Dismantling Home Prices in La La Land
We hear a lot of talk about “affordability” in housing, and we hear of widely diverse market prices from one U.S. city to the next. We’ve always thought of Fort Smith as being pretty affordable. In other words, if you have a good job and a reasonable level of household income, you can buy a home that will be ideal for you.
No so in a lot of other U.S. cities. You may have a good job, and you may make more gross income than your counterpart in Fort Smith, but you’ll be lucky to be approved for an apartment, much less a house suitable for your family.
Fort Smith sells affordable homes
Looking over March 2016 stats for Fort Smith home sales, we see that of the 156 homes sold so far this year, 85 – more than half – were in the $70,000 to $150,000 price range. Expand that up to $200,000, and you have 114 of the 156 sold homes. These are the affordable homes. They make up by far the biggest chunk of our market, because they’re the homes that the average person with an average salary can buy.
Then there’s Los Altos
In late 2014, Business Insider released its list of “The 20 Most Expensive Housing Markets In America.” The prices are startling, but what’s downright depressing is figuring out how a “normal” family can live in these places. Here are some examples of average listing prices of homes, starting with the Big 3:
1. Los Altos, Calif.: $1.96 million
2. Newport Beach, Calif.: $1.90 million
3. Saratoga, Calif.: $1.87 million
Everything is in California until you reach #10: Wellesley, Mass.: $1.09 million. Others include Mercer Island, Wash.: $1.01 million; Stevensville, Md.: $1.01 million; Orono/Medina, Minn.: $955,244; Winnekta, Ill.$933,182.
Remember – these are average listing prices. Some people might be saying, “Well, sure, but you get a lot more bang for your buck in those areas than you do in Fort Smith.” Really? Here’s a photo of a Los Altos, Calif., home, where the average listing price is $1.96 million:
But here’s the big problem: Take an average worker in Fort Smith, say, a guy who has a senior-level position in manufacturing and is making $50,000 a year. He can buy a $190,000 home in Fort Smith. Now, take a guy doing the exact same job out there in La La Altos Land. His home is going to cost him TEN TIMES what the Fort Smith home will cost out here. Do you think that guy in Los Altos is making ten times the salary – i.e., $500,000 a year? As a manufacturing supervisor? $500,000? Wow, where can I get a job like that?!?
No, the fact is, while many areas of the country have very high home prices, the salaries of working men and women haven’t kept up. In Fort Smith, you can still work and live a good life. In Los Altos, if you’re a manufacturing supervisor, I don’t know what kind of place you could afford to live in. Maybe you could check Craigslist and find an attic room for rent (non-furnished, surely) that you could afford in somebody else’s house. (In somebody else’s $1.96 million house,)
We’re happy right here in Fort Smith, and we’re happy helping people get into homes that are right for them and that they can afford. But, honestly, if you hear of a supervisor job in manufacturing somewhere else that pays $500,000 a year, send us an e-mail, because one of us just may go and apply.
Nick & Ellie