Middle Class? Don’t expect to own a house.
Our family lives in one of the hotter real estate markets in the United States. My wife and I are constantly amazed at what homes now cost in our area, and their prices continue to rise. A family now needs to make over $100K in New Jersey to afford a home, where the median home price is up over $400K, and the median household income in the state is around $80K.
The Associated Press had an article on Sunday describing the situation nationally. The story focuses on a recent grad who took a job in Florida and found it difficult to afford a home.
Kim had just received a doctorate and a job offer from a university that would double her salary to more than $47,000. But the prices of even small bungalows climbed far beyond what the young couple could afford even when they stretched their target price to an uncomfortable $300,000. So after several disappointing drives around the area and countless Internet searches, they ended up back where they started — in an apartment.
Here is a stunning quote regarding the market in California:
In California, the situation has long been the worst: Only 17 percent of households could afford a home with a median price tag in April, according to the California Association of Realtors.
By May, the median home price in California climbed to $522,590 — more than double the price in most other states. To buy the typical home with monthly payments of $3,067, a California family would need to earn about $122,700 to qualify for a conventional loan.
Personally, I blame the real estate speculators and sincerely hope that they all get caught with their drawers down. Unfortunately, the consumer demand that the housing market, through refinancing and capital gains, is fueling our economy. If the market were to collapse, our economy may follow suit, and that will hurt all of us. (via Fark)