Purchasing a home remains unaffordable for many Americans despite continued declines in home prices and record low mortgage rates. And in the search for affordable housing, many consumers are relying on an already strained apartment market for temporary accommodation, as housing advisers urge Congress to implement government-backed rental assistance. The income needed to purchase a median-priced... [more]
Purchasing a home remains unaffordable for many Americans despite continued declines in home prices and record low mortgage rates. And in the search for affordable housing, many consumers are relying on an already strained apartment market for temporary accommodation, as housing advisers urge Congress to implement government-backed rental assistance.
The income needed to purchase a median-priced home dropped in 93% of the markets studied by the Center for Housing Policy – the research affiliate to the National Housing Conference, an advocate for policies that promote affordable housing. Yet, despite the drop, many Americans still do not earn enough to own a home.
The study compared and ranked the costs of buying or renting a home in more than 200 US metropolitan areas with the salaries of more than 60 jobs.
Consumers are renting more, according to the survey, but the typical rent for a two-bedroom home rose in 89% of those markets to meet the demand. The rise in rents and drop in homeownership costs are most noteworthy in Florida, where the income needed to buy a median-priced home fell more than 20% in 12 metro markets. Meanwhile, two-bedroom rents rose across all of the Florida markets by nearly 6%.
http://www.housingwire.com/2010/03/24/rents-rising-as-more-americans-can%e2%80%99t-afford-to-buy/[less]
Response by technologic
almost 16 years ago
Posts: 253
Member since: Feb 2010
Interesting, yet i can see how this is so. For my family, we need an extra bedroom in the next year or so but can't afford to trade up in Manhattan (or even the parts of Brooklyn we like best) despite the fact that prices are well off peak, so probably will end up renting.
Ignored comment.
Unhide
Response by Riversider
almost 16 years ago
Posts: 13572
Member since: Apr 2009
Rents in the outer boroughs and Long Island haven't moved much last few years. I can see this as a sea-change enabling people to raise rents. This phenomenon will hit Manhattan too at some point.
Ignored comment.
Unhide
Response by columbiacounty
almost 16 years ago
Posts: 12708
Member since: Jan 2009
6%= a sea change?
Ignored comment.
Unhide
Response by technologic
almost 16 years ago
Posts: 253
Member since: Feb 2010
Speaking of Long Island, one of my best friends is looking to buy there in the $500K range and sent me some links of homes they are considering. I was quite interested, since I had heard how much prices had fallen there, and expected to see some very nice homes. I was SHOCKED to see the opposite. For $500K, yes you get "space" in the form of a 3/4 bedroom home and yard, but the places are dumps. What are considered "renovated kitchens and baths" would be laughed at in NYC, and many have old or outdated roofing/shingles. Seems like a house in decent condition in a decent neighborhood in LI will run you closer to a million (so not worth it imo, but thats another thread)
Ignored comment.
Unhide
Response by somewhereelse
almost 16 years ago
Posts: 7435
Member since: Oct 2009
Of course, the opposite was true in Manhattan, mainly because renting was already a well-established option.
Ignored comment.
Unhide
Response by somewhereelse
almost 16 years ago
Posts: 7435
Member since: Oct 2009
"Speaking of Long Island, one of my best friends is looking to buy there in the $500K range and sent me some links of homes they are considering. I was quite interested, since I had heard how much prices had fallen there, and expected to see some very nice homes. I was SHOCKED to see the opposite. For $500K, yes you get "space" in the form of a 3/4 bedroom home and yard, but the places are dumps."
Your logic isn't consistent. They're dumps, yes, but that doesn't mean they didn't fall.
Dumps just cost more before. Friends who live on LI bought what I consider one step above a dump for $700k.
Ignored comment.
Unhide
Response by JuiceMan
almost 16 years ago
Posts: 3578
Member since: Aug 2007
"Consumers are renting more, according to the survey, but the typical rent for a two-bedroom home rose in 89% of those markets to meet the demand. The rise in rents and drop in homeownership costs are most noteworthy in Florida, where the income needed to buy a median-priced home fell more than 20% in 12 metro markets."
Digs and stevejhx, what do you think of supply and demand and the impact on rents? This statement seems contrary to your past opinions?
Ignored comment.
