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Are you still priced out?

Posted by Scott Van Voorhis  October 18, 2012 06:54 AM

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Forget about all the happy talk about how affordable home prices are now.

Not a day goes by now without some real estate website or Realtor group talking up all the deals buyers can now find out there.

Yes, home prices have certainly fallen since the peak of the housing bubble, even here in perpetually overpriced Greater Boston.

But home prices are still beyond the reach of buyers making the median in several major metro markets. And, you guessed it, the Boston area is high on the list when it comes to this gap between paychecks and housing prices - No. 6 to be exact, Interest.com reports.

At nearly $70,000, the median income for Boston and environs is one of the tops in the country.

But it falls short big time - by more than 12 percent - in what is needed to buy the average home, with the median price in the Boston area a lofty $362,100, according to the survey.

The housing tracker uses a standard measurement of affordability - no more than 28 percent of a buyer's income should go towards mortgage, taxes and insurance.

That puts us behind just a handful of other hotbeds of ridiculously high housing prices, including New York, Los Angeles and San Francisco.

"Housing prices are not down as much as they need to be," Mike Sante, managing editor of Interest.com, told me when I caught up with him the other day. "We have had very stagnant income over the past decade and it didn't keep up with prices."

Still, it's not just high prices and stagnant incomes that are the problem in the Boston area.
We also have high property taxes and high homeowners' insurance rates as well, Sante points out.

Then there is the fact that Boston is a big draw - like San Francisco and other boutique markets, lots of people want to live here.

"You put all that together and it makes homes less affordable in Boston than in some places like Atlanta," he said.

Still, affordability is not just a problem in Boston, but across the country.

Housing prices remain unaffordable in 11 of the top 25 metro markets across the country, Interest.com finds.

"Despite all of the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households," Sante says.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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