This page contains a Flash digital edition of a book.
MARCH 2012 |www.opp.org.uk WORDS | Cindy Fauth


BUSINESS


NAR VIEWPOINT | 33 Finding US bargains


A new housing affordability survey has revealed that affordability is at its highest amongst United States markets. The U.S. ranked highly in the index, with markets in Detroit, Atlandta, Phoenix and Las Vegas. But how can overseas property professionals take advantage of this, and the country’s $41 billion international property industry? OPP’s NAR columnist Cindy Fauth fi nds out.


A


recent report, The 8th Annual Demographia International Housing Affordability Survey,


shows that housing affordability is at its highest among U.S. markets. The report references NAR’s housing data (available at realtor. org/research), and looks at housing affordability in 325 metropolitan markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States. The study measures affordability using the “Median Multiple” (median house


price divided by gross annual median household income).


The United States retained last year’s 3.0 Median Multiple fi gure. Ireland’s housing market ranked second with a Median Multiple of 3.3, edging out Canada at a 3.5 ranking. Among 81 major metropolitan


markets analysed, 24 were found to be affordable markets, 20 moderately unaffordable major markets, 13 seriously unaffordable major markets and 24 severely unaffordable major markets.


Demographia Housing Aff ordability Rating Categories Rating Aff ordable


Moderately Unaff ordable Seriously Unaff ordable Severely Unaff ordable


Median Multiple


3.0 & Under 3.1 to 4.0 4.1 to 5.0 5.1 & Over


Source: The 8th Annual Demographia International Housing Aff ordability Survey


All of the affordable major markets were in the United States while three of the moderately unaffordable markets were in Canada and one in Ireland with the other 16 in the United States. Table four (next page) summarizes the results. The most affordable major market was Detroit, followed by Atlanta. The study notes that markets such as Phoenix and Las Vegas, which had experienced a highly volatile housing market and reached serious unaffordability at the peak of the housing bubble, have since restored housing affordability. Other affordable major markets within the U.S. were Rochester, Cincinnati, Cleveland, Dallas-Fort Worth, Houston, Orlando, Jacksonville, Nashville, Oklahoma City, Sacramento and Indianapolis. The most affordable major


metropolitan markets outside the United States were Dublin, with a Median Multiple of 3.4, and Edmonton, with a Median Multiple of 3.5. All major markets in Australia and New Zealand, as well as Hong Kong


were severely unaffordable. Hong Kong was the least affordable major market, followed by Vancouver and Sydney. The 3.0 Median Multiple ranking for the United States is a remarkable improvement in housing market performance compared to past years. The study shows that in 2006 there were fewer than 1.3 affordable markets for each severely unaffordable market. Today, there are more than eight affordable markets for each severely unaffordable market.


The report notes that the most


affordable markets were concentrated in the industrial heartland, where signifi cant employment losses occurred during the Great Financial Crisis. Saginaw (MI) had the lowest Median Multiple, at 1.3.


Other heartland metropolitan areas with unusually low Median Multiples (below 2.0) were Youngstown (Ohio- Pennsylvania), Lansing (Michigan) and Flint (Michigan). However, the majority of affordable markets in the United States were in regions with better economies and


National Housing Aff ordability Median Multiple (Higher is less aff ordable


14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0


A winner? | Las Vegas scored well on Demographia’s housing aff ordability survey Median Multiple:


Median House Price Divided by Median Household Income


Australia Canada


HK


Ireland


NZ


UK


US Source: The 8th Annual Demographia International Housing Aff ordability Survey


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68