It should come as no surprise that home prices are rising far faster than incomes in the Puget Sound area, meaning homes are becoming less affordable.
In Pierce County, that trend is especially marked. In the third quarter of this year, median home price surged by 11 percent to $271,000 compared with last year. However, the average weekly income increased by only 1.6 percent to $895 per week.
The information, compiled by ATTOM Data Solutions, compares the difference between historic home prices and wages. Homes are considered affordable based on the average wages needed to make monthly house payments on a median-priced home, including property taxes and insurance.
The data show Pierce County’s affordability dipped the most of any Puget Sound county when comparing historic median home prices and average wages.
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Thurston County fares a little better. The median home price increased 6 percent last year to $260,000, compared with a 2.2 percent wage hike, or $900 per week.
Still, outlying county home prices are a far cry from King County’s median home sale price in 2016’s third quarter of $460,000, the data show. King County’s median wages increased 4.7 percent to $1,456 per week.
In counties nationwide with more than 300,000 residents, King County’s wage growth was outpaced only by California’s San Mateo County — the San Francisco area — with $2,195 per week or a 6.2 percent increase.
King County’s affordability is relatively stable because of higher wage growth and a comparatively lower median home price increase compared to historic averages, ATTOM’s data shows.
But those seeking a bargain in counties outside of King face another cost if they work elsewhere: travel time.
“Seattle home prices correlate directly to commute times, and given the pervasive lack of transit infrastructure in our region, that means homes with reasonable access to the city are seeing aggressive price growth,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle housing market. “Affordability remains an issue in the region, and that is unlikely to change in the foreseeable future.”
Of all Washington, Oregon and Idaho counties in the report, only Skagit County, which includes Anacortes, Mount Vernon and Burlington, increased in affordability compared with its historic median home price and wage averages. Wages increased 5 percent and the median home price is $255,000.
Nationwide, affordability worsened in 63 percent of counties compared with a year ago, with St. Louis County in Missouri topping the chart with a 19 percent median home price increase and a 2.3 percent decline in average wages.