Are the Good Times really over for good? Homeowners need nearly 40% or more income to buy in Nashville, than last year.

By Bethany Blankley | The Center Square,  May 14, 2022  – Demand for homes in certain areas of the country has caused supply to dwindle, prices to skyrocket and buyers needing nearly 50% more income than they would have last year to even enter top markets, according to a report by the real estate brokerage firm, Redfin.

“Housing is significantly less affordable than it was a year ago because the surge in housing costs has far outpaced the increase in wages, meaning many Americans are now priced out of homeownership,” Redfin Deputy Chief Economist Taylor Marr said.

Because more people are working remotely and can live anywhere to work, many are flocking to cities in the Sun Belt, with the most popular destinations being Tampa, Phoenix and Las Vegas. They are also the most expensive, with potential homeowners needing more than 40% more in income than they did last year to buy.

Buyers are flocking to the Sun Belt “partly because they’re relatively affordable compared to pricey coastal job centers, but the resulting rise in home prices may make them less popular in the future,” the analysis found.

Tampa has quickly become the least affordable market, with homebuyers needing 47.8% more income than they did a year ago, more than in any other metro area in the U.S., the report found.

Home buyers in Tampa would need to earn $67,353 annually to afford a monthly mortgage payment of $1,684. Last year, they needed to earn $45,562. Most workers don’t make a $21,791 increase in their salary in one year, let alone in a decade. That means many who might have been able to afford to buy last year have been priced out. But those who can are buying with the median sale price hovering at $363,750.

Phoenix home buyers need to earn $87,026, an increase of 45.7% from the previous year, to afford a monthly mortgage payment of $2,176 in the area. The median sale price is $470,000.

Las Vegas buyers need to earn $79,620, up 45.6% from a year ago, to afford a monthly payment of $1,990. The median sale price is $430,000.

Homeowners need nearly 40% or more income to buy in Orlando and Jacksonville, Florida, in Austin, Fort Worth and Dallas, Texas, in Anaheim and San Diego, California, and in the metro areas of Nashville, Atlanta and Charlotte, North Carolina.

Redfin analyzed median home sale prices between March 2021 and March 2022. It focuses on affordability based on buyers taking out loans, not paying cash. It defines a monthly mortgage payment to be one that is no more than 30% of a homebuyer’s income.

Nationwide, Americans are migrating despite high costs, or because of them. A seller leaving New York with a median home sale price of $677,654, for example, is more likely to afford purchasing a home in Las Vegas or in Tampa even if the homes are overvalued there because they are far less expensive than in New York. Likewise, the cost of living is less, and Nevada and Florida levy no state income tax.

A record 32.3% of Redfin.com users nationwide looked to relocate to a different metro area in the first quarter of this year, a separate Redfin analysis found. That’s up from 31.5% a year earlier, and up 26% from 2019.

“Skyrocketing home prices and rising mortgage rates have made relocating to a more affordable area the only viable option for some prospective homebuyers,” the report notes.

Nationwide, homebuyers need to earn $76,414 annually to afford a monthly mortgage payment of $1,910, an increase of 34.2% from the previous year. The national median home sale is $412,687, a 17.3% increase from last year.

While housing costs skyrocket, wages are increasing but not at near the same pace. The average hourly wages in the U.S. grew by 5.6% last year, according to Bureau of Labor Statistics data. Over the last decade, median home prices increased by roughly 30% while household incomes increased by 11% over the same time period, a Bankrate analysis found.

From 2019 to 2021, “the average house-price-to-income ratio increased from 4.7 to 5.4 — a 14.9% increase and more than double the recommended ratio of 2.6. In other words, homes cost 5.4X what the average person earns in one year,” an analysis by Clever Real Estate found. It also notes that since 1965, after accounting for inflation, home prices increased by 118% while household incomes increased by only 15%.

As home prices outpace wages, inventory continues to decline. An analysis by the National Associations of Realtors and Realtor.com points out that a household earning $75,000 to $100,000 can afford to buy 51% of the active housing inventory today compared to being able to purchase 58% of the homes for sale in 2019.

