Bloomfield Century 21 Realtor, Geoff Gove, looks at the numbers…From EcoRealty.com.
The typical American family, who makes the nation’s median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009. By comparison, only 55% were affordable in the second quarter of 2008.
The National Association of Home Builders judges a home to be affordable if a family making the median income could devote no more than 28% of their take-home pay toward housing costs.
There was a huge variation in affordability around the nation. All five of the most affordable major housing markets were in the Rust Belt, led by Indianapolis, which has been the nation’s most affordable major metro area for more than four years. More than 95% of all home sold there were classed as within the budget. Detroit was the second most affordable major market with 93.4%. The least affordable city? New York, at 20%.
Gove says our local market, though, seems to have bucked the trend. “Montclair is a world unto itself and is surviving well. New Jersey is tenth in the country for susceptibility to foreclosures – our proximity to New York City has helped us hold our value better than other states.”
Gove thinks local housing prices have dipped as far as they’ll go. “In the housing market, we now have the perfect storm: low prices, low interest rates, and high inventory. The next four-five months will be very telling.”
Julie Salmon at Coldwell Banker in Montclair says national numbers are an interesting index, but real estate is so local that she doesn’t pay too much attention to those trends. “You don’t know if the market has bottomed out until you’ve passed it,” says Salmon. “Things feel like they’ve picked up. Since February 1, there are 47 new homes on the market, and because inventory was so low for so long, there’s pent-up demand. I don’t know where that will take us.”
Salmon and Gove both said that homes in the $400K – $800k range are moving quickly after a dead winter, but the high priced homes and the condo market are still suffering. “There are a lot of empty nesters who want to downsize, even moving from homes to condos, and first-time home buyers won’t reach that high,” says Gove.
Meanwhile, sales of newly built homes took an unexpected 11.2% tumble, falling to a record low in January, according to government reports.
For a look at what houses are fetching in Montclair since January 1, check out Julie Salmon’s blog, Snippets Etc.