Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
A new study was conducted by Harvard analyzing the impact of decades of housing policies that disincentive affordable housing. Declining inventory of affordable housing are preventing first time homebuyers from purchasing and pushing low income tenets out of city. Is this an opportunity for mid western cities with better access?
FYI: I didn't even know one could buy a house for under 100K before I moved to the US. The average apartment (forget about detached home) prices in Canada are insane. It's a similar case in most other parts of the world.
Housing prices aren't the only factor folks are looking at (contrary to what folks on BP feel). The Midwest can't attract quality jobs fast because there is little or no infrastructure/ecosystems needed for high-growth, high-paying jobs.
E.g. my sister and BIL work in Silicon Valley and (like everyone else) complain about housing prices in Mountain View. But they would not, in a million years, consider moving to the Midwest even though they frequently visit for outdoor activities/road trips. Why? They won't be able to make 50% of the money they if they move.
My physician uncle, an immigrant who moved to the KY 30 years ago, complains how his med interns/students are leaving KY to go to other parts of the country where there will make less money. That fact alone astounds him and his colleagues (his colleagues are not immigrants) because they have been conditioned to work, work, work. Why does this astound them? Generational shift; younger generation likes to not work for the sake of working and have a different concept of what quality of life means.
Midwest prices can be as low as they can get but till high growth industries don't move there we will continue to see a migration away.
Also, high prices are often an indicator of how attractive a market is. You don't want real estate prices crashing where you live/invest :)
I would say that it is a great opportunity! Change is constant and inevitable. You have to be informed to take advantage of the next great opportunity and the real estate market is one of the best ventures out there. The history of this nation is full of stories of land grabs, changes and shifts.
Unfortunately there are so many people who spend time focusing on the negatives: income and social impact etc., that we fail to look for ways to make the investment NOW. I work and live in Chicago in a rapidly gentrifying neighborhood and my biggest concern is that so many people who live here, are not in a position or perceive they are not to take advantage of the changes. We get caught up in the social media and reporting that leads to fear as opposed to action. There are investment opportunities that if sought out are available. Instead of giving up, its time to dig a little deeper.
Exactly! It's because the financial literacy of the average person is so low. There is opportunity everywhere, but you have to understand wealth creation and keep up on emerging trends. When you start looking for opportunity, opportunities abound!
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
If you don't have the funds for rent...then you for sure don't have the funds to move. Moving costs money and more so if it's cross country (ca to Midwest for example). Just basic things like a truck, fuel, food, hotel going to add up... Then you have the entire thing of finding a place to live and if you don't have good credit now you have security deposits for everything.
Oh and that pesky thing called work, you left one job to chase another and that time spent moving... probably unpaid.
And all this assumes someone wants to move, plenty people don't and won't.
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
8y
This article is not informative enough. There is a tremendous affordable housing crisis in west coast states, primarily California. Also, certain major cities on the East Coast. Affordable housing rarely is built. Most affordable housing is older, used housing stock. So areas, where the barriers to build new housing are high, have acute shortages of affordable housing. California ranks last - it is the most difficult state to build. Next, housing affordability will always be an issue for those with lower wages. In most markets, making minimum wage is not enough to afford an apartment. One of the ways to combat this is through section 8 vouchers. So the government does not get involved in producing housing, but fills the affordability gap through the private sector. Of course, not everybody gets a voucher who wants one.
I feel that continuing to provide nice, safe affordable housing in Albuquerque make sense, and that we will have a steady supply of renters. We charge $550-$650 for our 1/1 and 2/1 units, which is $223 below the Fair Market Rent for a 2/1 in Abq.
Clermont, FL · Member since 2017 · 37 posts · 43 votes
8y
I'm not an economist or anything but there are a lot of businesses that are embracing remote work in efforts to save money on office space and utilities, not to mention offshoring.
With this movement gaining track maybe we see people move inland to those rural areas throughout the country (or even abroad!) that allow them the flexibility to live cheaply or purchase that first home. There's so much of this country that hasn't been developed or even touched yet. Sea to shining sea!
Rental Property Investor · Aurora, CO · Member since 2018 · 288 posts · 117 votes
8y
very interesting.....lots of times people are paying way less than the FMR though, so it might be a little more dramatic than needed, but definitely lots of good points here...