One possible course correction could come from the Federal Reserve raising interest rates, and thereby mortgage rates. Marr notes, “The good news is that there’s a positive side to rising mortgage rates, too: They will likely slow price growth and curb competition for homes, providing a reprieve for some prospective buyers.”

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Tennessee Supreme Court rules in favor of education savings account program

By Jon Styf | The Center Square, May 18, 2022 - Tennessee's Supreme Court ruled on Wednesday that an education savings account program passed by the General Assembly in 2019 was constitutional.

The program, which would have started in Nashville and Shelby County, had been challenged based upon the state's Home Rule Amendment. The court did state, however, that the two areas do have standing to challenge the program.

The case will return to the trial court for a ruling on its legality outside of the Home Rule Amendment.

"Every child deserves a high-quality education & today's Tennessee Supreme Court opinion on ESAs puts parents in Memphis & Nashville one step closer to finding the best educational fit for their children," Tennessee Gov. Bill Lee tweeted in response to the opinion.

The program was aimed at allowing low-income students in low-performing schools in Davidson and Shelby counties to use vouchers to attend a school of their choice. Those students were set to receive approximately $7,000 to choose their school even though, at that point, schools in Shelby County spent $13,000 per student each year and Nashville schools spent $16,000 per student.

The new Tennessee Investment in Student Achievement passed the Legislature at the end of this year's session and later signed into law by Lee will replace the previous school funding formula, the Basic Education Program.

The Senate Democratic Caucus blasted the decision in a statement. 

"Private school vouchers, paid for with public school tax dollars, do not work and this scheme has failed students every place it has been tried," the statement said. "In this decision, the Supreme Court erased constitutional protections for local control and years of precedent.

"Not only does this decision usher in a terrible education policy, but it invites more political meddling that surely results in local governments losing freedom and independence from state interference."

Tennessee Attorney General Herbert Slatery said in a statement while there were still more court proceedings ahead, the court's decision was a "major step forward."

"The Education Savings Account program has always been about helping Tennessee students — giving eligible families a choice in education, an opportunity they currently do not have," Slatery said. "It challenged the status quo — a move that is always met with resistance. We applaud the Court’s decision that this pilot program is indeed constitutional."

The nonprofit Beacon Center of Tennessee also hailed the decision, which joined the lawsuit along with the Institute for Justice to represent parents. 

"We are so pleased that the Tennessee Supreme Court affirmed today what we have always known: The ESA law is not a violation of the Tennessee Constitution’s Home Rule Amendment," said Beacon Center President and CEO Justin Owen. "We are fully confident after this decision that families in Nashville and Memphis will finally get the choice opportunities that they deserve."

The lawsuit from the governments of the two counties alleged that the two areas were targeted without their consent, which the lawsuit claimed violated the state's Home Rule Amendment.

A Court of Appeals previously ruled against the ESA program before the state appealed that ruling to the Tennessee Supreme Cour 

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Titans CEO says Nashville would owe nearly $2B toward Nissan Stadium renovations under current lease

By Jon Styf | The Center Square, May 19, 2022 — Tennessee Titans Chief Executive Officer Burke Nihill estimated that Nashville would owe $1.839 billion under the terms of the team's current lease if Nissan Stadium in Nashville was renovated instead of having a new stadium built.

The estimate is based upon maintenance and a lease stipulation saying the city must pay for capital projects to keep the stadium in "first-class condition to keep pace with comparable facilities."

The Titans, state and Nashville are preparing to fund a new estimated $2.2 billion stadium next to the current stadium with plans to build a mixed-use development on 130 acres next to the new stadium.

Nihill also confirmed that Titans ownership was preparing to be able to pay $700 million in private investment toward a new stadium between ownership, an NFL loan and other private investments. That would leave an estimated $1.5 billion of a new stadium to be paid with public funds, including a $500 million appropriation from the state and $1 billion in sales taxes from the city and state.

Nihill said that he prepared the Nashville-paid renovation estimate "in as objective a way as possible" figuring in $945 million for near-term stadium renovations and $894 million for maintenance and upgrades between 2026 and 2039 if the Titans were to use their option to renew the Nissan Stadium lease. A new lease would leave the Titans in charge of paying for stadium maintenance after the initial costs.

