Real Estate is ‘as Affordable as it Gets’

Real Estate Is ‘as Affordable as it Gets’
Now is a good time to buy real estate, according to data from Moody’s Analytics. Home affordability has returned to pre-housing bubble levels or even fallen below the average in many U.S. markets.

In fact, housing affordability by the end of September had returned to or fallen below the average reached between 1989-2003 in 47 of the 74 housing markets that Moody Analytics tracked.

In September 2010, the ratio of home prices to annual household income had fallen to 1.6–below the historical average of 1.9 between 1989 and 2003. The ratio peaked in 2005 at 2.3.

“Based on incomes, this is as affordable as it gets,” says Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

Some of the most undervalued markets include Cleveland, Detroit, Las Vegas, Atlanta, and Phoenix.

But those cities also are facing high rates of foreclosures and more borrowers defaulting on their mortgages that could decrease values further in those cities before they start to improve, Zandi says.

In Phoenix, for example, “it’s become cheaper to buy than to rent,” Jon Mirmelli, a real estate investor in Scottsdale, Ariz., who rents out foreclosed homes, told The Wall Street Journal. “But the question is: can you qualify for a loan?”

Source: “Home Affordability Returns to Pre-Bubble Levels,” The Wall Street Journal Online (Feb. 8, 2011)

About Lake Arrowhead Real Estate

Hello ~ My name is Voni and I am a Real Estate Agent with Coldwell Banker Sky Ridge Realty in Lake Arrowhead. I am a Realtor with Rim O the World Association of Realtors. Twice past president of the Board of Directors and the 2010 Realtor of the Year. I've been actively Listing and Selling Real Estate since May of 1980. It is my passion to help people find the home of their dreams or sell their home to move into a new neighborhood. I have lived in Lake Arrowhead most of my life and find it's the Best Kept Secret in So. Cal.
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