Housing Affordable... Or Maybe Not

The Washington Center for Real Estate Research at Washington State University recently released a study on housing affordability across our State, and the results were decidedly unsurprising. The Tacoma News-Tribune reports on the study in the classic "good news / bad news" style:

Pierce County scored 104 on WSU’s Housing Affordability Index, where 100 is the break-even point and higher scores mean buyers have more than enough income to buy a home. A score of 104 means a typical family has 104 percent of the income needed to buy an average home – 4 percent more than required.

In contrast, King County’s affordability score is 80.1, meaning the typical family there earns only about 80 percent of the income needed to own an average home. King County’s median home price – the midpoint of all sales – is $390,000.

Bear in mind, that's the good news—that the "typical" family in King County has 80 percent of the required income to buy a home. Then we get to the bad news:

“More troublesome is the inability to find affordable starter homes,” said Glenn Crellin, the research center’s director.

For the entire state, the first-time buyer affordability index for the fourth quarter stood at 55.8 percent, meaning those buyers on average have about half the needed income to buy a lower-priced home. The typical first-time buyer could afford the typical starter home in only three counties, all in Eastern Washington.

So basically, if you have a home already, you can sell it and cash in on its outrageous "value," therefore making another similarly inflated house "affordable." But if you're like me, and you don't have an overpriced asset lying around to help you out, you're pretty much out of luck. Like I said, what a decidedly unsurprising finding.

(Jack Keith, Tacoma News-Tribune, 02.16.2006)

Update: There's another slightly more in depth story over at the Seattle P-I.

Despite rising prices, higher mortgage rates, declining affordability and fears that a "housing bubble" may be about to burst, the number of homes sold in Washington continued to rise in the final quarter of last year, the Washington Center for Real Estate Research at Washington State University reported Wednesday.

But cold weather and high energy costs slowed the rate of growth to 2.9 percent in the final quarter, compared to the final quarter of 2004, the center said.

(Nicholas K. Geranios, Seattle P-I, 02.15.2006)