Despite rising concern about housing costs in the Columbus area, several new reports say that central Ohio remains one of the most affordable places in the country to buy a house.
The studies base that conclusion on two factors: central Ohio home prices and income. Home prices have risen faster than wages in the Columbus area but are far more in sync here than elsewhere in the country.
“The fact is that judging by home values versus income, Columbus is pretty affordable,” said Cheryl Young, a senior economist at the real estate service Trulia, which concluded that Columbus is the second-most-affordable city for buyers.
“Places that are affordable and have earning potential like Columbus are more healthy housing markets,” she added. “We don’t see a huge imbalance where people can’t buy homes.”
Two of the studies, by the listing service RealtyHop and financial website SmartAsset, rely on a straight calculation based on median home price and household income to determine affordability.
RealtyHop determined that a typical Columbus home consumes 22.4% of a typical household’s income, the seventh-lowest among the nation’s largest 100 cities. Homes are generally considered affordable if the monthly cost — including mortgage and property taxes — requires less than 30% of household income.
The most affordable city is Detroit, where a typical home can be bought for 13% of income, according to RealtyHop. The least affordable: Los Angeles, where a typical home requires 94% of income.
SmartAsset used a similar method to conclude that central Ohio is the 22nd-most-affordable metro area. The website also determined that Detroit is the nation’s most affordable city.
Trulia took a slightly different approach to determine that central Ohio is the second-most-affordable community. The service uses home-value estimates and income to determine what neighborhoods (defined by ZIP codes) are affordable. Trulia found that in 19.1% of central Ohio ZIP codes, all homes would be affordable to buyers making the median central Ohio household income of about $64,000.
The least affordable central Ohio ZIP code was 43021 in the Galena area, where 24.1% of homes were affordable.
Only Pittsburgh included more affordable neighborhoods, with 22.5% of ZIP codes affordable, according to Trulia.
California cities had the lowest share of affordable neighborhoods, led by San Francisco, where 23.5% of neighborhoods have no homes that an average resident could afford.
Prices in those hyper-expensive coastal cities already are softening, in large part because of affordability, Young said.
“We’ve sort of hit that affordability ceiling where home-price growth has far outpaced wage growth,” she said. “Places that are relatively affordable speak to better health in the housing market. … In places like Columbus, we don’t see home values slowing.”
Finally, the real estate information service Attom Data Solutions found that Franklin County was among 127 counties (out of 480 studied) where those earning average pay could afford a median-price home.
Attom concluded that a typical Franklin County home would consume 27.4% of a typical county resident’s pay.
Tribune Content Agency