Affordability: Part Three
Supply and demand are metrics that unto themselves are very powerful pricing arguments. Having said that and holding Supply and Demand aside the next point is affordability. How affordable is the local real estate market?
Metro Orlando ranks ninth amongst the nation’s top10 affordable real estate markets when comparing ownership versus the rental market.
|
Rank |
City |
Own vs. Rent Ratio |
Annual Ownership Costs |
Annual Rent Cost |
Climate |
State Income Tax |
|
1 |
Detroit, MI |
94% |
$8,519 |
$9,072 |
Very Cold |
Yes 4.75% |
|
2 |
Pittsburgh, PA |
97% |
$8,947 |
$9,252 |
Cold |
Yes 3.07% |
|
3 |
Rochester NY |
113% |
$9,523 |
$8,448 |
Brrrr! Very Cold |
Yes 8.82% |
|
4 |
Memphis, TN |
114% |
$8,593 |
$7,524 |
Moderate |
Yes but very Complicated |
|
5 |
Tampa, FL |
115% |
$10,823 |
$9,444 |
Mostly Warm |
NO! |
|
6 |
Cleveland, TN |
119% |
$9,934 |
$8,364 |
Moderate |
Yes but very Complicated |
|
7 |
Dayton, Ohio |
119% |
$8,420 |
$7,056 |
It gets cold |
Yes 5.925% |
|
8 |
Columbia, SC |
123% |
$9,855 |
$8006 |
Moderate |
Yes 7% |
|
9 |
Orlando, FL |
124% |
$12,107 |
$9,756 |
Mostly Warm |
NO! |
|
10 |
Dallas, TX |
124% |
$12,107 |
$9,756 |
Moderate |
NO! |
The primary question for affordability becomes; can the “average Joe” in any given market afford to buy a home? With the low interest rates and a 3.5% down payment on a $125,000 mortgage payable over 30 years commands a payment of $614.92 a month for 30 years. This means that a person(s) making $30,000 per year with good credit and little debt qualifies for this mortgage*. Gee, isn't that an ”average Joe”?
*notice: this scenario has been configured as an example only, and does not constitute a valid offer for financing.
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