Affordability

In today's, "Solving Life's Next Chapter" we speak with Sarah Perkins with Lawyers Title of Arizona.  Sarah breaks down why  Arizona is still one of the most affordable places to live and if we truly are in a  "BUBBLE". 

In order to understand affordability, we have to look at what is happening across the country and locally. Affordability is measured nationally but felt local, here in Arizona:
*AZ is a top destination
*250-300 new residents a day moving to Phoenix metro area
*The majority of people coming to the greater Phoenix Metro area are leaving southern California, mostly Los Angeles County, and San Diego County. People are leaving NYC, Chicago, Southern CA, Seattle for cheaper living and sunshine. (Slide #1)
*Over 50% of the people moving here are over 55
*People moving here can afford more expensive homes
*52% of incoming people make over $100K a year (slide#2)
https://www.unitedvanlines.com/newsro...
Arizona is running advertising campaigns inviting more and more people to leave the west coast for Arizona and it is working. Our job growth is nearly 2.5 times the rest of the country over the past 20 years. (Slide #3)
https://www.nahb.org/News-and-Economi...
Sarah Explains that when people cannot afford to buy homes or move up when they need a bigger home, we run into some big problems. One of the coolest things about homeownership is the path to wealth. Nothing creates wealth the way homeownership does. (Slide #4)
If our homeownership rates continue dropping as they have over the past 10 years, we have the potential of causing some massive changes to the US economy. The national homeownership rate is around 63%. It is a tough number to move because they are so many Americans. However, when you look at that number, a couple of drops can put us close to the 50% mark. When we as a country hit 50% homeownership rates then it is likely that some of the extra perks of homeownership could go away. When you have a country that is made up of 50% renters, which means the voters will be 50% renters and likely many of the congressmen will be renters. This could affect new policy and adjustments of current policy benefiting homeownership. As homeowners, we love having our values rise but in order for real estate to continue to be 13% of GDP, we need to make it an option for renters to become homeowners, and affordability is the biggest hurdle. (Slide #5)
If a renter expects to stay in the same place for 3-5 years, it is in their best interest to buy. Even if they have to pay a little more than what they could spend on rent, they will come out ahead. Using the example below, if a renter pays about $200 more per month to buy the median home today in Maricopa County, without any increase in value, after 5 years the owner will have $40,000 in equity, and that is based on 0 appreciation

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