Mar
12
Blog Post #7: Are We Really “Recovering?”
March 12, 2015 | Leave a Comment
In Queens, my family owns a house. We’ve been living in the same house for over a decade and never really considered moving out. However, I have noticed that more and more of our neighbors are putting up their houses for sale and, when asked, said they were moving into apartments because they could not afford to pay the mortgage. Always having lived in a house rather than an apartment, I never realized that so few families own their own homes in New York. The article mentions that only 31.7% of all New Yorkers own homes. This city has a fairly dense community but that statistics is surprising in the sense that I always believed the majority of people living in boroughs outside of Manhattan would be homeowners rather than apartment renters.
The article also gives statistics showing that the real estate market has been steadily recovering since the crash in 2008. Single family and two-to-four family home prices have been slowly appreciating, albeit modest growth. Rental apartment buildings with at least 5 units saw a price jump of 18.4% between 2012 and 2013 while condominium units experienced price hikes of 11.2%. Additionally, over 37,000 properties were sold in 2013, a rise from the amount in 2012.
Despite the steady recovery in the real estate market, I was surprised to read that rent expense burdens increased over the past few years. More than half of rental household residents were burdened by their rents in 2012. More than half of them are severely burdened, meaning that over a quarter of New York City rental households are using more than half their paychecks to cover rent expenses. That is absurd, considering how many suburban houses are cheaper than the apartments in the city and offer more space. I’ve always asked my cousins why they pay over $3,000 a month to rent an apartment in the city that’s barely the size of my house’s first floor while I am paying slightly more for a basement, first floor, second floor, and attic.
On the flip side, the article also provides good news concerning the falling unemployment rate and labor force participation rate. Since 2012, we have been seeing decreasing unemployment rates of 1%. This rate of decrease, however, is not up to par with the falling unemployment rate of the United States of 2.2%. The percentage of civilian working age individuals participating in the job market, either being employed or unemployed but seeking employment, has also increased. Between 2010 and 2012, New York’s labor force participation rate has risen to its 2008 levels, which is a good sign that people are more optimistic about employment opportunities.
Despite these positive statistics, if we look at the reports talking about the rate rent levels are hiking versus the rate income levels are “rising,” we still see that the disparity is ever-growing. Household incomes have dropped significantly after 2008. Between 2008 and 2011, the median household income plummeted $10,000. The median gross rent, on the other hand, increased by approximately the same amount. I find this aspect quite ironic as we, in the United States, are supposed to be in our “recovery” stage. However, the data tells a much starker story of the situation we are currently facing.
-Amy (SiJia) You
