4 ms·
Run-up in home prices is 'not sustainable'
- eurticket 8y agoNot news, we're not in the system that supports building affordable sustainable/homes.
- mikestew 8y ago"'The continuing run-up in home prices above the pace of income growth is simply not sustainable,' wrote Lawrence Yun, chief economist for the National Association of Realtors," Oh, yeah? Just because people aren't making the money to afford those houses? Earlier, it was pointed out that the high prices are due to "demand and low supply". People are going to do what they've always done if they want a house in a desirable area: both spouses work, and you're mortgaged to the hilt. Just a few days ago the wife and I were walking the dogs in our Redmond, WA neighborhood. Lots of 30 year old houses, not extravagant, used to be a "working class" neighborhood. Saw a house for sale that was $1MM asking. I can't find the Zillow listing (might have already sold), but it was nothing all that special. Our house is the low end, 1200sq. ft. @ $650K. That's where you start in Redmond. So I went home, and out of curiosity ran some quick numbers on what a $1MM house payment would be: $4200/month. Even making Microsoft money, that's a tough nut to make. Our house, were we to have to buy it again: something like $3200/month. So unless you're making six figures, you're not going to keep the house payment to 25-30% of take-home. "Sustainable"? If there's demand, and low inventory (Redmond supposedly has inventory measured in weeks), I don't see why prices won't keep going up.