Bloomberg 'Young People' Housing Affordability Index

16 Replies

Like everyone who spends time on the internet, I am very much tiring of the completely overused 'Millenial' term. Thus, I have translated it to 'Young People' the title of this post.

Today's great housing affordability index from Bloomberg.

I would direct your attention at the chart. My assumption is that any market with a 'Surplus' will not only have good deals in the present, but will become more desirable in the future. Young adults will need to catapult out of the high-priced cities. If not now, certainly when they have children. 

'Where to next?' Is an almost daily discussion in my New York City home. Interested in your thoughts on the list. Philadelphia,Tampa, Houston, and Salt Lake are good surprises from my perspective.

I guess it depends on their desired lifestyles.  The cities at the top of the list are also the cities that offer the best and highest paying job opportunities.  Young people grew up experiencing their families being displaced from homes, because breadwinners were locked in to high mortgages coinciding with falling home prices, while their incomes were either eliminated or squeezed.   Mostly suburban markets like Tampa, Phoenix, Orlando were the hardest hit.   

Time will tell whether they become interested in marriage (large percent say they will never marry) and having children will influence their decision to move to areas with lower costs of living and lower priced homes.

Personally, I think the statistical fact that young people are interested in staying uncommitted is great for real estate investors.  For the meantime, they mostly seem interested in leaving themselves financially "available" to the best job opportunities....which means not anchoring themselves with a mortgage.  

Eric,

That is some good insight. I look forward to taking advantage of the market here in Orlando. I've heard differing statistics regarding "Young People's" intent to marry, but either way I've seen some pretty good deals already in my preliminary research. 

Thanks for sharing this @Trevor Ewen , this is great insight.

@Fay Chen Claremont is so beautiful though, I miss it over there!

@Eric Odum I completely agree, it's very advantageous for us buy & holders.  Check out this chart showing home values vs. rents:

@Richard Ellis , there are definitely some great deals to be had here.  There is a huge demand for affordable housing, hence all the new apartments going up everywhere.

@Andrew Davis , Yup. We are seeing unprecedented starts in MultiFamily here in Tampa. Ratio of square footage MF to SFR is something I have not seen in my career. Not saying the institutional guys are always right, but their money is definitely in MF right now.

@Trevor Ewen

 That's so true! I can imagine the difference in commission for real estate agents. But actually I've seen higher pay for engineers in TX, especially in my industry (Oil & Gas). Maybe that's why a lot of young professionals are leaving CA for TX. 

Originally posted by @Trevor Ewen :

Like everyone who spends time on the internet, I am very much tiring of the completely overused 'Millenial' term. Thus, I have translated it to 'Young People' the title of this post.

Today's great housing affordability index from Bloomberg.

I would direct your attention at the chart. My assumption is that any market with a 'Surplus' will not only have good deals in the present, but will become more desirable in the future. Young adults will need to catapult out of the high-priced cities. If not now, certainly when they have children. 

'Where to next?' Is an almost daily discussion in my New York City home. Interested in your thoughts on the list. Philadelphia,Tampa, Houston, and Salt Lake are good surprises from my perspective.

 I always love these affordability charts. They without fail prove that the places where people want to live are the most expensive. I can write this article today, yesterday and tomorrow. Very very few people WANT to move from CA to Detroit, some are forced to. Others chase the low costs. But for the most part people want to live in great cities, NYC, SF, LA, Boston, etc etc etc. They will always be the most unaffordable. if you want affordable, just drive 4 hours into the middle of nowhere and buy a house for $30K. 

@Fay Chen Yes, I can attest to the high paying jobs here in TX. For all engineers but especially in O&G. Only downside is with gas prices now, hardly anybody is hiring within the O&G sector. Wait a few years though, it will slowly and steadily come back

@David Schach

While I think your point make sense in general, I think it's the outliers that are important. Here are some notably great places to live that are on the very affordable side of the list. As investors, this should concern us:

Pittsburgh, PA
Atlanta, GA
Louisville, KY
Columbus, OH

4 cities that are in no way reminiscent of Detroit. Great job and lifestyle potential. They're not the only decent ones, either.

@Benjamin Ouderkirk , I'm in Pipeline Integrity Management. There's still a lot of demand for it. I guess it's more stable because all operators are required to have integrity management programs. And the certification process (NACE) takes a long time, so qualifying candidates get top dollars. Definitely a good field if you are looking for more stability.

Originally posted by @Trevor Ewen :

@David Schach

While I think your point make sense in general, I think it's the outliers that are important. Here are some notably great places to live that are on the very affordable side of the list. As investors, this should concern us:

Pittsburgh, PA
Atlanta, GA
Louisville, KY
Columbus, OH

4 cities that are in no way reminiscent of Detroit. Great job and lifestyle potential. They're not the only decent ones, either.

 Yeah, not sure i would call them great places to live. One could live there if they had to. But certainly wouldnt rank anywhere near the top of places one would move across country for. If you grew up there, went to school there, etc, you could make a decent life there. Not bad places to live, not great either. Acceptable. Atlanta has some upside but the weather is awful. I dont know much at Kentucky, other than its Kentucky. Its an after thought for 99.9% of the country i would say.

http://www.huffingtonpost.com/2014/12/29/best-cities-for-millennia_n_6374304.html