MReport March 2018

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TH E M R EP O RT | 51 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Chicago Tops List of Most Affordable Rental Markets On the other end of the spectrum, California tops the list of most expensive rental markets. T he Windy City is the most affordable mar- ket for rental housing, according to a new report by online real estate and management firm HomeUnion. What's the most expensive rental market? We'll give you a hint: it's in California. HomeUnion's report breaks down the top 10 most and least expensive U.S. rental markets, spotlighting the annual rental for a single-family rental home, the aver - age annual income, and the rent-to- income ratio. Chicago tops the list as the only American metro where typical renters spend less than 20 percent of their annual income on housing. HomeUnion reports an average annual SFR rent in Chicago as $19,956, against an aver - age annual income of $102,180. That works out to a rent-to-income ratio of 19.5 percent. "With its low cost of living, relatively large housing inven - tory levels, and high affordability, Chicago is an excellent market for residents entering the renting pool," said Steve Hovland, Director of Research for HomeUnion. The second metro on the list is Charlotte, North Carolina, with an average SFR rent of $15,792. "About one-quarter of the average income of a typical Charlotte resident goes to rental housing, making it appealing to millenni - als," Hovland said. The rest of the top 10 most af- fordable single-family rental mar- kets include Minneapolis; Detroit; Atlanta; St. Louis; Raleigh; Houston; Oklahoma City; and Tampa, Florida. On the other end of the spec - trum, Oakland, California tops the list of most expensive SFR markets, with an average annual SFR rent of $37,524, an average an - nual income of $73,284, and a rent- to-income ratio of 51.2 percent. Rounding out the rest of the most expensive top 10 metros are Cincinnati; Salt Lake City; Orange County, California; Portland, Oregon; San Francisco; Washington, D.C.; Denver; Cleveland; and San Diego. "Low affordability negatively impacts all renters in the Bay Area, Denver, Southern California, and Washington, D.C., because of strong local job market condi - tions, intense demand for rental properties, and high mortgage costs for owner-occupied hous- ing," Hovland said. He added that "A significant number of potential young renters are migrating out of Ohio to Chicago or booming western metros such as Denver, the Bay Area, and Los Angeles, leaving mostly low-wage earners to occupy rentals." Real Estate Closed 2017 With Record Prices Median home prices rose 8.1 percent during the year. M edian home prices rose 8.1 percent year- over-year accord- ing to the January National Housing Report by RE/ MAX. The report indicated that 50 of 54 markets surveyed by RE/ MAX reported price increases even the sales in December 2017 dropped 3.3 percent from a year earlier, with 39 markets reporting fewer transactions. A monthly supply of inven - tory of 3.7, which is the lowest December figure recorded in the nine-year history of the report, made sales harder, the report said. This corresponded with a 14.6 percent decline in inventory, lengthening a streak of monthly declines that began in November 2008. Even though the speed of home sales was recorded at 57 days, the overall days on the market median for 2017 was at 52.5 days—nearly a week less than the 2016 median of 58.5 days. "We see the median sales of home prices across the country rising every month, year-over-year, but the days on market and the supply of homes sales hit record lows in December," said Adam Contos, Co-CEO of RE/MAX. In 2017, homebuyers paid record prices, led by June's median price sold of $245,000. Prices increased year-over-year in every month, with December marking the 21st consecutive month of year-over-year price increases, the report said. "If inventory keeps getting tighter across the country, it'll be interesting to see how it might affect sales," Contos said. In terms of closed transactions, the average number of home sales decreased by 2.5 percent in December compared to November 2017 and decreased 3.3 percent compared to a year-ago period. However, 15 of the 54 metro areas surveyed experienced an increase in sales year-over-year, including Trenton, New Jersey; Richmond, Virginia; Burlington, Vermont; and Raleigh-Durham, North Carolina. Anchorage, Alaska; Wichita, Kansas; Fargo, North Dakota; and Wilmington-Dover in Delaware were the only four metro areas that saw a year-over-year decrease in median sale prices. Sale prices in 10 metro areas increased by double-digit percentages, with the largest increases seen in San Francisco; Las Vegas; Seattle; and Boise, Idaho.

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