Skip to content

Seattle Bubble

local real estate news, statistics, and commentary without the sales spin.

Menu
  • Home
  • About
  • Contact
  • Reference
  • Speaking
Menu

A Question Of Affordability

Posted on November 3, 2006June 20, 2007 by The Tim

It is generally accepted that the more desirable an area is, the less affordable it is to live there, and specifically, to buy a home. For instance, homes in San Francisco have always been ridiculously expensive—even considering the higher median income there—because it’s considered by many to be a highly desirable place to live.

For reference, here are the affordability indices (definition) for a few cities (using county-wide data from City-Data.com) around the country as of the year 2000.

City Afford.
Houston, TX 204
St. Louis, MO 181
Sioux Falls, SD 176
Phoenix, AZ 147
Miami, FL 121
Seattle, WA 94
Boston, MA 88
San Diego, CA 87
San Francisco, CA 58
New York, NY 20

I think most people would agree that in general, cities that are lower on this list are more desirable. Obviously everyone has different opinions and preferences about what they like in a city. When I say that City A is “more desirable” than City B, I am not making any personal value judgment, but rather all I am saying is that some statistically significant percentage of people would prefer to live in City A if given the choice.

Allow me to lay out the point of this post in a very logical way.

Premise: More desirable = less affordable (and vice versa)
Fact: King County’s affordability index dropped 26.7 points 2000—2005.
Fact: The affordability indices of many less-desirable locations were either stagnant or increased from 2000 to 2005.1
Query: How has King County become 29% more desirable since 2000?

This is a completely serious question. If affordability was dropping nation-wide, then I could buy the argument that massive home price gains are due to “fundamentals.” However, that is simply not the case. Huge increases in home prices have been largely limited to cities on the coasts.

If someone would care to make an argument explaining how our area is 29% more desirable now than it was in 2000, I’m all ears. Otherwise, I’m inclined to believe that the 29% affordability drop has more to do with speculation than with “fundamentals.”

1For instance, the affordability index for St. Louis, MO dropped just 4 points from 2000 to 2005 (source), while the index for Houston, TX actually increased 20 points (source).

Share:

  • Twitter
  • LinkedIn
  • Facebook
  • Reddit
  • Pinterest
  • Email

Continue Reading

Next Post:
PMI: Seattle Increasingly Risky
Previous Post:
2007 Optimism, Part III: Some Cracks Appear

Tim’s Other Projects

Dispatches from the Multiverse

Tip Jar

Like what we're doing?

Drop us a tip!

Accounts

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
©2025 Seattle Bubble | Built using WordPress and Responsive Blogily theme by Superb
Menu
  • Home
  • About
  • Contact
  • Reference
  • Speaking