What to do when prices are rising and wages are not
It is nice to see that the stock market has confidence in the future. Prospective home owners would like to feel the same way. They see rising home prices and stagnant wages and its a bit scary. No one can predict the future, but it does seem that home builders are not in any hurry to add lots of new homes.
Rising home prices and stagnant wages all over America
Home builders have finally figured it out. They over built and expanded too quickly during the 2002-2006 years. Then the crash came and sent prices tumbling along with the entire US economy. No one wants to go back to those days. Yet people are not getting raises, yet home prices are rising. Real wages have grown by only 10 percent since the end of the housing crisis of 2007. Rising home prices and stagnant wages have been with us for a while now.
Median home price is almost out of reach
The new Median Home price around the United States is now $320,000, according to the latest survey. This is an average of the four parts of the United States, East, West, Midwest and South. Its higher in the West, over $400,00, but less in the South, in fact in Jacksonville, the average sales price for a 3 bedroom 2 bathroom house is very affordable at $154,000.
Millennials still not ready to commit
More than one-third of Americans ages 18 to 34 said they are likely to opt out of home ownership over the next decade. This is according to an annual survey conducted by the U.K.-based consumer credit reporting agency Experian. About a quarter of Americans of any age also said they were likely to opt out of home ownership in that period. The number of Americans who said they are likely to opt out of home ownership increased 8 percentage points in this year’s survey.
The top reason for opting out of home ownership is the desire for flexibility, according to the survey. The other leading factors were not wanting to carry debt. Not wanting the responsibility of maintaining a home, and worries over rising interest rates. More than 10 percent of those who said they are likely to opt out of a home purchase said that “real estate is not as valuable anymore.”
Boomers not ready to be pushed out of their homes
First time home buyers are also getting older. The typical age of a first time buyer in 2016 was 32 years old, the highest since 2006, according to the National Association of Realtors. The Boomer crowd is not ready to give up their homes and be pushed into retirement villages anytime soon. Builders are not focusing on retirement villages, they are making more on the single family housing now.
So what do you do?
Well, keep on renting or work with a good Realtor who can educate you on what is available in your price range. Work with someone who knows the area, the prices per square foot and what people are paying more for these days. You need someone on your side when people are fighting over a property. Someone like Liz Bobeck Realtor. Call her today at (904) 210-6399.
For more information and quotes from leading economists, look here for the rest of the story.