Rising home prices is an oft covered topic here at City vs City. Wages take a close second. When these two subject combine, it means a cost of living reality check is in the works.
According to recent data, home prices in most US markets rose. Across all major US real estate markets, rising home prices have some homeowners excited. However, there’s another edge to the sword.
Rising home prices mean that the home you currently own is worth more, however it doesn’t necessarily make it easier to sell. Furthermore, would-be sellers are typically looking to purchase a new home in conjunction with selling their current home. Higher prices can therefore lead to hesitation.
What About Wages?
Wages are on the rise as well, by about 2.7% according to the available data. However, the problem arises when comparing the two data points.
While wages are growing a a rate of 2.7%, home prices are rising at a higher rate. in 18 of 20 major cities, home prices are rising at a rate of 5.4% or higher. Furthermore, data from Paragon Real Estate Group, a San Francisco-based realtor, paints a troubling picture.
Home prices in San Francisco are approaching “bubble levels.” The year over year change from 2017 to 2018 is a staggering 10.1%. That’s almost 4x the national average wage growth in the United States.
The only worst offender in the pack is Seattle which has seen a terrifying 12.7% increase in home prices over the last year.
A Bubble Brewing?
Seattle and California’s rising home prices are nothing new. However, with year over year growth in the double digits homes are becoming less affordable. It’s no surprise then that many citizens are choosing to flee California’s high cost of living and take refuge in states with a lower cost of living.
City vs City is a powerful cost of living calculator that determines the real cost of living in your city. The app compares costs at the zip code level, including the cost of housing, transportation, and state and local taxes.
With City vs City, not only can you determine the true cost of living in your city, you can compare those costs against another city of your choosing. If rising home prices have you considering leaving California, Seattle, or anywhere: download the City vs City app and find out which city can offer you more bang for your buck.