Are Homes becoming too Expensive Again?
Some real estate investors say that some buyers are already beginning to over pay for homes, especially when it comes to bidding wars on REOs, foreclosure auction and over-priced new construction homes while there is so much distressed property inventory out there.
That doesn’t change that this is one of the best times for buying a home that we have ever seen but it does mean that every home on the market isn’t a ‘steal’ and it still makes sense to buy wisely.
Affordability is important. So where are homes still the most affordable and least affordable? Here are the top 5 in each category according to a recent report from CNN Money…
5 Most Affordable U.S. Cities:
- Youngstown, Ohio
- Dayton, Ohio
- Buffalo New York
- Indianapolis, Indiana
- Modesto, California
5 Least Affordable U.S. Cities:
- New York, New York
- San Francisco, California
- Bridgeport, Connecticut
- Santa Ana, California
- Los Angeles, California
Rising home prices is a good thing for everyone but those buying a home as a residence or investment property need to do their own research too and keep affordability in mind when choosing a sustainable destination or home that won’t go underwater.
When home prices exceed what locals can afford to pay they become unsustainable as in 2007 when in LA the average income could only afford an estimated 2% of homes on the market.
However, remember to factor for elements not included in individual reports and stats like increasing incomes and how many will always choose to buy or rent where they love the lifestyle or where they can find work regardless of how inexpensive housing is elsewhere. Look for room for growth, not just where price/ income ratios stand today.