Real Estate

Most people around the world would retire comfortably with $2 million, but in Manhattan $2 million is just the average price of an apartment. Oshrat Carmiel writes on Bloomberg: “The average price of all Manhattan home purchases completed in the three months through March was $2.05 million, up 18 percent from a year earlier and the highest in data going back to 1989, according to a report Friday from Miller Samuel and brokerage Douglas Elliman Real Estate. The price per square foot of all co-ops and condos that changed hands in the period jumped 36 percent to $1,713 on average, also a record.” (bloomberg.com)

Reuters reported that “home prices are rising faster than wages in most of the United States, making homeownership increasingly difficult for average Americans in some of the most populous areas of the country.” Among the populous areas, San Francisco and New York City become much less affordable. “While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,” said Daren Blomquist, senior vice president at RealtyTrac, which monitors housing market trends.

You need an annual salary of $51,115 to afford the national median home price of $222,700. But how much do you need to earn to afford a house in certain metro areas? HSH.com did a study to see how much salary you would need to earn in order to afford the principal, interest, taxes and insurance payments on a median-priced home in 27 metro areas. Here’s the salary needed to buy a home in certain markets:

• San Francisco: $147,996 salary needed to buy median home price of $781,600
• Los Angeles: $95,040 salary needed to buy median home price of $481,900
• New York City: $86,770 salary needed to buy median home price of $384,600
• Denver: $68,436 salary needed to buy median home price of $353,500
• Houston: $52,164 salary needed to buy median home price of $209,200
• Orlando: $47,811 salary needed to buy median home price of $205,000

(hsh.com)

If you ever wonder owning a home close to Walmart is better or worse than one close to Target, then there’s an answer. RealtyTrac just did a study and they found that homeowners near a Target have experienced better home value appreciation than those near a Walmart. Homes near Walmart only saw an average of 16 percent increase in home price and $24,900 in an average price gain. On the other hand, homes near Target saw an average of 27 percent increase in home price and $65,569 in an average price gain. The analysis is based on home values, appreciation and property taxes in zip codes with a Walmart or a Target. (realtytrac.com)

While the U.S. dollar is getting stronger, the cost of living in U.S. also gets more expensive. New York City and Los Angeles both made into the Economist Intelligence Unit as one of the most expensive cities in the world to live. New York City comes in at No. 7 and Los Angeles tied for eighth on the list. Here are top 10 most expensive cities in the world to live:

1. Singapore
2. Hong Kong
3. Zurich
4. Geneva
5. Paris
6. London
7. New York
8. Los Angeles
9. Seoul
10. Copenhagen

(wsj.com)

For some of us, homeownership is still the right move if the job and the living situation are stable. But in many scenarios, Jim Dahle at The White Coat Investor argues that homeownership is not the American Dream anymore. Many homeowners would be better off by renting instead owning, especially for people that expect to move within 5 years, loose jobs, or get divorced. Also, the argument for buying a house with a mortgage as a form of forced savings is weak. A lot of homeowners get foreclosed or take out home equity to spend on upgrading their lifestyles. Furthermore, the cost of owning does not go down over time due to the opportunity cost and the rise in taxes, insurance and maintenance. Dahle said: “The message is pretty clear- if you just owned your home you’d be rich and be spending way less of your income on housing. Of course, correlation is not causation. In reality, homeowners have more money and spend less of it on housing because they make and save more money, not because they own a home.”

U.S. News has released the ranking of the best places to live in America after analyzing the 100 most populous metro areas. The ranking is based on quality of life, local job market, affordability and desirability to live. Here are the top 10 places to live out of 100 metro areas:

1. Denver, CO
2. Austin, TX
3. Fayetteville, AR
4. Raleigh-Durham, NC
5. Colorado Springs, CO
6. Boise, ID
7. Seattle, WA
8. Washington, DC
9. San Francisco, CA
10. San Jose, CA

(usnews.com)

When buying a house choose the least expensive house in a good neighborhood. If commute time is taking into account, Jonathan Ping on his My Money Blog suggests that going for the shorter commute over the bigger house is a better decision when given a choice. Alex Tabarrok of Marginal Revolution also agrees: “Behavioral economics tells us that we quickly get used to big houses but we never get used to commuting. So when you have a choice, go for the smaller house closer to work.” (mymoneyblog.com)