One of the sadder facts of life is that the more you can spend on a house, the more options you will have. Many factors go into making that leap - affordability, convenience, size, proximity to transportation. This begs the question: What's truly affordable these days?
The middle class unfortuantely suffers the most during the home-buying process. The median income in Boston is a mere $67,540, but Trulia insists that a family pulling in said income can manage to purchase up to a $332,000 home, about five times their annual income. Given the number of post-graduation students and young parents that populate the Boston area, a $67,000 paycheck will only allow for so much savings, once expenses like loan payments and childcare are taken out.
When it comes to housing, middle-income families need help. They earn too much to qualify for apartments earmarked for low-income families, but they can't afford market-rate housing. So they feel very vulnerable. They get that letter telling them their rent or mortgage is going up, and they realize they're one pen stroke away from being displaced, from having to pay a lot more for a new apartment, or worse, having to leave the city.
After stretching and saving, what can a middle-class family in Boston expect to buy? The median affordable home in Boston is 1,250 square feet - an example of a floorplan is shown below.
In 2013 and early this year, middle-income earners were essentially priced out of many parts of the city, including Charlestown, the Back Bay, Beacon Hill, downtown, the South End, South Boston, and the Fenway.
In each of those neighborhoods, a household earning the citywide average of $80,000 a year could afford just a tiny percentage of the houses and condos sold, municipal data shows. In downtown Boston, for example, prospective buyers with household incomes of $80,000 could have afforded just 1.7 percent of the homes sold. In the South End, about 2.9 percent of transactions would have been within the reach of those house hunters. They could have afforded practically none of the homes that sold in the Back Bay and Beacon Hill.
So why does Trulia believe that a family making little more than $67,000 a year could afford a $332,000 house? The neighborhoods in which that kind of purchase is possible lack the essential amenities that drive prices up. Convenience, accessibility, safety - things that many take for granted. In order to combat this, Mayor Walsh has a new initiative that will hopefully bring more middle-class housing to the metro-Boston area, including the designation of more city-owned property for development. The mayor may also grant zoning and tax incentives to make certain projects financially feasible. Because of soaring property values, Walsh administration officials said they will seek to spur more middle-income housing production in outlying neighborhoods such as Allston, Brighton, Dorchester, Roxbury, East Boston, Hyde Park, and Roslindale.
Sources
http://www.boston.com/realestate/news/blogs/renow/2014/05/trulia_defends.html
http://www.trulia.com/trends/2014/05/middle-class-may-2014/
http://www.boston.com/realestate/news/blogs/renow/2014/05/the_illusion_of.html