Unhide
Response by AvUWS
almost 16 years ago
Posts: 839
Member since: Mar 2008
If you do the statistics in Manhattan these just won't make much of a difference. In the rest of the country some 60-67% own their homes which means rental stock is less than half of total stock. In NYC only a small percentage own and only 8,000-9,000 units trade hands in a good year. So if there is a drop of even 1.3 that means 2-3,000 more people looking for rental units than had looked before. Relative to the number of people who move in/out of manhattan in a given year, relative to the number of new rental units coming online this season (NYT puts it at 6,500 in manhattan/brooklyn), it just doesn't mean much.
There are factors that affect NY rental prices dramatically like employment, but an increase in demand because people can't afford housing? In NYC that means they leave, not that they bid up the price of rentals.
Ignored comment.
Unhide
Response by stevejhx
almost 16 years ago
Posts: 12656
Member since: Feb 2008
Well, Juicy, nice to have you back!
If any of the data in that article were sourced, then I'd make a comment on them. But they're just figures about a survey I don't know anything about.
That said, since they're talking about FLORIDA - which as you have repeated said is unrelated to MANHATTAN (or didn't you say that?) - a rise in rents might occur in some places, but certainly in South Beach - as I was discussing on the phone with Digs earlier this week - it's still impossible to buy a place and rent it out and make money on it, UNLESS it's a short sale, which are affordable.
Eventually, over a long period of time, rents rise 100% with incomes. Therefore, since Florida was hit with the recession much worse than most places, you may very well be talking about a 6% rise in 2-bedroom rents from 1984 prices.
In which case, so the hell what?
Ignored comment.
Unhide
Response by technologic
almost 16 years ago
Posts: 253
Member since: Feb 2010
Somewhere else - you misunderstood my post. I was not saying LI home prices did not fall; my shock was what crappy houses are going for despite drastic price decreases there. I would rather live in a sub-par walkup in Manhattan that some LI dump needing $300k of renovations yet asking three-quarters of a million.
Ignored comment.
Unhide
Response by jason10006
almost 16 years ago
Posts: 5257
Member since: Jan 2009
NATIONALLY RENTS ARE DOWN, AND HAVE BEEN FOR A WHILE.
See the official CPI figures, which measure rents (only) - rents are DOWN both m-o-m and y-o-y per the official labour stats
j10006 - that's probably why that article didn't cite any sources. Typical of Juicy to pick something like that to make his comment on.
When the national unemployment rate hovers at around 10%, it's hard to make rents go higher.
Ignored comment.
Unhide
Response by somewhereelse
almost 16 years ago
Posts: 7435
Member since: Oct 2009
"Digs and stevejhx, what do you think of supply and demand and the impact on rents? This statement seems contrary to your past opinions?"
Demand up, sure. But supply also up dramatically... all the apartments that can't sell and now being rented out.
Proof is in the pudding, the stats show a whole lotta down...
Ignored comment.
Unhide
Response by stevejhx
almost 16 years ago
Posts: 12656
Member since: Feb 2008
SWE, these are the very same people who think that stock prices only ever go up, and the shortage of land in Manhattan means that prices will rise forever, and that people can actually afford to pay 50% of their take-home pay in rent. (Did I say petrzitz?)
The fact is, rents and incomes are 100% correlated over time, and owner's carrying costs and rents are 100% correlated over time. If you read what that article ACTUALLY says that's credible, is that the reason that people are renting is because buying is still way too expensive.
Interesting, yet i can see how this is so. For my family, we need an extra bedroom in the next year or so but can't afford to trade up in Manhattan (or even the parts of Brooklyn we like best) despite the fact that prices are well off peak, so probably will end up renting.
Rents in the outer boroughs and Long Island haven't moved much last few years. I can see this as a sea-change enabling people to raise rents. This phenomenon will hit Manhattan too at some point.
6%= a sea change?
Speaking of Long Island, one of my best friends is looking to buy there in the $500K range and sent me some links of homes they are considering. I was quite interested, since I had heard how much prices had fallen there, and expected to see some very nice homes. I was SHOCKED to see the opposite. For $500K, yes you get "space" in the form of a 3/4 bedroom home and yard, but the places are dumps. What are considered "renovated kitchens and baths" would be laughed at in NYC, and many have old or outdated roofing/shingles. Seems like a house in decent condition in a decent neighborhood in LI will run you closer to a million (so not worth it imo, but thats another thread)
Of course, the opposite was true in Manhattan, mainly because renting was already a well-established option.
