If you know me you know I like looking at data to spot trends. My MBA Research paper was on the Albany housing market. I spentliterally hundreds of hours on regression analysis of Albany housing data trying to predict housing demand and price movements. The bottom line, predicting housing prices and demand is very, very, difficult. It can be done with about the same certaintyy as predicting mortgage rates moves or the stock market. However, when Albany housing statistics are evaluated it always involves the number of homes sold and the year over year sale price. I have said before, as a certified appraiser I prefer to use "paired sales" to measure price movements not median prices, but that is another issue for another time. I think the one thing often missed by housing statisticsÂ is a measure of housing affordability. I have never seen theÂ TimesÂ Union mention affordability in a housing article. Yet it isÂ a critical measure of the market. One firm that does an excellent job of reporting affordability is John Burns Consulting. They measureÂ home affordability for many, many metropolitan areas. The following statistics came from the November John Burns Consulting survey.
TheÂ main measure of housing affordability is the ratioÂ ofÂ the percentage of median income required to purchase a median priced home. The latest data released by John Burns ConsultingÂ shows that inÂ the Albany Market roughly 34% of the median household income is required toÂ by a median priced home. This will have dropped in the past week with the drop in mortgage interest rates. What doesÂ this mean?
Well for comparison NYC requires 78% of the median income toÂ purchase a median priced home. In Buffalo, NY it would take just 21% of the median household income to makeÂ payments on a median priced home. At 34% Albany isÂ just about fairly priced. Its not a bargain but we aren't yet priced out of the market.Â The Albany areas housing barometer rating is 5.3.Â Â The closer to 10 on the scale the more overpriced your market is. The closer the 0 the more affordable the market is.
Presently we are roughly in balance.Â Â The recent drop in interest rates has helped as well. So to anyone that says Albany is overpriced, look at the numbers! Have questions? Visit me online at http://www.clancyrealestate.com