We've all known for a long time that houses here are among the cheapest in the country, so this isn't exactly new:
What's the big difference between Indianapolis and Columbus?
Try $30,000.
That's how much lower the median price of a house in central Indiana is compared with one in central Ohio.
At a median price of $120,000, homes in the nine-county Indianapolis region are the most affordable of any metropolitan area in the country, according to a National Association of Home Builders study.
Central Ohio's median home price is $150,000.
When the association's researchers figured in median family incomes, central Ohio ranked as one of the least affordable regions in the Midwest. Only Milwaukee, Chicago and Minneapolis rated worse.
What's interesting about the story is even the real-estate experts quoted don't seem to know why Indiana housing is so affordable. More new homes on the market, driving the prices down? Belief that the local economy isn't so good? A culture that has come to expect low prices? Selling too many houses to people who can't afford them? (We also have one of the highest mortgage default rates in the nation.)
The low cost of home ownership isn't really the economic-development benefit it's sometimes touted to be, as in: Come to Indiana and get three times the home! If you're moving here from almost anywhere else, it's true that you can get a much nicer home. But it's such a lousy investment, wtih so little equity built up, that if you move from here to almost anywhere, you'll get much less of a home than you've come to expect.
Comments
Well, the secret to coming here from elsewhere is to trade up enough so that you're happy with your new home but also to put down enough so that you have high equity and low living expenses.
I honestly don't understand how lenders can make as many bad loans as they do here, allowing people to borrow 90 to 100 percent of the purchase price. I'm just guessing that it's another example of the corporation as many-headed Hydra, where the left hand doesn't know what the right is doing. I suspect brokers get incentives to sign as many deals as they can, irrespective of their quality.
I wanted to put down 75 to 80 percent on the house I'm living in, and that's just what I did. But not until after receiving a lot of discouragement from the lender, who wanted me to take out a huge mortgage. This goes against all logic. You'd think they'd be delighted to loan money at low risk, but evidently that's not the case. That's sure not how I'd want to run a business.
Lenders like to lend money - the more they lend the bigger the risk to the owner and the more chance the lender will get the house. The american dream, ...
home prices are a function of income, job growth and population growth, and inventory growth.
if there is an amount of building that equals the supply, the home prices are flat.
this is probably whats happening in Indiana which is why the prices are so cheap.
and lenders don't make money if they don't lend it out. thats why they don't need you to put more than 20% down to safeguard their interests. if you put down 75%, they have higher security but they don't really need it. and they can't charge you a higher interest rate!