Top 5 Least Affordable Housing Markets
When one thinks of the most expensive cities in the country, New York invariably comes to mind. In fact, New York, N.Y. placed sixth on Forbes list of the World’s Most Expensive Billionaire Cities.
It didn’t make the list, however, of the five least affordable housing markets. In fact, all five markets lie in the western part of the country.
The folks at Trulia measured affordability using current asking prices for an 1,800 square-foot home, with a mortgage payment on a 3.8 percent, 30-year fixed loan, and the local average monthly wage for area workers.
The first thing you may notice is that some of the markets are cities and others are listed as counties. Remember, these are housing “markets.” The second thing you can’t help but notice is that California regions dominate the list.
5. Los Angeles, Calif.
The estimated median household income of Los Angeles residents in 2011 was $46,148, which is significantly lower than that of the state as a whole. Yet the median home value in 2011 was $438,300, which is significantly higher than the state’s median of $355,600
According to Trulia’s study, residents of “La La Land” need 41 percent of their average monthly wage to pay their mortgages.
While almost three-quarters of the city’s residents graduated from high school, only 30.8 percent have attained a bachelor’s degree or higher. The good news for folks who are considering moving to Los Angeles, though, is that the crime rate, once sky-high, has steadily dropped over the past dozen years.
4. Ventura County, Calif.
Ventura County is located along the coast in Southern California. It is considered part of the Greater Los Angeles Area, which is most likely why it shares the city’s 41 percent “rule.” Forty-one percent of residents’ monthly wages go toward paying their mortgage payments. Thankfully, the area’s median household income of $71,723 is higher than that of the state as a whole.
The average sales price of a Ventura County home in July 2013 was $435,000, with homes in Westlake Village, Oak Park and Thousand Oaks selling for substantially more than that.
3. Orange County, Calif.
Folks in the OC would beg to differ that theirs isn’t the most expensive area in the state, but Trulia’s study finds that 44 percent of their wages go toward their monthly mortgage payments – 30 percent less than residents of the most expensive area.
The cost of living index in the county is 123.9, which is quite high, considering the index for the U.S. average is 100.
Orange county lies south of Los Angeles and includes the cities of Anaheim, Huntington Beach and Newport Beach, among others. In July, 2013, the average home cost in Orange County was $545,000, according to the Orange County Register.
That amount, however, would be a good down payment if you hope to buy in Newport Coast, Laguna Beach or Corona del Mar, where homes typically cost at least twice the average, according to DQ News.
2. San Francisco, Calif.
In May of 2013 the median price for a home in the City by the Bay topped $1 million, according to the Huffington Post. Why? Because “there are enough people with limitless amounts of money who want to live there,” Redfin CEO Glenn Kelman tells the Huffington Post.
San Francisco is a world-class city, although the weather may take some getting used to. You’ll also want to take your time getting to know some of the city’s various neighborhoods as they each have a distinctive vibe.
The cost of living index in San Francisco is 157.8, so it’s significantly more expensive to live there than most other places. The estimated median household income in San Francisco in 2011 was $69,894.
1. Honolulu, Hawaii
Although the median household income in the city of Honolulu is lower than that of the state, residents still need 74 percent of the monthly average wage to pay the mortgage.
The city’s average home sales price in July 2013 was $611,000, but prices are escalating rapidly. With the average listing price now at $1,063,000 there’s not much money left at the end of the month when you live in paradise.
A luxury waterfront home in Waialae will set you back an average of $2.4 million, while life dockside in Hawaii Kai will cost in excess of $1.5 million.
