In a further demonstration of the socially destructive and ever widening gap between the haves and have nots, we see that the affluent are buying second homes at an ever increasing clip (up 30% last year), while first home buyers recede into the abyss as private equity and Chinese buyers make purchasing a home unaffordable for the average American.
Specifically, a recent study from Zillow showed that more than half the homes in seven major American cities are unaffordable based on historical standards. Those cities are: Miami, Los Angeles, San Diego, San Francisco, Denver, San Jose and Portland, Ore. Nationwide, it found that 1 in 3 homes were unaffordable. The results seem to back up housing analyst Mark Hanson’s recent conclusion that despite low interest rates, housing is even less affordable than the most bubbly year ever, 2006.
This also appears to be a primary reason behind Zillow now actively pitching its U.S. real estate listing to the Chinese, many of whom are corrupt and looking to launder ill gotten gains.
First, from Housing Wire:
More than half the homes currently on the market in seven major American metros are currently unaffordable for local residents, and one-third of homes for sale are unaffordable by historic standards.
That’s the conclusion from a Zillow analysis of income, mortgage and home value data in the fourth quarter of 2013, which puts to question the regular industry claim that housing is more affordable than ever because of the current price and interest rate levels coming out of the housing crash.
“As affordability worsens, we’re already beginning to see more of the kinds of worrisome trends we saw en masse during the years leading up to the housing crash. These include a greater reliance on non-traditional home financing, smaller down payments and a greater pressure to move further away from urban job centers in order to find affordable housing options,” said Zillow chief economist Stan Humphries. “We’re not in a bubble yet, but we’re beginning to see the early signs of one in some areas.”
Zillow calculated affordability by analyzing the current percentage of an area’s median income needed to afford the monthly mortgage payment on a median-priced home, and comparing it to the share of income needed to afford a median-priced home in the pre-bubble years between 1985 and 2000.
More than half of homes currently listed for sale in Miami (62.4%), Los Angeles (57.2%), San Diego (55.3%), San Francisco (55.2%), Denver (52.8%), San Jose (50.9%) and Portland, Ore. (50.3%) are unaffordable by historical standards.
Nationally, Zillow found that one-third of homes are currently unaffordable, and in many metro areas, the majority of homes remain more affordable now than they have been historically for buyers making the area’s median income.
Moving along, trite concerns such as housing affordability don’t impact the increasingly small group of people who do have considerable financial resources. For these folks, things have never been better, and they are splurging on second and third homes at an increasingly brisk pace. Don’t forget to send that Christmas card to Benny Bernanke.
For instance, from the Wall Street Journal we find that:
Sales of vacation homes are surging again, the result of rising wealth in higher-income households and renewed confidence in the housing market.
The number of second homes acquired for part-time personal use jumped 30% last year to 717,000 homes, according to an annual survey by the National Association of Realtors. The gain was the largest since the association started tracking second-home sales in 2003.
from A Lightning War for Liberty http://ift.tt/PE0omE
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