Skip to comments.Zillow Study Shows 1 In 3 Homes Are Unaffordable, But Vacation-Home Sales Are Soaring
Posted on 04/06/2014 10:19:04 PM PDT by Nachum
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 Hansons 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:
(Excerpt) Read more at zerohedge.com ...
I like how they blame it on the Chinese and not local politics
I see Beach Front Bargain Hunting on HGTV.
There is a great demand for the vacation home lifestyle and not only from the jet set crowd.
In Florida there were large numbers of unbought condos. From the late 1990s to 2004, I made a number of trips to Miami. We would come in the back way down the truck route from Lake Okachobi. Each year there were large numbers of houses being built ever closer to the Everglades. I kept thinking, “where are they going to get enough people to fill those houses?” Well, I guess they didn’t. I suspected it was one way to use drug money. Between the hurricanes and the Wall Street meltdown, the whole market there went kaput.
My son and family did a short sale of their home and left the area. I understand that large numbers of Brazilians have come in and paid cash for condos, to avoid inflation losses in Brazil. I haven’t heard anything about Chinese. I will ask though.
Foreign buyers are buying a lot of real estate, and they are driving up prices. But the only long lasting effect will be that they overspend for the houses, and prices will have to come down.
Unless, of course, that it’s the Russian and Chinese governments buying those properties in an attempt to wrech the US economy.
We sent them our money to buy cheap plastic crap, and they will give it back to us on losing real estate deals. We will come out ahead. At least we keep the plastic crap.
Housing is "unaffordable" mainly because most Americans looking to buy a home never actually buy one. Instead, they end up buying a mortgage. It's not the home that's "unaffordable" ... it's the mortgage that's expensive. And if the mortgage is expensive even with historically low interest rates, then there's obviously something wrong with this picture.
Probably has something to do with the regulations from Dodd-Frank Bill
I started watching “House Hunters” again and just turn it off now when the queer couples come on. My unanswered question remains unanswered though. How in the world do couples afford these houses? I mean fairly young, first time buyers. Some homes they are buying are more than a million dollars. Mommie & daddy helping out?
Society tells them they NEED to have this stuff PLUS that very expensive home. IF you don't have it, you are not successful.
Exactly. In the long run the mortgage interest and the taxes end up costing more than the house.
We ask this all the time. I don’t get it. In our neighborhood, a young couple with a kid bought the most expensive house in the platte.
“My unanswered question remains unanswered though. How in the world do couples afford these houses? I mean fairly young, first time buyers.”
I don’;t think they are buying them, because they can’t afford them and they don’t need them (no children anyway). The de facto amnesty is to put other people in those homes, including children brought across the border twenty years ago who would be in the market for their own housing now. Otherwise, the housing can at least be rented to current illegals.
“We ask this all the time. I dont get it. In our neighborhood, a young couple with a kid bought the most expensive house in the platte.”
Are they tenured public school teachers? If so, they have employment for life, salary increases annually, and banks love lending to them.
I would be very careful about relying on Zillow. I used to scan them a lot to compare against appraiser valuations. They tended to be very low
...”I like how they blame it on the Chinese and not local politics.”...
Just this a.m., I have read two articles which point to the need of politicians to always blame someone else for their sins. It is called psychopathology.
The Entitled Generation can be viewed on HGTV as they shop for their first home, looking for one better than their parents have for themselves and their dog.
No. They are in the private sector.