Is the middle class being shut out of home ownership?
Ask anybody looking for a new home in the Augusta County, Staunton, Waynesboro market, and you’ll hear the same story: they’re gone as soon as they appear on the market, practically.
If you’re selling, the competition is good for your bottom line, of course, but if you’re looking to get out of an apartment or rental housing setting into a home of your own, it’s unsettling.
“My wife and I recently started our house hunt, and to our chagrin, there is absolutely no affordable housing in the Valley, and if by chance one does come onto the market, it will be pending 24 hours later,” AFP reader Aaron Gates wrote to me in an email this morning.
Most unsettling to Gates: not only are people like him competing with lots of other folks in his predicament, he may also be competing with big business.
Investment firms have figured out a way to enter the home-buying market, with one estimate having them buying 15 percent of the homes for sale in the first quarter of 2012, and as you can guess, when it’s you against Wall Street, Wall Street usually wins.
“This is great for sellers, but a death blow for anyone trying to escape apartment life,” Gates pointed out.
We’re working to analyze the impact of big business getting into the residential home-buying market here locally.
Anecdotally, there’s something going on pushing up home-sale prices.
Augusta County, for instance, is currently seeing a median listing price of $287,000, up 22.3 percent from the January 2019 median asking price of $234,750.
The market pressure in Staunton (13.6 percent increase over the three-year period) and Waynesboro (22.5 percent increase) is also noteworthy.
And then look over the mountain at Charlottesville (median listing price: $452,500) and Albemarle County (median listing price: $499,900).
The view from my home office window looks out at apartments with great access to Interstate 64, 26 minutes from the Fontaine Research Park, 35 minutes from Downtown Charlottesville, with rent ranging from $1,185 to $1,485 a month, in the ballpark of my monthly mortgage payment.
These data points are all related.
The economy is hot now – with U.S. GDP growing at a 5.7 percent rate in 2021, we’re learning today – and our local economy and job market are as strong as they’ve ever been.
It would be nice if more working- and middle-class families could participate in the spreading of the wealth with the types who can plunk down money into investment portfolios.
That would require us to ask Congress to disincentivize investment firms from buying up single-family homes by taking away the tax advantages promoting home ownership for individual buyers that the big guys can access at scale.
It’s a big ask, because the big guys are the ones whose campaign dollars get them access that we can only dream of.
Story by Chris Graham