In one of the first responses to yesterday’s look at Seattle’s long-term Case-Shiller Home Price Index Ross Peterson brought up a good point: So equivalent annual income increase did not keep up with the housing prices increase but did the buying power keep up with the increase? I think the interests rates have fallen in…
Tag: fundamentals
Big Picture Week: Case-Shiller HPI Rate of Increase
We spend a lot of time on here talking about month-to-month changes in this or that index, looking for signs of what’s coming next in the housing market. This close scrutiny certainly has its place, but sometimes it’s helpful to take a step back and look at things in more of a long-term historical context….
Charting How Much Home the Median Income can Afford
A few days ago on my sarcastic interest rates post, Dave0 asked: I wonder what the chart would look like if you graphed out, from 2000 to present, the price someone could afford to buy with the given interest rate at the time (from the graph above), with payments equal to 28% of the median…
Checking Up on the “Forced Savings Plan” Myth
Please consider the following excerpt from a post I wrote that was originally published on the personal finance blog Get Rich Slowly (and later here): …if home buying is like a savings plan, it’s probably the worst savings plan on Earth. Would you voluntarily sign up for a savings plan where well over half of…
Improvement in Seattle Home Prices vs. Economic Fundamentals
Here’s an update to the area-wide price-to-income and price-to-rent ratio charts we first posted back in April. These charts are based on per capita income, “Median Contract Rent” (from 2005 adjusted using the “rent of primary residence” component of the CPI), and Case-Shiller home prices indexed to the county-wide median. They are not intended to…