How Much do You Need to Earn to Buy a Home Now?
Can you afford to buy a house or condo in 2018 heading into 2019? Well, the answer might be yes, if you’re willing to move or invest somewhere more affordable for you. The US housing market is an interesting one.
Another property price survey, this one conducted by Property Sharks is revealing how the value of money varies across the US. The range is incredible, yet we should remember that ranges create opportunity for profit.
The researchers discovered that the price paid for a detached house in one city might only buy a closet in another city. The price of property per square foot in Manhattan ($1585 per sq ft), Boston, and San Francisco however is somewhat less humorous. Affordability is a real issue for most hopeful apartment and house renters and home buyers today.
And it’s the same for renters as prices for apartments varies wildly across states. In fact, rental prices might be said to vary even more.
Yes, more people are renting because the cost of buying, and the credit and downpayment requirements makes it mission impossible for the non-wealthy. Unison recently produced its 2018 home affordability report showing how much it costs to buy a home in each US city and how much salary a buyer needs to be able to purchase.
Add on property taxes, realtor fees, and financing fees, and the picture for high end buyers and investors is even more severe.
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Figure above courtesy of Unison.com Home Affordability Report
The Unison survey found California to be the most expensive, and not so surprisingly really, that buyers in San Diego, San Francisco and Los Angeles would need 16 to 20 years to save for a 10% downpayment.
Los Angeles Property Prices
The city of Angels is a key destination for many migrants to California. To enjoy the opportunities of California’s biggest city, you’ll need to pony up $715,000 on average for a home here. You’ll need an average salary of $187,000 with 10% down leaving you with a monthly mortgage payment of $4700.
The 27 mile stretch of hypnotizing Oceanfront called Malibu is one of the most desirable places to live, but the cost of the average Malibu home is a whopping $2,285,000. Your monthly mortgage will be about $15,000 and let’s not forget the property taxes of 1.1%.
Skyline View of Detroit, Michigan
Perhaps you’re in the property investment market for a cheap potential rental with huge potential? If you believe in the economic recovery in the Northeast states, a search in Detroit should help you find an average property can be had for a mortgage payment of $208 a month!
Home prices in Detroit are 2% of what you would need to spend in San Francisco for an average home.
And up in Minneapolis, you might buy a $240,000 property with a $64k income and enjoy a monthly mortgage payment of about $1500. And in Texas, with only $48k salary and enjoy a low month mortgage payment of just $1,222 for an average home.
Invest Where You’re Able To
Whether you’re an investor looking to improve property income or someone willing to move, there are still places to go to and property to invest in. Just make sure you’ve done your research on local employment, local industry, and which neighborhoods are ideal.
You may find yourself with a rental income gem, or just a nice place to live while you watch your property value climb.
Trying hard to manage a growing portfolio of investment properties? Maybe it’s time to go automated. You can lose the spreadsheets and piles of receipts, folders and leases and manage it all from one software console. Check out ManageCasa and discover the benefits of property management software.
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