The Goldilocks Housing Market: Too Expensive, Too Cheap, And Just Right (US Is Relatively Less Expensive For Housing Than Many Countries)

The US housing market is like the tale of “Goldilocks and the Three Bears.” According to a study by The Brookings Institute, there are three zone of average home price to income ratio: too expensive (orange and yellow dots), too cheap (blue dots) and normal or just right (grey dots). The too expensive markets (particularly the orange dots) represent heavily controlled (zoning, construction limits) coastal areas like San Francisco, San Jose Los Angeles and San Diego on the west coast and New York City on the east coast. The too cheap markets (blue) are typically non-coastal rust belt cities like Detroit, Toledo and Rochester NY and rural communities.


And there are the three bears of households, the Papa Bear, Mama Bear and Baby Bear. The number of Papa and Mama Bears in 2013 (denoted by Federal tax returns in 2013) is 5,532,526 as the top 5% of adjusted gross income. These are mostly the coastal dwellers. The Baby Bears live in the blue dot and grey dot cities and towns.


Although there are million dollar homes in some non-coastal cities like Chicago, Nashville, Phoenix and Denver.


On the international front, Canada leads the world in rooms per person at 2.5 with the US in second at 2.4. New Zealand and Australia at in third an fourth place. The top four are all former British colonies.


But in terms of housing expenditures as a percentage of household gross adjusted disposable income, the US is one of the lowest (only Norway and Korea are lower). New Zealand takes the cake (or Marmite) as having the highest expenditures on housing.


So, there you have it. If you want “affordable” housing, don’t live anywhere near Facebook’s Mark Zuckerberg and his tech billionaires friends on the west coast or the area surrounding New York city.  Try the mid-section of the country like Toledo Ohio where you can purchase “cheap” housing and dine at healthy cuisine alternatives like Tony Packo’s Cafe where you can get a Hungarian hot dog with chili!


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