We’re back again today in the Daily Data Discussion post looking at the Housing Affordability Index; yesterday we looked at the markets around the country with the highest HAI values.  Today’s markets are indeed those with the lowest HAI values – the least affordable markets in terms of single family housing costs. 

Who is perhaps most interested in markets with very poor housing affordability (lower HAI scores)?  Multifamily investors are doing very well right now not only in emerging / recovering markets, but also in markets with very unaffordable single family housing.  This in fact may be one of the most simple but important paradigm shifts for multifamily investors to pay attention to; poorly affordable single family housing drives folks to the rental pool – plain and simple. 

Prolonged poor affordability measures in single family markets, coupled with highly constrained credit markets, puts many families back in rental housing, potentially for years to come. 

Fascinatingly, I received an email today offering the chance to participate in the “investment of a lifetime” - building single family homes in one of the five markets below with worst HAI values.  It pays to research your markets carefully. 

On a slightly different note, we’ve received a hoard of emails over the past twenty-four hours asking that we post some of the HAI background writing we’ve done in the recent past – that will be done over the next week or so. 

Here are the markets in our database as of today with the lowest Housing Affordability Index values –

1)  Biloxi, MS   63.8
2)  Burlington, VT  67.7
3)  Miami, FL   68.4
4)  Los Angeles, CA  71.4
5)  Riverside, CA  73.3

Database Average:  112.4
Database Median:  113.2

Tomorrow we’ll take a look at markets around the country with the highest Demographic subscores in our proprietary Multifamily Market Fundamentals Scoring system. 

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