Housing Shortage Crunches Middle-Income Buyers
CNN’s Business web pages published an analysis that would interest the Costa Mesa real estate watchers who track the national press’s interpretation of the latest housing activity—it is they, after all, who establish the public perception of “how real estate is doing.” If the emphasis is on falling prices and activity, most would-be homebuyers expect that deals are there to be made. If the press describes a seller’s market atmosphere, emphasizing examples where multiple offers are the rule, homebuyers can often become discouraged before even taking a look at the actual Costa Mesa real estate market returns.
That was why, last Thursday, CNN Business writer Anna Bahney’s article rated a close second look. “Middle-income buyers face the most severe housing shortage” spelled out some of the repercussions that middle-income consumers face in a market that’s “short more than 300,000 affordable homes” for them to buy.
The numbers quoted were provided by the NAR®, which defines “middle income” as earnings that top out at $75,000 per year—an income that allows a family to comfortably purchase a home valued at up to $256,000. Neither CNNBusiness nor the NAR broke down the missing 300,000 homes by state, but it’s a fair guess that California and Costa Mesa would show proportionate shortfalls.
The report ended with an observation that two mid-income houses need to be added to the country’s inventory for everyone that’s currently available to upper-income buyers (those who comfortably afford properties priced above $680,000). Since that is not part of the nation’s current outlook, it’s “likely keeping some buyers in the rental market.” That’s one consequence that well-heeled buyers intending to invest in rental Costa Mesa real estate should find encouraging—once they find or rehabilitate mid-market rental properties.
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