MSNBC: "House prices outstrip wages for even middle-income workers"

[Bush_Eats_Beef]

Dream of owning home slips further from some
Once-affordable cities too pricey for low- and moderate-income families

The Associated Press
Updated: 12:01 a.m. ET Aug. 9, 2005



WASHINGTON - Housing prices are far outstripping salary increases for low- and moderate-income jobs, putting the American dream of owning a home beyond the reach of teachers, firefighters and other community workers in many cities, said a study being released Tuesday.

The report, by a coalition advocating affordable housing, found that even cities once considered affordable, such as Tulsa, Okla., are rapidly becoming too pricey for lower-income workers such as janitors and retail sales employees. The study found the median price of a home in the United States rose 20 percent in just 18 months, to $225,000. During the same period, wages for teachers, firefighters and nurses in most cities remained flat or increased slightly, but still fell far short of the annual salary needed to buy a home, the report from the Center for Housing Policy said.

For example, the median household income for a nurse rose 10 percent between 2003 and 2005, to about $36,000. For a firefighter, wages were flat, remaining at about $37,000 a year. Those salaries don’t come close to the $71,000 annual income needed to qualify to purchase a $225,000 home. The number is based on a down payment of 10 percent. “It’s not just the level of housing prices versus wages, but the fact that, especially in some areas, the housing prices are growing so much faster,” said Barbara Lipman, the research director for the center.

The least affordable places in the country were the usual suspects: San Francisco, Orange County, Calif., and Northeast cities such as New York and Boston. Some of the most affordable places were in the Midwest, places like Waterloo, Iowa, Saginaw, Mich., and Lima and Youngstown, Ohio.

[Lannes]

1. My city has had the highest pct increase in prices in the US

Middle class and lower workers cant afford to live here they have to commute for the most part.The only reason I do is because I rent a house from a very nice elderly couple who let me live here when they could rent it for alot more.

They have had lousy tenants in the past and we get along great and I pay the rent on time.Im very fortunate.

[Liberty Belle]

2. If Dems could propose a solution to this, they'd have a winning issue

[Bush_Eats_Beef]

3. Agreed...I don't think anyone wants to give up this dream permanently

I have a friend who's a realtor. A couple of weeks I asked him when he thought the "house flippers" and speculators would move on to some other "investment," and if working people would ever be able to afford a decent home in a decent neighborhood again. He didn't have an answer for that, and we are in one of the worst areas (Silicon Valley, CA).

[SoCalDem]

5. The solution is painful, but it would work..

Spec buying is what's hurting the market there are super-wealthy people who have no problem buying up houses (and who have contacts "inside" to tell them when a house is a 'bargain')..they flip them and make lots of money in the process.. they create a "frenzy" mentality that keeps people buying houses they cannot afford..

Tax benefits should be for ONE house.. the one you LIVE in..


and wages have to rise..

If the middle class loses the ability to buy a home, it's "game over".

[gatorboy]

4. I was talking to someone about this recently.

We noticed that few if any new houses built these days are even for middle class buyers.
They're automatically built and priced for someone in a upper class price range because no one in a lower income bracket could begin to afford them.

[SoCalDem]

7. When we moved here in 1982, the billboards all boasted:

"4 Bedroom homes starting ...low $60s"... Now they say mid $300s for 3 bedroom..:(

The plan is for middle class & lower classes to buy back into the slummy houses (all they can afford), then fix them up, so that the next round of gentrification can push them out..rinse & repeat

[katamaran]

12. We have a new development going in near us

We have a new development going in near us that had a sign that originally read "Affordable Housing Starting in the Mid-200's!" Nevermind that mid-200's is NOT affordable housing around here. They recently painted over the price on the sign and today replaced it with "Affordable Housing Starting in the Mid-300's!"

Meanwhile, my boyfriend of 6 years and I both still live with our parents because our combined income of $62K doesn't even buy a crack house anymore. People always ask when we're getting married. We used to reply that we just wanted to take our time and grow up a little and get our careers going. Now, we reply that we can't get married because we can't even afford to LIVE together. That shuts them up.

[starroute]

6. It's hardest on the next generation

My sons and their friends are in their 20's and mostly still living with their parents because they can't afford to move out. Even when they finally earn enough to live on their own, they won't be able to afford to live around here. But goodness knows where they'll all go -- because the only places with housing have no jobs. Will they all be pulling two hour commutes with gas at $10 a gallon?

[borlis]

8. I couldn't afford to re-buy my own house now.

We've made a good amount of $$ as the value has risen, but if we sell and move, where are we going to go? Out to the sticks somewhere? I have a friend who lives outside of Orlando. She paid $299,000 for her house 2 years ago. It just was appraised for $539,000 and her pool has just been started! She couldn't afford her own neighboorhood now either!

[JDPriestly]

9. It's a scandal.

Los Angeles is hard hit. That's good for us, but terrible for people starting out. I don't see how the prices can hold up.

[Lannes]

10. Dont forget property taxes

They have gone up dramatically too.

[borlis]

13. Mine too.

I am now paying over $7400/yr. House is about 2500 square feet. Lot size is 1/4 acre.

[Tux]

11. Plus

As baby boomers support sending middle class jobs overseas with NAFTA/CAFTA or bring 3rd world workers here on H1B, youger people (remember us?) won't be able to afford homes. Even if I got a job at average pay for my area, I would need 2 roommates to pay all the bills and have some money to save for Certificate of Depsoits (my retirement plan since SS will be destroyed and no pensions for anyone but bomers).

[Spock_is_Skeptical]

14. hell yes they are... totally out of reach for many

unfortunately...including myself, so far. :(

[Blue_Tires]

15. the GOP will just tell us to marry a rich guy/girl!!!

problem solved!