Declining home prices aren’t all doom and gloom. Forbes used the National Association of Home Builders (NAHB) Housing Opportunity Index (HOI) to take a look at which of the 50 largest U.S. cities were changing the most with regard to affordability.
Affordabilty in this case means what percentage of homes sold are affordable by a median-earning household.
The Phoenix real estate market affordability came in at 30% in 2007. That number is now up to 60%, ranking Phoenix at #3.
For the nay-sayers, it’s not just housing price declines that lead to greater affordability. Increased buying activity can be a factor, influxes of first time home buyers (who tend to buy less expensive homes), and a relatively stable local economy all come in to play.
Yes, many of the markets listed below have been hammered hard. But increasing affordability is a good thing and a nice step toward helping stabilize and correct the housing market.
Here is the Forbes article on home affordability.
And here are the “Top 10” increasingly affordable real estate markets:
1. Las Vegas, NV
2. Sacramento, CA
3. Phoenix, AZ
4. Washington, D.C.
5. Tampa, FL
6. Providence, R.I.
7. Riverside, CA
8. Orlando, FL
9. Boston, MA
10. San Diego, CA
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{ 3 comments… read them below or add one }
Kevin (ReturnToManliness) 07.04.08 at 10:41 am
Las Vegas…that’s funny.
Not real high on the affordable scale, but ranks #1 on “increasingly” affordable. That’s code for the market is REALLY correcting. Since I am in real estate in the Vegas market, I can say we are very GM-like at the moment. We are not down to 1955 valuations, but certainly we have dipped down to 1995 levels.
Some doomsayers are claiming we have a long way to go here. That is impossible because of our land shortage, but it definitely could hover at these levels for awhile. It is insane…
Julia Bridge Phoenix Real Estate 07.05.08 at 7:43 am
Yea…positive words…I love it!
Jayson 07.05.08 at 9:29 pm
Earlier today I was reading an article on Forbes talking about cities expected to experience the largest decline in home pricing this year (something along those lines) and the list was just about the same as the above list.
It is good to hear some positive news - affordable markets are the ones that usually grow!