Suburbia or City

[AsianDragons]

wow that is so low

[Jonesy55]

That's nationwide, obviously it's more than that in the major metro areas.

Here in the UK the median is something like £160k (A$250k).

[tpe]

Originally Posted by Jonesy55

Well it's true Australia does have some of the world's most expensive real estate, and Sydney is the most expensive city there. I think A$600k is around 8x median household income in Sydney so still fairly unaffordable despite high incomes.

According to this the US median home price is currently $186k.

http://www.realtor.org/news-releases...arter-sales-up

I was talking to an old friend from Chicago yesterday. He is moving to buy a beautiful apartment in one of the famous landmark Chicago lakefront buildings, the edgewater beach coop building, popularly known as the pink hotel. The price is a bit lower than the median you state here. It is an exquisite apartment, in a building which is important to the history of art deco in the USA.

I have said time and time again that there is hardly a city in the world comparative to the size and scale of Chicago that can match it in terms of the excellence of its housing stock and reasonable pricing structure. Many of the vintage spaces in Manhattan are dumps by comparison.

It should come as no surprise that the median price here in the US is comparatively low. Owning ones own home is an important component of the so-called American Dream.

[joshsam]

Yet, more people rent homes in the USA compaired to a lot of European countries... The difference is just that a home of 200.000 in the USA will easely cost 500.000+ anywhere in the EU.

[tpe]

Originally Posted by joshsam

Yet, more people rent homes in the USA compaired to a lot of European countries... The difference is just that a home of 200.000 in the USA will easely cost 500.000+ anywhere in the EU.

I don't have the stats. But out in the country and in places like Chicago, the incentive to buy until recently has been very great. It did not make sense to rent when you can buy property so cheaply. Even in Manhattan right now, renting is now too high to make that much sense.

I suspect that the people here who don't buy are people who tend to move a lot more often here in the past decades. . I think that the stats will bear this out.

[AsianDragons]

home ownership is vital to the economy's health, new zealand has the highest home ownership in the world which points to it being more stable in the economy, in contrast isnt dubai's mostly migrant population mainly tenants, who cant own property (mainly construction workers) proving to be a problem in dubai. i wonder what will happen when they leave dubai will it crash the economy?

[joshsam]

Originally Posted by tpe

I don't have the stats. But out in the country and in places like Chicago, the incentive to buy until recently has been very great. It did not make sense to rent when you can buy property so cheaply. Even in Manhattan right now, renting is now too high to make that much sense.

I suspect that the people here who don't buy are people who tend to move a lot more often here in the past decades. . I think that the stats will bear this out.

I think many middle class people in the United states forget how many people in their country actually live a life that is less fortunate then theirs are have no choice but to rent. Probably because they never see the problems from up close. Anyway I have some stats to prove my point home ownership is higher in Europe than in the US.

According to this list USA is on 15th place.

And another list:


from: http://www.nahb.org/generic.aspx?genericContentID=57411

and another one:


from: http://www.cbsnews.com/8301-505123_1...ground-part-1/

[joshsam]

Originally Posted by AsianDragons

home ownership is vital to the economy's health, new zealand has the highest home ownership in the world which points to it being more stable in the economy, in contrast isnt dubai's mostly migrant population mainly tenants, who cant own property (mainly construction workers) proving to be a problem in dubai. i wonder what will happen when they leave dubai will it crash the economy?

AS you can see from the stats I posted above, home ownership is by far not vital to an economy's health. Countries like Germany have lower home ownership than Spain or Greece who are in deep shit right now. Infact for Europe, It seems that countries where more people rent homes have a better economy.

[tpe]

The data you cited here is from 2009, which is still pretty much at the height of the housing recession. So that data is understandable. It is most likely in marked contrast to the statistics before the housing bubble burst in 2007.

The main problem right now are the banks. It is much harder to borrow money. As of now, the tide is turning once more. It may take a few more years, but when borrowing money opens up once again, you will see a swing to the other end, as it was before 2007.

People should remember that housing stats are tricky, especially when they are statistically edge-cases, so to speak. Also, the fact that the sampling is taken over different years make things hard to interpret constently.

[joshsam]

Well the last I posted is from 2002 or 2003. Still the difference stays, the US overall ranks not highest. Then again, the US a large country and it would be nice to compaire stats per state. I can imagine there are states in the US where home ownership is actually very low compaired to other states...

[tpe]

A more recent assessment on the state of affairs in Manhattan:

http://www.nytimes.com/2012/12/30/re...ealestate&_r=0

The Rental Tide Subsides
By JULIE SATOW
Published: December 28, 2012

Excerpt:

Apartment rents in New York City have been rising rapidly for several years, but signs are now emerging that the market has hit a speed bump and is finally shifting to a slower gear.

Manhattan rents have been dropping, with the average price $3,368 in November, $76 less than in October and the third consecutive month prices have declined, according to Citi Habitats.

While some of this may be seasonal — the rental market tends to soften during the winter — the pace of rental growth year over year has also slowed. According to Streeteasy.com, median rents are 1.5 percent higher than one year ago, a marked drop from the 10 percent increase that rents posted two years ago and the 15 percent of three years ago. Inventory is also up, with 13,618 Manhattan apartments for rent in November, a 21 percent increase over November 2011, Streeteasy found.

