HOUSING NEWS REPORT
HOUSING NEWS REPORT
ATTOM DATA
ATTOM DATA
Median home prices in Q1 2018 were not affordable for average wage earners in 304 of 446 U.S. counties (68 percent) analyzed in the most recent home affordability report from ATTOM Data Solutions. Here’s a closer look at how home affordability plays out in the top markets with population departing and the top markets with population arriving, according to 2017 net migration data from the Census bureau.
AT ROOFSTOCK WE ARE SEEING INCREASING
INTEREST FROM INVESTORS IN A NUMBER OF SFR MARKETS THAT HAVE HISTORICALLY NOT GOTTEN MUCH LOVE FROM THE LARGE INSTITUTIONAL PLAYERS. “
GARY BEASLEY CEO AND CO-FOUNDER, ROOFSTOCK
Analysis : Affordability is a big challenge in two of the top three markets with the biggest drop in net migration of population: Los Angeles County, California, and Kings County, New York (Brooklyn). Homes are much more affordable in the third market, Cook County, Illinois (Chicago), but the economy is struggling as evidenced by a 3 percent decrease in average wages over the last five years.
in many of these less flashy cities like Cleveland, Pittsburgh and Detroit, as well as perennial favorites like Atlanta, Houston and Charlotte which have been popular with investors for several years. The nice thing about SFR is there is enough variety out there that there really is something for every investor, depending on their unique objectives.” RENTAL RETURNS INCREASE FROMYEAR AGO ONE-THIRD OF COUNTIES Potential annual gross rental yields for 2018 increased compared to 2017 in 150 of the 449 counties analyzed in the report (33 percent) led by Rowan County, North Carolina in the Charlotte metro area (up 36 percent); Randolph County, North Carolina in
the Greensboro metro area (up 32 percent); Tazewell County, Illinois, in the Peoria metro area (up 21 percent); Baltimore City, Maryland (up 21 percent); and Kings County, California in the Hanford-Corcoran metro area (up 20 percent). “As the stock market starts to show some weaknesses, investors continue to put their money into cash flowing assets such as rental properties,” said Ross Hamilton, CEO at Connected Investors, an online community for real estate investors. “Many view rental real estate as a way to recession-proof their income and retirement.” Among counties with a population of at least 1 million, those with the biggest increase in potential annual gross rental yields for 2018 compared to 2017 were Harris County (Houston), Texas
(up 7 percent); King County (Seattle), Washington (up 7 percent); Queens County, New York (up 5 percent); Contra Costa County, California (up 4 percent); and Cook County (Chicago), Illinois (up 3 percent). “The single-family rental market in Seattle remains strong, which is a good thing for the people who own the rentals, but not so good for tenants as rents continue to escalate,” said Matthew Gardner, chief economist with Windermere Real Estate, covering the Seattle market. “Demand for rentals is high but some of this is due to Seattle’s rising home prices. Growth in rental rates is robust in the core Seattle market, but as you move further away from the city it starts to soften due to more modest income growth in those areas.” •
Analysis : While not the epitome of home affordability, three of the four top markets with the biggest increase in net migration have home prices below the $300,000 mark, keeping affordability under the 43 percent of income line designated by the Consumer Financial Protection Bureau. The fourth market (Riverside County) has bargain home prices compared to its immediate neighbor Los Angeles County, where median home prices are more than $200,000 higher.
The ATTOM Data Solutions U.S. Home Affordability Index analyzes median home prices derived from publicly recorded sales deed data collected by ATTOM Data Solutions and average wage data from the U.S. Bureau of Labor Statistics. Affordability is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate mortgage and a 3 percent down payment, including property taxes, home insurance and mortgage insurance. Net migration data is from the U.S. Census Bureau and is the difference between the number of people moving into a county and the number of people moving out of a county in 2017.
42 | think realty magazine :: june 2018
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