The New York Times published an interesting interactive graph a few days ago, showing home prices compared to median incomes in major U.S. cities since 1979.
Moving your computer mouse over the lines (click on the image above to go the the live New York Times graphic) shows the information for each line as you pass over it.
Where are home prices headed?
On the one hand, local real estate has been surging in the month of April, as I’ve mentioned in previous posts. Extremely low interest rates, the First-Time Home Buyer Credit and home prices that are now nearly 20% lower than a year and a half ago make it a much more buyer-friendly market. The first-time buyer price ranges are especially active.
On the other hand, we’re seeing some economic news that I think is going to take some time to filter down. The IMF recently revised its global economic forecast: in January it predicted that world output would increase by .5% in 2009, and it now expects a 1.3% global decrease. Stories like this, along with other more U.S.-based news makes me think we’re not necessarily at the beginning of the end yet.
The home buyers I’m working with now don’t necessarily think we’re at the bottom of the market, but are taking advantage of hefty price drops and prime lending conditions to purchase homes they plan to stay in for a while. I think that’s a healthy way to approach this market.
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