The strength of a nation derives from the integrity of the home.
-Confucius
I entered the workforce in the 90s and received this advice from my older co-workers: “Work hard, invest in your 401k and buy a house. One day you will glad you did all three.” This was good advice, even though it was difficult to understand as a young and single professional.
I recall several individuals telling me about the interest rates of the late 70s and early 80s. I was told to thank my lucky stars that I could even consider things like buying a home. Interest rates in the 90s were 5-6 percent, and you didn’t need much money for a down payment. Along the way, I resisted the urge to buy more than I needed or to flip houses, and have been blessed to survive a few rather serious housing shocks over two decades.
So what is the market telling those of working age now? As highlighted by Fortune, the 20-24 age category was the only one to shed jobs during the past six months. This could have tremendous implications if the trend persists, including on the real estate and home building markets.
While interest rates are are at historic lows, you do now need a hefty down payment and housing is becoming increasingly costly in some of our nation’s job centers. This comparison of what you must earn to buy a home in various cities is shocking. The median price of a house in San Francisco is over $781,000, and even higher in the smaller communities of Silicon Valley. You can’t even consider buying there unless you are making nearly $150,000 per year, and that’s assuming you went to college for free and you don’t eat much. International markets are even more unequal and risky.
Here is the good news. Joining the workforce, even at entry level, leads to bigger and bigger career opportunities. Buying a home when you can is still one of the very best investments you can make. It is also true that the United States is the best place to do it. Jobs for those with skills are plentiful in great communities all over the country, and wages are moving up for skilled workers.
The Columbus Region has led the Midwest in job growth from 2010-2015 and topped the nation in wage growth last year, so it is not surprising that the metro area’s housing market also enjoyed a record year of sales. The median home price in the Columbus Region this January was $153,000, an increase of 9.3 percent from a year ago. The unemployment rate is less than 4 percent, and so are many interest rates.
The housing market is an important indicator of the health of an economy. At this link, you’ll find a list of home builders that support the One Columbus Regional Growth Strategy.
-Kenny McDonald
One Columbus Update
- Last week, the Columbus Region was honored to rank among the nation’s top metros for corporate facility expansions and locations. We’ve made the list for 4 consecutive years, climbing it each time. We’re also proud to call Ohio home, which came in at No. 2 in the state rankings. Thank you and congratulations to the state and local partners who’ve made these achievements happen!
- This week, our team is on the West Coast and in the South to meet with companies and site consultants. We’ll also be in Orlando for JLL Academy.
- Panelists have been announced for the One Columbus Investor Update on March 17. We’ll hear from three leaders of assets important to our pursuit of high-wage, technology-driven, globally-oriented business in the Columbus Region: Mark-Tami Hotta, president and CEO of the Transportation Research Center; Matt Wald, CEO of the Columbus Collaboratory; and David Whitaker, vice president, business development and communications at the Columbus Regional Airport Authority.