomish County is experiencing similar phenomena. Move up buyers, people buying their second or third home, are finding that their dollar doesn’t get them much more square footage. Since we deal with a many buyers in this segment we find increasing difficult to sell homes within our target market.
Projecting and staying current on trends we can hope to determine how and where the market is shifting. But, forecasting/projecting techniques are not perfect and leave room for error since we can’t be 100% sure of what the market is going to do the day after tomorrow or a year from now. I just wanted to share some comments. Take care!!
Cool! Thanks for stopping by and letting us know what’s going on in Snohomish!