Many U.S. Housing Markets Still Affordable
Georgia, Michigan and Pennsylvania have some of the nation’s most affordable housing, according to new data from RealtyTrac, which found that 48 percent of housing markets are still affordable by historical standards.
Those three states had the most counties listed on a “Top 30” affordable market list that focused on areas with flat or declining foreclosure rates. That affordability is good news for investors looking for opportunities in the single-family rental market.
Some of the most affordable homes were found were in Lansing, Mich.; Syracuse and Buffalo, N.Y.; Cincinnati, Ohio, and Atlanta.
Georgia had five of the most affordable markets in the nation that are experiencing flat or falling foreclosure rates: the Clayton, Douglas and Newton county areas, which encompass portions of the Atlanta-Sandy Springs-Marietta metropolitan area; the Augusta-Richmond County region; and Houston County, Ga., which encompasses the city of Warner Robins.
Significant price increases in some other markets, however, have RealtyTrac raising warning signs of a potential housing bubble.
“Affordability and foreclosure rates by loan vintage are two key metrics that will help consumers, investors, institutions and policymakers identify if a housing market is at risk for another price bubble,” said Daren Blomquist, vice president at RealtyTrac.
“While 99 percent of markets have not returned to the irrational affordability levels during the previous housing bubble, one in five markets have now exceeded their historical affordability norms, which is a strong sign that either a new home price bubble is forming in those markets or that home price appreciation will soon plateau until incomes can catch up.”
RealtyTrac also notes that foreclosure rates on loans originated this year are still lower than those originated during the previous housing bubble in most markets.
Still, there was an uptick in foreclosure rates on 2014 vintage loans compared to 2013 vintage loans in more than one-third of the counties analyzed by RealtyTrac.
The real estate analytics firm found 178 counties (37 percent of all counties analyzed) with a combined population of nearly 100 million where the foreclosure rate on loans originated in 2014 was higher than the foreclosure rate on loans originated in 2013.
Those counties included Cook County, Ill., in the Chicago metro area; San Diego and Orange counties in Southern California; Kings County (Brooklyn), N.Y.; Miami-Dade County, Fla.; Queens County, N.Y.; Clark County, Nevada(Las Vegas); King County, Wash. (Seattle); Santa Clara County, Calif. (San Jose); and Broward County, Fla. (Miami).
Investors, who have leaned toward low-cost REO to build their portfolios, will want to keep an eye on what happens going forward in those counties and metro regions where foreclosure rates are on the rise.
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