San Francisco-based home-exchange network, Trulia, quantified exploding home prices in U.S. cities, and it doesn’t look good for U.S. residents. Trulia’s report spelled out the extreme burden facing millions of middle-class and young people seeking employment in places with actual jobs.
“Since the Great Recession officially ended in the US in late-2009, the road to recovery of the job and housing markets has been slow, but steady. Of course, not all parts of the country have experienced the same degree of recovery,” the report states, while explaining that the difference between some of the largest metro areas and rural America “is especially stark.”
Job growth in six metro areas is particularly strong, including cities like Seattle, with 12.4 percent job growth, and San Francisco, with 15.3 percent growth. San Jose is roided-up with 14.5 percent employment growth, and Las Vegas has 14.2 percent growth. Many of these cities of gold are out of the reach of the common American family with a low-wage income, however. Prosperous San Jose, for example, has experienced a home value appreciation of 133.7 percent since 2012, while Las Vegas—once the site of the nation’s more devastating housing busts in the aftermath of the 2008 recession—has endured a 114.2 percent home value appreciation.
The 2008 housing crisis intensified the incentive to abandon rural areas for larger employment centers, possibly because of the faltering recovery of manufacturing and agricultural jobs, spurred in part by automation and outsourcing. While professional and nonprofessional service jobs are on the rise, they stick mostly to large metro areas, where growth-fueled housing demand is waiting to bushwhack rural refugees with oppressive housing costs.
Housing remains affordable in places with low economic growth, which creates a rift between home and city prices that is nearly impassable for impoverished rural residents looking to make the big move to an urban setting with more jobs. The economic split helps lock rural residents down to their location, ensuring that they will never be able to move to an area with a livable wage and become independent of government aid. Overall, the trend makes Americans less mobile, potentially cursing multiple generations of family members to a life of stagnation in a dying community.
Jason Webb is a training specialist at Portland-based Grounded Solutions Network, an organization that educates groups looking to circumvent sky-high home prices through the creation of community land trusts and other techniques. Webb explained that moving to a better area is nigh impossible if you’re having to shell out $300,000 for a modest two-bedroom ranch-style on Walmart wages.
“These families are out in the rural area, not necessarily close to anything and trying to make ends meet, and unfortunately not having the resources to take their family and move them to a place with more opportunities,” said Webb.
Most families that actually manage the move, he said, tend to stuff an inordinate number of family members—cousins, aunts, nephews and parents—under one roof to manage the unreasonable mortgage.
He added that the rising cost of home-building could get considerably worse as the U.S. insists on engaging in a new trade war that increases the cost of building materials.
“Any alleged tax benefit that we’re supposed to receive (from the recent federal tax cuts) will be swallowed up because our federal government feels that taxing our importers is the way to go,” said Webb. “We’re starting to see homes that should be selling for $200,000 going up another $100,000, just because the wood is a lot more expensive and the metal is a lot more expensive.”