{"id":227,"date":"2006-05-14T16:17:00","date_gmt":"2006-05-14T23:17:00","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=227"},"modified":"2006-05-14T16:17:00","modified_gmt":"2006-05-14T23:17:00","slug":"affording-a-home-in-king-county","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2006\/05\/14\/affording-a-home-in-king-county\/","title":{"rendered":""Affording" A Home In King County"},"content":{"rendered":"

There’s an interesting pair of stories in today’s Seattle Times Real Estate section. The first article sings the praises of buying dumpy houses in crime-ridden neighborhoods<\/a>. (Okay maybe that’s an exaggeration.)<\/p>\n

Many first-time buyers swiftly learn that if they want to get into a home they’ll have to make accommodations.<\/p>\n

Although there are several types \u2014 buying with friends or others, thinking smaller, driving farther \u2014 the most popular are buying fixers and finding cheaper neighborhoods.<\/p><\/blockquote>\n

There’s a particularly interesting number given in the article:<\/p>\n

A household of four earning median income in King County can, conservatively, pay $327,180 for a home. But they won’t have many options on the single-family home front except along the King County line, said Elizabeth Grebenschikoff, a real-estate agent with Quorum Real Estate Laurelhurst in Seattle.<\/p><\/blockquote>\n

If you put 20% down ($65,436—tell me, who has that much?) on a $327,180 house, you’ll have a mortgage of $261,744. At an interest rate of 6%, the monthly payment on this mortgage would be about $1,570. The median household income in King County is $55,114<\/a>, or almost $4,600 per month. $1,570 is 34% of that. Again, I would like to point out that “the generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing.” (US Dept. of Housing & Urban Development<\/a>) So, I don’t know where Ms. Hodges pulls that $327,180 number from, or how she can consider it “conservative,” but whatever.<\/p>\n

The second article focuses primarily on numbers<\/a>, and leaves me confused as well.<\/p>\n

Using conservative lending estimates from the National Association of Realtors, a household would have to bring in $96,428 to buy that $405,000 home \u2014 and that’s with a 20 percent (or $81,000) down payment. With nothing down, make that $120,535.<\/p><\/blockquote>\n

Now we’re actually using the word “conservative” correctly. $96,428 per year is $8,035 per month. 30 percent of that is $2,410. Monthly payments on the $324,000 mortgage ($405,000-$81,000) would be just under $2,000. So by my calculations, that actually is a conservative estimate. The way I figure, you would “only” need to make $77,000 (and somehow have $81,000 in the bank) to afford the median home in King County. Again, whatever.<\/p>\n

While Seattle isn’t considered a “bubble” market, the median price of single-family homes in King County has been rising by double digits every year for several years \u2014 11.9 percent (from $362,000 to $405,000) from March 2005 to March 2006 alone.<\/p>\n

Median income in King County hasn’t risen as quickly as home prices. Last year, median income in King County was $77,900 for a family of four; $63,120 for a two-person household; and $55,230 for singles.<\/p><\/blockquote>\n

Okay on this one I’m going to have to call bull. The most recent figures that I’ve seen are from 2004, and as I said above, they put the “median household income” at $55,114<\/a>. How could the median household income be lower than even the median single income quoted above of $55,230? Furthermore, the most recent data<\/a> (again, 2004) on “median family income” for King County puts it at $71,814, not<\/i> $77,900. Either the author of this article has seen some new numbers that are quite a bit higher than the 2004 data, or they’re just making things up.<\/p>\n

Can anyone shed some light on this? Where are these numbers coming from?<\/p>\n

(Jane Hodges, Seattle Times<\/a>, 05.14.2006<\/i>)
(Jane Hodges, Seattle Times<\/a>, 05.14.2006<\/i>)<\/p>\n

\n
Seattle Bubble Tip Jar<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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