14 May 2019

[Real Estate Tip of the Month] Should You or Should You Not Be Buying in Your Market? Here’s a Key Metric You Should Be Tracking Very, Very Closely

NOTES: So Kathleen is basically talking about the ‘Housing Affordability Index’, which measures the percentage of people in the area who can afford the median priced home. It’s a number from 1-100, so the higher the number the better.

Big takeaway: Once the affordability rate slides down to 17%, you’re probably in a market that’s peaked, so you’ll want to be extra diligent in what and how you purchase any properties. And if you’re flipping, you really want to make sure you’re buying at a good enough price and terms so you can move the property, even at a discounted price.

This is a stat put out by NAR (National Association of Realtors), with each state chapter putting out their own statistics.

How do you find this data? A quick search on Mr. Google under ‘housing affordability index’ + ‘your city’ and ‘state’ will usually pull it right up for you.