"What we have been trying to do is take the taxpayers in Nashville out of that risk position," Nihill said at Thursday morning's Metro Nashville Sports Authority Finance Committee meeting.

"This is something that our ownership and our leadership just doesn't accept. And so, we're kind of like ducks swimming out of water like crazy trying to find an elegant solution to find a result where there's a long-term lease where, whatever the risk is, it's on the Titans and not the taxpayers."

Nashville councilmember at-large Bob Mendes, however, believes that Nashville should do its own analysis of city obligations for renovations under the current stadium lease before making a funding decision. A 2017 city-funded analysis estimated that Nissan Stadium required $293.2 million in capital improvements over 20 years.

"Listen, we can all love the Titans & still understand they are a counterparty in a 10 figure negotiation," Mendes tweeted. "If Metro doesn't have its own analysis of the lease obligation, then the only salient point is that Metro doesn't have its own analysis. There's really no excuse for that.

"A core concept in a negotiation is to know your walk away point. If Metro has no independent thoughts about the lease obligations, then it doesn't know when it should walk away. It's hard to have confidence in a negotiator who relies on the other side for the walk away point."

TJ Ducklo, the Chief Communications Officer and advisor to Nashville Mayor John Cooper, said in a statement that the mayor's priority is to remove the tax burden on Nashville residents under the current stadium lease and that the terms of the lease would require the Metro government to spend hundreds of millions of dollars to renovate the existing stadium and maintain it over the remainder of the lease.

"We have no plans to commission another study to tell us what we already know: Renovating the stadium would cost Nashvillians hundreds of millions of dollars," Ducklo said. 

Nihill said that the 2017 assessment was a different scope than what the team believes is required of Nashville under the Titans' current lease. Nihill said the city must keep the stadium comparable to other NFL stadiums built between 1989 and 2009, including Miami's renovated Hard Rock Stadium, FedEx Field in Maryland, Bank of America Stadium in Charlotte and Paul Brown Stadium in Cincinnati.

Nihill said the last three will likely be renovated or replaced before 2039. He said that 30 stadiums in the U.S. fit the comparable facility definition.

Economist J.C. Bradbury of Kennesaw State University in Georgia believes the city could challenge the first-class stipulation.

"The notion that first class is some objective standard that Nissan can't come close to meeting with more modest changes is an important aspect here," Bradbury tweeted. "Municipal leaders could clearly push back on this and win in court."

Nihill said Thursday that the team estimated a new stadium would cost between $1.9 billion and $2.2 billion, though Cooper's capital estimate for the facility was recently $2.2 billion.

Taxes that will contribute to the estimated final $1 billion in stadium funding including state and city sales taxes from spending within the stadium and 50% of the state and city sales taxes for spending in the new development district the Titans plan to build around the stadium.

The funding will also include a new 1% hotel tax on all Davidson County hotels and motels.

Bradbury has explained that sending funds that Nashville and Tennessee normally would take in to pay for city and state funded work and giving $1.5 billion in public funds for a new Titans stadium is the same as committing general fund dollars, because those same taxes are the current source of plenty of general fund dollars.

"It's a misnomer to say that it's not raising taxes on locals because what you're doing is transferring commerce that was already taking place in Nashville that was generating sales tax revenue for the city and state and then diverting that to the Titans," Bradbury said. "So that's revenue that was previously going to funding other priorities for government that now has to be made up through other means."

Nihill confirmed that Titans ownership, the Adams family, is currently collecting assets in order to pay for the team portion of funding for a new stadium.

"The Adams family is quite literally just putting all of the Adams' assets in the mix," Nihill said. "Things that the family has owned for 50-60 years. They're being sold, they're being liquidated to be able to help pay for this contribution." 

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New Titans stadium estimated to cost $2B, will not burden Metro’s General Fund,

Mayor Cooper: Nashville’s football stadium will not be taxpayer burden under new plan Opinion

Rather than pouring over a billion dollars into an aging stadium, we began working with the Titans and the state on the idea of building a new enclosed stadium for Nashville.

