Grant County tops in housing affordability
Results mean good selection of homes in area
GRANT COUNTY — Thanks to what a real estate research director calls surprisingly low median home prices, the county tops the Northwest Multiple Listing Service in housing affordability.
"The prices are lower than in many parts of the state, even though the incomes are fairly average," explained Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.
"What it really means is that a potential home buyer in Grant County, at or near median income, can go out into the marketplace and really have a good selection of homes that they can afford to purchase," he continued. "They can match their needs in the marketplace fairly well. In places like King County, where the housing affordability index is substantially below 100, a middle income family is really hard-pressed to find a home they can afford, and are going to be in a situation where they have to jump at the first thing they see in their price range, for fear someone else is going to get to it first."
Crellin developed a housing affordability index in the state to gauge the effect on buyers.
"What we do is use the housing affordability index to measure the degree to which a typical, i.e. median income family (is able to) afford the typical home in that county," he explained.
Okanagan and Grant counties are the only communities east of the mountains to participate in the Northwest Multiple Listing Service, Crellin said.
"Clearly, eastern Washington has much more affordable housing than they do west of the Cascades," he said.
He added Okanagan County has a median selling price within $200 of the median selling price of Grant County.
"The difference here is in incomes," Crellin said, noting that in Okanagan the median family was $38,399. Third quarter data — the most recent information accessible for the center, indicated a median sales price in Grant County of $119, 800, and a median family income of $44,918, Crellin added.
Crellin acquires statistics on family incomes from consulting firm Claritas, which produces income estimates for every county in the United States, including household and family incomes. The housing affordability index relies on the median family income, he said.
Price data comes from the listing services for those counties in the Northwest Multiple Listing Service. For those areas not listed in the service, Crellin said he uses other multiple listing services and people who monitor deed recordings.
Another item factoring in the housing affordability index is the mortgage interest rate, produced by the Federal Housing Finance Board, which Crellin said uses one rate for all parts of the state.
The index then assumes a median income family purchases a median price home with a 20 percent down payment and 30-year mortgage rates, in a blend of fixed and adjustable rates, Crellin said, at prevailing rates, with the presumption that the family can spend one quarter of their income covering the principle and interest payment. It allows Crellin to come up with a qualifying income and divide the median family income by the qualifying income, resulting in the income, he said.
"How it's going to have an effect on us is people will continue to buy and sell property," said Amy Kirwan, president of the Moses Lake-Othello Association of Realtors, of Grant County's placing. "Realtors will see an increase in productivity because we'll continue to see buyers buying and sellers selling."
As far as what's selling in Grant County, Kirwan said there's a lot of new construction, first-time home buyers and continued low and affordable interest rates.
"Therefore, we continue to see a lot of people investing in real estate," she said.