Even cheap homes have gotten expensive.
In ZIP codes where the median home price was less than $100,000 in early 2018, it has since risen by 42 percent, according to a CoreLogic Inc. analysis for the Wall Street Journal. That is double the increase for areas where the median was between $150,000 and $200,000 and triple for those where it was above $300,000.
Low-cost homes that need a lot of work and are frowned upon by mortgage providers had seen little price escalation in previous years. However, as a lack of available homes reduced options for buyers, they began scooping up those homes too.
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The increased demand among first-time homebuyers and people moving to the suburbs has the potential to revitalize the economies of areas where the housing market has suffered in recent decades, such as Detroit, Cleveland and Youngstown, Ohio.
However, some experts fear that the appreciation could prevent some families, especially young ones, from purchasing homes.
In Detroit, the least expensive ZIP code had a median home sale price of $45,500 in early 2018. Now it is 113 percent higher.
The trend has continued during the pandemic, during which home prices have surged nearly everywhere. In Detroit, home values climbed 24 percent in the 12 months through April, according to Zillow, vastly reducing the supply of quality affordable homes in the city’s better neighborhoods.
“The good houses are instantly gone,” manufacturing worker Tekeela Daniels, a mother of two teens, told the Journal. “It’s hard out here getting a house.”
[WSJ] — Sasha Jones