US Home prices are Surging 13 times Faster than Wages
"U.S. Home Prices Are Surging 13 Times Faster Than Wages
Source: Bloomberg
In yet another troubling sign regarding the affordability of homeownership, new data shows that the growth in U.S. home prices is beating wage increases 13 to 1. RealtyTrac found that home price appreciation has outpaced wage growth in 76 percent of U.S. housing markets during the past two years."
In some areas the ratio is even worse. My area of Norcal is 17-1. Yet homes are lasting just a few days on the market and it appears as if 2006-07 is here again with runaway prices exceeding incomes. This cannot continue.
Why has it in this area? Not much is available and people are buying for fear that they will never be able to afford them if they don't buy now. Much too much exuberance. It appears people are likely paying much more than they will for the same house a year from now.
In 2006 a starter home here was nearly $500,000. By 2009 the same home would have cost you 199,000. Condos which were selling 240,000 were selling at 130 -140,000. Now they are again 225,000. Bull dozer bait is selling for $275-300,000.
Personally I think now would be a good time to watch your money very closely and rethink your exit strategies. I don't think any long term projects are a good idea unless you plan to keep them for quite awhile; years.
AND do not believe the "this time is different" proponents.
Just my two cents.