"Speaking of Long Island, one of my best friends is looking to buy there in the $500K range and sent me some links of homes they are considering. I was quite interested, since I had heard how much prices had fallen there, and expected to see some very nice homes. I was SHOCKED to see the opposite. For $500K, yes you get "space" in the form of a 3/4 bedroom home and yard, but the places are dumps."
Your logic isn't consistent. They're dumps, yes, but that doesn't mean they didn't fall.
Dumps just cost more before. Friends who live on LI bought what I consider one step above a dump for $700k.
"Consumers are renting more, according to the survey, but the typical rent for a two-bedroom home rose in 89% of those markets to meet the demand. The rise in rents and drop in homeownership costs are most noteworthy in Florida, where the income needed to buy a median-priced home fell more than 20% in 12 metro markets."
Digs and stevejhx, what do you think of supply and demand and the impact on rents? This statement seems contrary to your past opinions?
If you do the statistics in Manhattan these just won't make much of a difference. In the rest of the country some 60-67% own their homes which means rental stock is less than half of total stock. In NYC only a small percentage own and only 8,000-9,000 units trade hands in a good year. So if there is a drop of even 1.3 that means 2-3,000 more people looking for rental units than had looked before. Relative to the number of people who move in/out of manhattan in a given year, relative to the number of new rental units coming online this season (NYT puts it at 6,500 in manhattan/brooklyn), it just doesn't mean much.
There are factors that affect NY rental prices dramatically like employment, but an increase in demand because people can't afford housing? In NYC that means they leave, not that they bid up the price of rentals.
Well, Juicy, nice to have you back!
If any of the data in that article were sourced, then I'd make a comment on them. But they're just figures about a survey I don't know anything about.
That said, since they're talking about FLORIDA - which as you have repeated said is unrelated to MANHATTAN (or didn't you say that?) - a rise in rents might occur in some places, but certainly in South Beach - as I was discussing on the phone with Digs earlier this week - it's still impossible to buy a place and rent it out and make money on it, UNLESS it's a short sale, which are affordable.
Eventually, over a long period of time, rents rise 100% with incomes. Therefore, since Florida was hit with the recession much worse than most places, you may very well be talking about a 6% rise in 2-bedroom rents from 1984 prices.
In which case, so the hell what?
Somewhere else - you misunderstood my post. I was not saying LI home prices did not fall; my shock was what crappy houses are going for despite drastic price decreases there. I would rather live in a sub-par walkup in Manhattan that some LI dump needing $300k of renovations yet asking three-quarters of a million.
NATIONALLY RENTS ARE DOWN, AND HAVE BEEN FOR A WHILE.
See the official CPI figures, which measure rents (only) - rents are DOWN both m-o-m and y-o-y per the official labour stats
http://www.bls.gov/news.release/cpi.t01.htm
see also another survey saying the same
http://www.rentjungle.com/rentdata/132/average-apartment-rents-decrease-by-4-percent-nationwide/
a recent WSJ article on the same:
http://blogs.wsj.com/developments/2010/01/07/faq-on-renting-is-it-a-good-time-to-sign-a-lease/
j10006 - that's probably why that article didn't cite any sources. Typical of Juicy to pick something like that to make his comment on.
When the national unemployment rate hovers at around 10%, it's hard to make rents go higher.
"Digs and stevejhx, what do you think of supply and demand and the impact on rents? This statement seems contrary to your past opinions?"
Demand up, sure. But supply also up dramatically... all the apartments that can't sell and now being rented out.
Proof is in the pudding, the stats show a whole lotta down...
SWE, these are the very same people who think that stock prices only ever go up, and the shortage of land in Manhattan means that prices will rise forever, and that people can actually afford to pay 50% of their take-home pay in rent. (Did I say petrzitz?)
The fact is, rents and incomes are 100% correlated over time, and owner's carrying costs and rents are 100% correlated over time. If you read what that article ACTUALLY says that's credible, is that the reason that people are renting is because buying is still way too expensive.
And it is.
agreed
And I'm a very happy renter for that reason.