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* One is a nit: if the average rent was $1000 in 2011 and went up 57% in the past six years, how is the average rent now $1749? Isn't that a 74.9% increase?
* I wonder how many of the $50,000/year and under people are retired people, living on investment income, who fully own their homes? These people will get priced out by property tax increases, among other factors. Then their old, sometimes run-down homes will be bulldozed and magically sprout new, expensive houses instead of being sold to other lower income people.
Anyway, it's a thought.
Possibly that 57% increase has been adjusted for inflation?
Recall that it is the household on which the housing cost falls, not the individual. Now combine the median household income with the new tax return study to mathematically derive fact that Seattle has a lot of people in multi-income households filing singly, instead of filing a joint return for all earners.
This is a much less alarming conclusion, though. It adds up all too well. It is a molehill that is much harder to pile up into a mountain. Armed with this much more boring news, it will be that much harder to persuade the proletariate to rise up and make your socialist revolution for you.
I think you mean Seattle is super broke.
A city of riches? Most Seattle filers make less than $50K, IRS data show
Right, that is because the zoning laws limit the ability to meet the demand. Think of it like a cartel. Artificial limits are being placed on the production of new homes. One classic case is what happens when a housing lot opens up in a single family neighborhood. The demand is for middle and working class homes. This should lead to small houses on small lots, row houses, apartments or condos. But none of that is being built, because all of it would be illegal. In my neighborhood, where dozens of lots have become available, the maximum lot size is 7200 square feet. The builder builds as much house as will fit the lot, and that is a very big house. So rather than building a dozen apartments, or a half dozen row houses, or three small houses, they build one gigantic house, worth a fortune. That is all they are legally allowed to do. Artificial scarcity has lead to very high prices.
And at the same time, home prices are entering a sphere that's easily accessible to only about 4000 people.
You are forgetting the difference between wealth and income. Very few people can afford a half million dollar mortgage. They lack the income. But most of the home owners in this city don't have huge mortgages. Most of them have owned their homes for years. Many of the new buyers have sold their house in a different part of town, or a different part of the country, that saw similar price increases. Wealthy relatives or friends may help buyers, by chipping in as well.
There are also a lot of middle income people that are simply paying a much higher percentage of their income on rent or a mortgage. Just like people all over the world paid a lot more for gas when OPEC limited the production of oil in the 1970s.
The chart in Balk's article compares single filers to joint filers, not individual income to household income. That data, combined with Seattle's median household income, is the basis of the observation I am making. Perhaps you should read it again, taking more time to consider the numerical reasoning presented.
"Many of the new buyers have sold their house in a different part of town, or a different part of the country, that saw similar price increases." That doesn't appear to be the case in MY neighborhood, where almost all of the people buying brand-new $700K-plus homes are in their late 20's to early 30's.
If you're sitting on a million in real estate (or whatever) and can't scrape together the $900/month (or whatever) for property taxes, you'd be an awesome candidate for a reverse mortgage. You could get like 50% of the value of your house, which should cover those increasing property taxes for a dozen or more years.
The fact that it (ie scale multi-family housing) is illegal on a majority of the city's residential land probably has a bit to do with this.
Seattle's median household income is $80k. I didn't invent that number, it comes from very reliable government data.
There might be other ways to reconcile that demographic fact with the tax return study, but the one I have suggested seems most likely-- that Seattle has many households with multiple earners filing separately.