Even compared to the highest incomes in Canada house prices in Alberta remain elevated.
According to Mike Fotiou for the first 17 days of September the median price of a single family home is at $390,000. This level is 4.26 times the median family income.
Whats does this buy? On Mike's site you can view daily sales prices and on Sept 17th there was one house which sold for exactly $390,000. A 1808 sqft 2 story home in Panorama Hills.
In Edmonton the median price for a single family home dropped to $350,000 in August. This is almost 4 times the median family income of $88,190. This 1600 sqft Ormsby home listed at $361,000 could theoretically sell for $350,000 given a typical discount (no sales prices are available).
For comparison the ratio in the US appears to be about 3.5 from this post but may have declined since then.Homes in Alberta are pricey compared to local incomes but not overwhelmingly so. Considering how low interest rates are factors besides affordability are probably driving the current decline, such as lagging employment and saturated demand.
2 comments:
Just for fun I did some calculations at the previous guidelines I used when I was a banker......
A $91,500 average family income at a 30% GDSR equals $2,289 a month......subtract $150 of taxes and $200 of utilities and that leaves $1,939 for mortgage debt service.
Which over a 25 year amortization at 5.5% equals a mortgage debt of roughly $315,000 +/- not counting CMHC fees and closing costs..........and back then, "lest we forget" you also needed a minimum of 15% down to qualify for CMHC mortgage financing........
Heh........
While the stat is true about incomes it is in 2008 and not 2009 when things turned sour in the housing industry.
otherwise I agree with you that back then housing was pricey but now I know with many people taking on second jobs just to keep up it is unaffordable at best.
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