Muncie-Delaware Co. Home Prices Are Stable

I recently read an article in USA Today addressing the decline in home prices throughout the country. The article went on to say that in some areas, prices had gone up as much as 178% in the years since 2000 and have now fallen as much a 87%. They quantified the "housing bubble" as occurring when home prices began to exceed normal relationships to buyers' income and to the value of rents received. The authors surveyed the period between 1950 and 2000 and found that for most of that time, home prices, adjusted for inflation, averaged about 3 times the area income level and about 20 times the typical rental income. As ususal, however, the areas cited were CA, AZ, NV, FL and cities on the east coast.

In our area, the median family income from the 2000 census was around $35,000. Based on USA Todays' definition of normal, our median sale price should be $105,000, and a property renting for $900 per month or $10,800 per yr. should sell for $216,000. In actuality, our median sale price has been around $75,000 for many years and a nice property renting for $900 per month would typically sell for between $110,000 and $120,000.

This year in spite of a challenging market, our home prices are stable and actually have increased slightly from 2007. It proves once again that the Muncie area didn't experience the "bubble" and that even in good times we have much more affordable housing than most of the U.S. Coldwell Banker's annual study of cities which are home to a Div. 1A university, places Muncie 2nd in the nation in housing affordability.