Home Price Inequality - 4/4/16
Almost everyone is aware of rising income and wealth inequality in America, but what about home price inequality. As reported by writer Chris Kirkham, the widening gap between the middle and upper tiers of home prices is making it more difficult for families to trade up.
An analysis conducted by real estate tracker Trulia determined that fewer midrange homes came onto the for-sales market over the past four years in areas where the prices of high end homes rose the most. In other words, if someone owns a midrange home, one of the reasons that they may sell it is to pursue a more expensive home.
But if the really expensive homes are out of financial reach, people will just stay where they are. That means that those people who would like to move into those midrange homes don’t have much opportunity to do so. According to Trulia chief economist Ralph McLaughlin quote it’s really a gridlock, a traffic jam that’s playing out in the housing market close quote.
For instance, in Orange County, California, the price difference between a median and premium home in early twenty twelve was about $400,000. That’s a lot of money. But today, the gap between the median home and premium home is in the range of $660,000. That’s even more money.