It has been a while since we had a look at the local affordability index, and now that we’ve got all of the data for 2012, it seemed like a good time to take another look. As a reminder, the affordability index is based on three factors: median single-family home price as reported by the…
Tag: fundamentals
Checking Up on Goldman’s Bearish 2010 Two-Year Forecast
Readers may recall the following prediction from Goldman Sachs in June 2010: Goldman: Seattle Home Prices to Fall 22% More by 2012 Following their earlier collapse, house prices appear caught in a cross current. On the one hand, there are indications that prices may have bottomed. While alternative house price indices differ in details, they…
King County “Affordable” Home Price 21% Higher than Current Median Price Thanks to Low Rates
Since we looked at the affordability index yesterday, Let’s have an updated look at the “affordable home” price chart. In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the median household income could afford to buy at today’s mortgage rates…
How Would 6% Mortage Rates Affect Affordability?
In the comments on yesterday’s post, reader “Topdog” posed the following question: So the Fed stops playing funny money, lets interest float to market rate. Lets say a reasonable 3% premium plus the 3% inflation premium which puts high quality new mortgages at about 6%. How does that affect buyer affordability? That’s a question we…
What Does a “Recovery” in Real Estate Look Like?
When you read a story claiming that a “recovery” is just around the corner for real estate or that the housing market is “recovering,” what does that mean to you? Some people (mostly people who bought near the peak and real estate agents) think recovery means that home prices and home sales volumes will get…