Even casual followers of the local housing market are aware that prices have advanced strongly once again over the past year. Casey Jones, real estate agent at Coldwell Banker Evergreen Olympic Realty, Inc., offers an in-depth look into relative affordability in Thurston County.
In terms of Housing Price Index, the Olympia-Tumwater area experienced an 11 point gain in 2018, ranking 15th among 245 metropolitan areas tracked by the Federal Housing Finance Agency. As prices continue to rise, home affordability often begins to seem more and more out of reach. Home ownership may perhaps feel like an elusive dream for many, resulting in a sense of disappointment. In addition to buying a home, the cost of rental units is rapidly increasing as well, exacerbating affordability and resulting in an influx of homelessness.
A recent article in The News Tribune was titled, “Latest market reports won’t make you feel better when it comes to home prices, rents.” The article explains how although other counties in Washington State may be noticing some pricing slowdown in median closed home sales over the year, Thurston County is still one of the areas that has continued on an upward trajectory.
However, housing affordability is a function of not only prices, but also of homeowner income. What are housing prices relative to buyers’ income? How affordable is housing in Thurston County and how does it compare to other counties around the state?
To help answer these questions, the Housing Affordability Index (HAI) is one of the most useful comparative measures among counties. The HAI considers median home sales price, assumes a 20 percent down payment, 30-year term mortgage rates as well as median family income. “It is assumed that the lender would be willing to fund the loan so long as the principal and interest payments don’t exceed 25 percent of gross income. Index values above 100 indicate housing is affordable to the specified income group,” (The Washington Center for Real Estate Research, Washington State’s Housing Market Fourth Quarter 2018, p. 2).
The following information shows HAI, median prices and percent change over one year for Thurston County and other major counties nearby. In King County, the HAI was at 72.7, median home resale price $657,300 showing a 2.5 percent increase over 2017. Snohomish County came in with a 93.5 HAI, $473,200 median home resale price showing a 7.0 percent change. Pierce County’s HAI was 109.0, with $342,200 medcan price, up 8.4 percent. In contrast, Thurston County’s HAI was at 124.5 and the median home resale price was at $317,500 showing a 10.3 percent change.
As indicated by the HAI, Thurston County, relative to the other counties, is considerably more affordable, despite the large increase in prices throughout 2018. “Relative to counties further north along I-5 corridor,” explains Casey, “home buyers can find very good value in Thurston County.”
For those desiring a more rural style of living, Lewis and Mason Counties are also relatively more affordable. The HAI for Lewis County is 130.5, median home resale price at $227,000 with a 4.6 percent change, while Mason County posted a 120.8 HAI, offer $250,000 median home resale prices with a 11.5 percent change.
Affiliated with Coldwell Banker Evergreen Olympic Realty, the longest established, locally-owned real estate company in Olympia, Casey Jones proudly helps serve the entire county including Lacey, Tumwater, Yelm and many areas in the surrounding counties. Casey is a Certified Residential Specialist (CRS), among the top 3 percent of realtors nationally, as well as being in the top 10 percent of sales volume in Thurston County in 2016. With his many years of knowledge and expertise, Casey can help you understand current market trends and what your next steps in the real estate industry should be. If you’re interested in buying or selling a home or learning more about the HAI, give Casey Jones a call at 360-705-4449.