It's the dream of almost every American, especially those with families, to own a house: a yard, 2000 square feet, a garage, a quarter acre (maybe more), and a white picket fence. The current spike in housing prices has really put a damper on that. Every year we see more and more folks priced out of the market. But how bad is it really?
More below.
This article is really a shocker:
http://rismedia.com/...
Here's the opening paragraph:
RISMEDIA, Nov. 2 -- California households, with a median household income of $54,140, are $73,810 short of the $127,950 qualifying income needed to purchase a median-priced home at $545,910 in California, according to the California Association of REALTORS® (C.A.R.) Homebuyer Income Gap IndexTM (HIGI) report for the third quarter of 2005, released.
When I first read it I realized that I make a bit more than the average salary in the article, and housing prices where I live (Oahu, Hawaii) are a bit higher than California. Seeing that I have to increase my salary by $75,000 a year (double, plus half again) before I'll qualify for a loan like that, and my salary increases 5 % per year (which it has the past two years), it will take 18 years for me to earn that salary, assuming housing prices remain flat, which of course they will not. I'd like to purchase my first home before I'm 55.
Condo prices here aren't much better: $290,000 is the average price, but with my current salary, I can only afford a mortgage on something about $200,000 or so. Anymore than that and my family and I will be eating cold Cup Noodle three meals a day, since we'll be able to afford neither food nor electricity. We already do without a lot of niceties like cell phones and two cars to pay for basic living expenses, preschool, and try to put some away each month for retirement/home purchase/daughter's college tuition. My wife is looking for a job, but as a foreigner without a bachelor's degree her options are limited.
I'm not looking to make a killing in the real estate market, I just want a place for my daughter to play outside and a little privacy for my wife and myself (we currently live in a 600 sq ft one bedroom apartment).
How is it that the average price of a house (what half the people pay) is so high that only 1-2% of the population can afford it?