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The Housing Crisis Is About To Become A Disaster
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The Juice covers cost of living from multiple junctures and perspectives. Most recently, we looked at the absurd cost of keeping a vehicle on the road these days. A necessity for many, if not most Americans. In that article, we gave examples of other cost of living focus areas. Maybe read that Juice after you read this Juice? Today’s Juice returns to our primary focus — the cost of housing. The housing crisis. Because, for many (if not most) of us, housing is our single biggest budget line item. Save the people in the back giggling over their mortgage-free dwellings. We have consistently hammered three themes in our housing Juices:
That last part is the key. Realtor.com put out a list of the 20 hottest housing markets for June 2024. They are (city name, median days on market, median list price during period):
We reproduced the entire list because it’s important. And telling. If you live in or near any of those places, we would love an on-the-ground report. Feel free to use the feedback link at the bottom of the page to get in touch with us. Our point: take a good look at that list because many of the names on it are below the national median. For now. Similar to how places like Portland, Austin and even Oakland and Brooklyn got out of hand. Maybe they were never below the median, but these examples were inexpensive relative to the nearby locations (California’s expensive cities, New York City, etc.) would-be homeowners could no longer afford. When people flock to bastions of affordability — especially people financially and professionally well-heeled to buy in these places — slowly but surely, they cease to be affordable. Or, at least, they become less affordable. For goodness sake, the median home price is up a whopping 40.8% year over year in #14 Syracuse. While not every city on the list has seen such a drastic increase, most of them are up annually. Today, it takes a monthly income of nearly $9,000 to afford the mortgage payment on the median-priced home in Syracuse. We figured 10% down on a $350,000 property at an interest rate of 6.8%. We included property tax and insurance and assumed you’re spending 30% of your income on housing. That’s steep. And that’s on a home that’s comfortably below the national median. But it’s in one of America’s hottest housing markets. Hot because it’s relatively inexpensive. For now. The writing is on the freaking wall. The Bottom Line: The burning questions for millions of renters who probably could buy somewhere. Do it now or wait? While The Juice can’t answer that question for you, we do think the Rochesters, Syracuses and Columbuss of the world deserve your attention now. They, along with dozens of other medium and small cities, are set to see property values skyrocket as the nation’s housing crisis gets worse in the next 3 to 12 months. Once rates start coming down, all bets are off and cities like the ones we’re talking about today will end up out of reach for people who waited too long. |
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