One of the tricky parts about doing this newsletter is that I'm often wanting to present information that's wholly accurate, but seemingly contradictory. For example, it's absolutely true that housing affordability didn't worsen in 2024 - the first time in four years that this has happened. It's also entirely factual to say that the typical local family can afford fewer than 1% of the properties for sale here in Boston.
Let's tackle that first thing, and in doing so first define housing affordability. It's simply the percentage of a household's monthly earnings they'd have to spend on monthly housing costs. The US median income in 2024 was $83,782 and the median-priced home was $429,734. That means 41.8% of their earnings would be spent on housing, which is down from 42.2% in 2023. A slight decline, but a decline nonetheless - one that was primarily due to wage growth outpacing housing payments.
So, that second thing. You've probably already figured this out, but the difference is that this second thing is pertaining to Boston, whereas the first is aggregating national data. Big difference, of course. Bostonians need to spend just under 50% (!) of their income to buy the median priced home here. For reference, the age-old rule-of-thumb is that you should be spending no more than 30% of your income on housing. That's...quite a gap.
I am not an economist, nor am I a city planner. You've heard me in this newsletter before (and likely IRL) advocate for what I believe is the solution here: creating more housing. And yes, we need to do this even though the problem appears to not be getting worse (in Boston in 2023 you needed to spend over 50% of your income on the median-priced home).
What I am is a real estate agent who's really adept at listening to my clients, determining what's best for them, and helping them to stay within their personal means. It's important to stay informed about the macro, but ultimately what my job boils down to is taking care of you and yours on the micro level. It doesn't matter what median incomes were in 2012 or what interest rates were during covid or what could potentially happen under a new administration...if you have a very good reason to buy or sell in 2025, I'm going to make sure that the decisions you make are sound and set you up well for the future. We're not going to get overly optimistic because of one headline or too down over another...we're going to work based off of your personal circumstances in the housing market that makes sense.
The point of this newsletter is to stay connected. If you have any questions about where you're at or where you want to be, please reach out.
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