Is the dream of home ownership dead?

I’m not talking to the people who are already on the ownership train. Your dream is still intact.

I’m talking to everyone who is on the outside looking in.

For generations, the standard American Dream was to get a good education, find a secure job, and buy a home for your family.

Many people still aspire for this, but I’m beginning to wonder if the drumbeat about affordable housing has all but killed the notion of home ownership for everyone else?

There are several stories in the news today that got me thinking.

First, for the first time in almost two years, Seattle is not the hottest housing market in the United States. It fell to second behind Las Vegas. However, to put that in context, you can buy a 4-bedroom, 2-bath, 1,800 square foot house in Las Vegas for around $300,000. With a 3-car garage on a big lot. In Seattle, depending on the neighborhood, that same house would easily be over a million dollars. In some places, at least $1.5 million.

So if you’ve been waiting for things to cool down in the market so you can swoop in and finally buy something, things did not suddenly get that much easier. By “slow down,” they mean they are getting 10 offers above asking price instead of 25.

The other story that got me thinking is entitled “Starter-Home Affordability Hits a Decade Low” from Bloomberg News.
That sounds encouraging, right? Except when you do the math. The article basically is about a metric used by economists to look at housing afforability. It goes something like this: What percentage of your income would you need to set aside to be able to make your mortgage payment? The lower that number, the better it is for the consumer. Right now, that number is in the low 20s. Anything over 33 percent is considered too high.

Back to our example cities. A mortgage on the house in Las Vegas is about $1,600 a month, but that’s assuming you have good credit and make a 20 percent down payment. It seems doable for many people.

In Seattle, our example home clocks in at closer to $5,000 a month. And that’s if you could actually find one for a flat one million dollars. Add in all the taxes and you will need a pretty high paying job to pull it off.

I think we now have a generation of Seattle residents resigned to being lifelong renters. They have done the math and just forfeited the dream all together.

I hear that Vegas is nice in the winter time.

You can hear “What are we talking about here?” everyday at 4:45 p.m. on 97.3 FM.

More from Ron Upshaw