Consider this: between 2000 and 2005, housing prices have gone up 46%, or 7.9% per year. But at the same time…
- The population has gone up only 4%.
- Rental prices have gone down 16%, or 3.5% per year.
- Nonfarm payroll employment has dropped 14%, from almost 900,000 to less than 780,000.
- The ratio of buying a median-priced home to renting a place for a year has grown from 14.1 to 34.0. In contrast, in the New York area, which isn’t exactly cheap, it’s 25.4, and for the whole country it’s 17.1.
So housing has gone up by almost 50%, but rents and employment have dropped by about 15%? Does this make any sense to anyone?