Priced Out

$56,132.

That's how much a new study says I'd have to earn to afford a house in Richmond, VA, an hour south of me. That market is the 77th least affordable. And DC is the 22nd least affordable. I live in between those two markets, and make about $20K less than that. Housing prices have gone up 20 percent in a year-and-a-half, and with the average median price of $225,000, the study notes that it now would take a salary of $71,354 (up from $54,855) to afford a house.

Housing prices continue to get further out of reach for most workers, said Barbara Lipman, research director for the Center for Housing Policy.

"I am not surprised at the results of the study, but I am dismayed," she said.

"It used to be a bicoastal problem affecting California and New York. That is not the case any more."

The answer is to create a supply of affordable housing, Lipman said. For instance, zonings for new developments could include some higher density allowances that would be cheaper, she said.

"The pressure is building for low to moderately priced housing."

 

While what I make I consider decent, it doesn't go very far after I pay rent and other bills. Even if I spent nothing on anything but the bare essentials--rent, taxes, electricity/water/sewer, car, insurance, gas, food (and phone if you want to stretch it out a little), I have just enough to entertain myself a little. I've eliminated cable, cut back on my landline phone, gone back to dialup rather than cable modem, and have cut back on grocery shopping (my most difficult cut is going to be the bookstore--that's most of my entertainment spending, that and gas to-and-from soccer games).

The median price of a home in Richmond is actually lower than the national average. I know here where I live, the housing costs are higher than that. I only have to take a short stroll to see that. Houses in my own neighborhood run in the mid-$400,000 range. The 25 year-old house my parents have is worth well over $300,000. Houses in their neighborhood are selling for even more than that.

If you go out and look at houses being built, the developers build large clusters of large houses at large prices. There's little space for yards between these houses; yards for large houses cost that much more. What happened to the type of houses I see on some of the rural roads, smaller houses that have more yard? You still have neighbors, but they're not on top of you, and you have more privacy. Also, they're not regulated on top of local ordinances by homeowners associations, which is like a local government within a local government.

Developers and local governments (probably state and feds too) have essentially priced a single person out of the housing market unless you make almost $60,000. Tell me a firefighter, police officer, teacher or nurse that makes that much. Perhaps a single doctor is in that range. In my own line of work (journalism/newsletter publishing), the salaries aren't high to start and don't get much higher over time unless you end up a marquee player on a big newspaper; I haven't had a raise in over two years. For instance, to make a career change from what I'm doing to being a sportswriter means a certain paycut of almost ten-grand. If I can eventually get my degree and be a sports information director at a university, I might be able to do better. Or perhaps I can go the route my dad suggested and get a government job.

I don't mean for this to sound negative. I'm making more than my dad made in all but the best years of his post-military life. But his salary then afforded more than mine does now with cost-of-living increases. My sisters live in relative comfort--one has a husband with a six-figure salary, and the other has a six-figure salary of her own to go along with her husband's.

But I would like to be able to buy a house someday and not struggle with the payments. I can't do that today.

Link: Center For Housing Policy: Paycheck To Paycheck 2005 Findings (lets you search through major metro areas or search by occupation)

Comments

[Jimmy]

You've probably mentioned it to me before, but it is a good idea. I mostly stopped using it after being a slacker about actually returning my books on time, that and I have the idea (fantasy?) of stocking a future home library. I should try to use again. I've got a couple of library branches I can use, though both are 15-20 min. drives. No biggie. But at least in the short-term, it'd curb one more area of discretionary spending and allow me to save a little more.

[Leah]

one thought for saving money:
do you visit the local library? I don't remember if we've talked about it before. But I've found that visiting the library often has really cut my spending on books. Anyway, just one thought :-)