“The market is at an all-time high,” said Gary L. Malin, the president of Citi Habitats. “How much higher can it go in an economy that is still weak in many sectors? To think that the rental market could keep having record-breaking growth is just not realistic.” ...

... Those rents are pushing first-time buyers to the market, as are historically low mortgage rates. These buyers typically want studios and one-bedrooms, and over the past year, studio rents have shot up nearly 5 percent while one-bedrooms have posted 3.4 percent increases, according to Streeteasy. In comparison, rents for two-, three- and four-bedrooms have declined over the past year.

As more first-time buyers have entered the picture, sales of studios and one-bedrooms have jumped four percentage points, exceeding 52 percent of the market in the third quarter compared with a year ago. Meanwhile, rentals of studios and one-bedrooms dropped six percentage points, to 70 percent of the market, according to data from Miller Samuel. ...

[Suburbanist]

The comparison is not that simple among countries. You must look on the average age of households, for instance, and control for factors like adults living with parents well into their 30s (a sad but common occurrence in Italy and Spain, and worsening).

In many cities, renting costs more because the pool of renters is more risky (financially), since everybody else that has a passable credit score bought a home already.

[tpe]

Originally Posted by joshsam

Well the last I posted is from 2002 or 2003. Still the difference stays, the US overall ranks not highest. ...

Well, it just so happens that in the years prior to 2003, interest rates were relatively high in the US. In fact, the housing bubble in the US falls neatly within the period of 2004 to 2007.

That being said, I tend to agree with what Suburbanist says here (and what you also seem to imply in your last post): that country comparisons are not so straightforward. The closest quant analysis one can do with any reliability is to treat the housing and rental markets as what they truly are: sectors within the larger national financial system. The financial system within the greater US economy cannot be compared directly to the more modest (saner?) markets and economies of smaller nations. Extrapolations cannot be treated systematically with any reliability.

But perhaps we have digressed from the original topic...

[AsianDragons]

Originally Posted by joshsam

AS you can see from the stats I posted above, home ownership is by far not vital to an economy's health. Countries like Germany have lower home ownership than Spain or Greece who are in deep shit right now. Infact for Europe, It seems that countries where more people rent homes have a better economy.

i think thats a major reason why the US is feeling the biggest effect of its recession, poorer people rent, when they rent they clearly cant afford a house then after that they get a pay cut that makes it worse, therefore they struggle most in the recession, the average american rich person is not affected much like the poor guy, what i want to say really is that the poor guy that has to rent is pulling the economy down, which is a factor

[Jonesy55]

The longer term trend of home-ownership in the US.



and similar for the UK...

[joshsam]

Thanks for proving my point. The world has changed.

[tpe]

Originally Posted by tpe

That being said, I tend to agree with what Suburbanist says here (and what you also seem to imply in your last post): that country comparisons are not so straightforward. The closest quant analysis one can do with any reliability is to treat the housing and rental markets as what they truly are: sectors within the larger national financial system. The financial system within the greater US economy cannot be compared directly to the more modest (saner?) markets and economies of smaller nations. Extrapolations cannot be treated systematically with any reliability.

But perhaps we have digressed from the original topic...

Here is an example of what I mean. Observe that the comparisons are not simplistic nor straightforward.

http://www.rreef.com/content/_media/..._July_2007.pdf

[charlottetonne]

suburbias kill cities, turning them into desolate crime ridden places, (see Detroit) where only those unfortunate enough who can't afford to live in suburbias get to live (look at how awful usa, australia, and canada are for example) with the city also the arts suffer, the urban movement declines, the sustainability of cities dies out, effective modern public transportation disappears, mom and pop stores with their own personality die to be replaced by big shopping malls with the same stores all over.......

it all ends up into a monogamous depressing landscape of miles and miles of houses that look alike, shopping malls and parking lots where the only thing that everyone feels is the profound boredom you get outta living these disgusting places!!! oh and don't forget.... you'll need a car to go anywhere!!!

(SUBURBIAS SHOULD BE FIREBOMBED OUTTA EXISTENCE FOR THE SAKE OF THE ENVIRONMENT)

[AsianDragons]

interesting perspective!

[Manila-X]

Originally Posted by charlottetonne

suburbias kill cities, turning them into desolate crime ridden places, (see Detroit) where only those unfortunate enough who can't afford to live in suburbias get to live (look at how awful usa, australia, and canada are for example) with the city also the arts suffer, the urban movement declines, the sustainability of cities dies out, effective modern public transportation disappears, mom and pop stores with their own personality die to be replaced by big shopping malls with the same stores all over.......

it all ends up into a monogamous depressing landscape of miles and miles of houses that look alike, shopping malls and parking lots where the only thing that everyone feels is the profound boredom you get outta living these disgusting places!!! oh and don't forget.... you'll need a car to go anywhere!!!

(SUBURBIAS SHOULD BE FIREBOMBED OUTTA EXISTENCE FOR THE SAKE OF THE ENVIRONMENT)

You're seeing it from a North American and to some extent, a South African perspective.

But here in Asia it is different as the city-centre is more vibrant compared to the suburbs.

Yes I live in the suburbs. But I work and spend my time in the city.