The latest numbers on county-wide housing affordability reveal something of an upward trend -- in prices, that is, not affordability. According to the Humboldt Association of Realtors, which compiles these figures, the median price of Humboldt County homes sold in May (these things take a while to compile, apparently) rose for the third straight month.
The increase corresponds with a decrease in mortgage rates -- likely not a coincidence. In fact, the low, low countywide average mortgage rate of 4.95 percent is the lowest on the HAR charts, which go back to January of '99. The median price of homes sold in May was $285,000 -- up from $274,900 in April and $264,950 in March.
What to make of this trend? Hard to say. It could be that the H.C. housing market has bottomed out. If so, aspiring first-time buyers, now's the time to jump in (as any realtor will no doubt tell you). On the other hand, there are still signs that prices haven't fallen as far as they probably should.
Here's what I mean: Economists, financial planners and wise parents will advise you that your home payment probably shouldn't exceed a third of your income. That's the de facto rule of thumb. Currently, the average-salaried Humboldter purchasing the averaged-priced home would have to pony up 44 percent of each paycheck to cover her mortgage. Compare that to just 29 percent a decade ago. This is how foreclosures happen, or would be if this hypothetical applicant could secure a loan. Chances are, she couldn't.
Another way to look at market health is through the affordability index, which measures whether a median-income family can qualify for a mortgage on a typical home. Currently, the index figure is at 21 percent here in Humboldt County, meaning that your typical H.C. family makes only 21 percent of the income necessary to qualify for a conventional loan -- assuming a 20 percent down payment -- on a median-priced existing single-family home . Which is to say, forget it, typical family. It's way beyond your reach.
During the housing bubble, that figure bottomed out at 10 percent. Ten years ago it was almost 50. If you're of the opinion that more people should be able to afford to buy a home, prices have a ways to fall yet. Here's another indicator that they might: The total number of homes sold in Humboldt County through the first two quarters of this year -- 373 -- is the lowest of the decade by far. (Almost 700 sold in the first half of 2004, for example.)
A couple quick notes on individual markets: Arcata, as you would predict, remains the toughest place to afford a house, with a median price of $447,250 and a butt-ugly affordability index of just eight percent.
Which city has the cheapest homes? Eureka, with a median price of $266,000 and an affordability index of 22 percent. On behalf of those subsisting below the median wage, allow me to observe, that ain't chicken scratch.