A recently released report shows America’s affordability gaps keep expanding, leaving American urban shoppers wondering whether buying in their dream city is best.
A recent posting from the experts at bankrate.com [1] points to the predicament currently being caused by skyrocketing home prices in certain cities, leading many buyers to even wonder if it is worth the expenditure. As home prices keep rising and the affordability gaps keep widening, the American housing market is leaving many more at a loss at to what to do.
To offer an example of the average costs in certain cities, a typical home in the popular Californian metro of San Francisco currently lists on the market for upwards of $1.3 million (and this is for a basic home that may even need some TLC). Should buyers be hoping for a more upscale abode, prices only soar from there.
While this California enclave is admittedly one of the nation’s steepest markets, where buyers most feel the pinch when hoping to purchase, home prices in other pockets of America have also risen to the point where purchaser are feeling the pinch. Such cities include popular urban locales like Boston, Denver, and Seattle, among others.
In contrast, some metros, including large cities like Cincinnati, Cleveland, Detroit and St. Louis, are still considered quite affordable. For example, in these areas, buyers can still manage to find a home selling for under $200,000.
As the affordability gap widens, showcasing this obvious schism, would-be buyers are forced to decide between abandoning their dreams of living in the primo cities where cost of living is as high as the plethora of high-paying jobs, or living in a lesser-desired area where they won’t be jumping in over their head with a backbreaking mortgage payment to look forward to each month.
To make this decision even more difficult is the fact that the most costly markets have offered homeowners the incentive of robust appreciation. Whereas in the more affordable markets, appreciation in home value is negligible at best.