Podcast from NPR:
GOLDING: Is the area affordable? The bubbles are when you’re getting away from the fundamentals – when the demand is sort of outstripping the supply, but that demand can easily disappear.
VANEK SMITH: Ed and his team found that, nationally, the median household can afford the median house. So overall, housing in the U.S. is affordable, and that was not the case back in 2006.
GOLDING: Nationally, there’s really no sign of a bubble. But as real estate is local, we tried to focus on a few metropolitan areas that at least bore watching.
VANEK SMITH: In other words, there’s no national housing bubble, but there are, you know, baby bubbles.
GOLDING: I’m not using the bubble word. These are just cities that, based on our measure, show lack of affordability and a rapid rise in house prices. Many…
VANEK SMITH: OK, so this isn’t a bubble. This is just a little overheated maybe.
GOLDING: These are things – things are places to keep an eye on.
VANEK SMITH: These are places where housing is just way more expensive than the average resident can afford. Top cities – the top baby bubbles – were San Francisco and San Jose. In San Francisco, the Urban Institute concluded fewer than a quarter of local residents could afford to buy a home. Miami, Portland, Seattle and Los Angeles showed similar numbers, and so did Riverside, Calif., where developer Randall Lewis has seen business triple over the past couple years. And I asked Randall if this worried him.
LEWIS: Look, I remember going to a conference, and someone said the four most dangerous words in real estate are this time it’s different.