When it comes to knowing your audience, real estate professionals must keep their fingers on the pulse of a number of economic trends, including the income of potential clients.
A recent report by CNBC offers a glimpse of these trends, with a review of how much the average middle class family earns in each state. According to a review by Pew Research Center, as the size of the middle class decreases, so does the median income it earns.
“Nationally, the median income of middle-income households decreased from $77,898 in 1999 to $72,919 in 2014, a loss of 6 percent. The income it takes to be middle-income varies by household size, with smaller households requiring less to support the same lifestyle as larger households.”
Here is a review of how much money a three-person middle-class family earns in in several regions of the country:
On the West Coast, the typical middle-class Californian family earns $73,197. Up the Pacific Coast in Washington, median household income for the middle class is $74,183. Oregon comes up at the bottom of the “left coast” states, at $71,971.
The old saying is, go West young man. When it comes to the middle class, it may be a little less profitable. In Arizona, the median household income of a middle class family is $71,895. In Texas, the mark is $72,542.
The CNBC report notes that there are a number of ways to define the “middle class, including education and occupation. However, median household income can be a useful tool for grouping people in a particular cohort, and it also can provide a useful data point for real estate professionals to consider.
In the Heartland, the average middle class family in Michigan earns $73,248 a year. In neighboring Ohio, it is a few dollars more, at $73,458. Indiana’s median income for middle class families is $72,352. Illinois checks in at a median income of $74,257.
Cost-of-living expenses also must be considered. Take the South, where expenses can vary within the same state.
In Florida, median household income for a middle-class family is $70,124. Alabama, known as “the heart of Dixie,” checks in at $71,781, and Georgia is at $72,845. In the Carolinas, North Carolina is at $72,342, while median middle-class income in South Carolina is $72,752.
In the Northeast, the median middle-class household in New York earns an average of $73,227. In New Jersey, the bar is set at $75,768. Massachusetts is near the top of the scale at $77,965.
In the Rockies, the median household income is $74,364. In Utah, the mark is set at $71,367.
Living outside of the “lower 48” also has an impact. The median household income for a middle class family living in Alaska is $80,230. In the paradise of Hawaii, it is $74,529.
Knowing current income trends can help savvy real estate professionals know the market and know where demand will be, particularly in a tight market.