John Cooper, Guest Columnist, The Tennessean, May 12,2022- We are working on plans for a new stadium because doing nothing is not an option, and renovating the current stadium would be financially irresponsible. Tourists and spending around the stadium will pay for this project, not Nashville families.

Doing nothing Is not an option  ... Right now, under the original lease, Nashville taxpayers are on the hook for tens of millions of dollars per year for stadium maintenance and improvements. Those are general fund dollars that we need for other essential priorities... The lease obligates Nashville to provide a “first-class” stadium until 2038, an obligation that now means either renovating the current stadium or building a new stadium. ... – unlike our current arrangement – will not burden Metro’s General Fund. (link)

Rod's Comment: Based on what I know about this proposal at this time, given the current funding package, I am in favor of building the new stadium. 

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link

As the author of A Disgruntled Republican I often post items that I think may be of interest to the conservative, Republican, libertarian, or the greater community. Posting of a press release or an announcement of an event does not necessarily indicate an endorsement. Rod

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Yes, the Biden administration did fund crack pipes

 The latest media ‘fact check’ turns out to be false

by: Grace Curley, Spectator, May 16, 2022- Nina Jankowicz, who has her own lengthy rap sheet as a serial spreader of fake news, is heading up the Department of Homeland Security’s new “Disinformation Governance Board.” If the director of the Ministry of Truth really wants to tackle lies, I have the perfect place for her to start: the White House Briefing Room.

Former White House press secretary Jen Psaki was caught flat-out lying on Thursday .... In February of this year, Washington Free Beacon reporter Patrick Hauf wrote a piece headlined, “Biden Admin To Fund Crack Pipe Distribution To Advance ‘Racial Equity.’” ... HHS put out a statement totally denying the report: ... It turns out that these safe-smoking kits do include crack pipes after all.(read it all at this link)

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Bastiat Society to host a Nashville in-person event with Daniel J. Smith. Are Markets Moral?

AIER’s Bastiat Society program in Nashville will host an in-person event with Daniel J. Smith

About this event

AIER’s Bastiat Society program in Nashville will host an in-person event with Daniel J. Smith, Director of the Political Economy Research Institute and Professor of Economics in the Jones College of Business at Middle Tennessee State University.

Even the harshest critics of market societies begrudgingly recognize the efficiency of markets in generating unprecedented material abundance. Rather, modern critics argue that markets lead to unjust distributions of wealth by encouraging immoral behavior. In this talk, Smith argues that markets aren’t just more efficient; they are also moral and moralizing. The least-off in society are the primary beneficiaries of market institutions. By encouraging the adoption of commercial virtues, markets also foster morality and tolerance.

Daniel J. Smith is the Director of the Political Economy Research Institute and Professor of Economics in the Jones College of Business at Middle Tennessee State University. He serves as the North American Co-editor of The Review of Austrian Economics and is the President of the Society for Development of Austrian Economics. His academic research and policy work uses Austrian and public choice economics to analyze private and public governance institutions. While his primary research areas are on monetary institutions and public pensions, he has also done fieldwork following natural disasters and even examined the governance institutions of brawling soccer hooligans, cyclists in the Tour de France, and the patricians of historic Venice. Other academic and policy research he has undertaken examines the effects of occupational licensing, payday lending regulation, and the morality of markets.

He is the co-author of Money and the Rule of Law: Generality and Predictability in Monetary Institutions (Cambridge University Press), written with Peter J. Boettke and Alexander W. Salter, and The Political Economy of Public Pensions (Cambridge University Press), written with Eileen Norcross. His research is published in academic journals, such as Public Choice, Economics of Governance, Constitutional Political Economy, and The Review of Austrian Economics, and in chapters in books published by Oxford University Press, Routledge, and Wiley-Blackwell. Smith has published numerous op-eds in national and regional outlets, including in the Wall Street Journal, The Hill, Investor's Business Daily, and CNBC.com. Daniel received his M.A. and Ph.D. in economics from George Mason University and a B.B.A. in economics and finance from Northwood University.

 Eventbrite Ticket Required.

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