Agenda - Council Work Session - 11/24/2009

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FOR-SALE HOUSING MARKET CONDITIONS TABLE FS-2 DISTRffiUTlON OF SINGLE-FAMILY HOME SALES RAMSEY MARKET AREA 2005 & 2008 PMA SMA Price Ranlle No. of Homes %Ch. No. of Homes %Ch. No. of Homes %Ch. _~III':_ _~IlII:" _.tlln:.. $0 to $149,999 11 97 781.8% 13 249 1815.4% 24 346 1341.7% $150,000 to $199,999 125 214 71.2% 341 346 1.5% 466 560 20.2% $200,000 to $249,999 413 187 -54.7% 800 254 -68.3% 1213 441 -63.6% $250,000 to $299,999 201 85 -57.7% 278 95 -65.8% 479 180 -62.4% $300,000 to $349,999 111 46 -58.6% 124 54 -56.5% 235 100 -57.4% $350,000 to $399,999 61 21 -65.6% 52 36 -30.8% 113 57 -49.6% $400,000 to $499,999 36 19 -47.2% 52 26 -50.0% 88 45 -48.9% $500,000 + 22 11 -50.0% 20 8 -60.0% 42 19 -54.8% 980 680 -30.6% 1,680 1,068 -36.4% 2,660 1,748 -34.3% Sources: Northstar MLS; Maxfield Research Inc. · Because ofthe shift of home prices to more affordable price points, the gap between homeowner incomes and housing costs has narrowed. The median income in the Market Area was $62,800 in 2001 and the median single-family home was $169,900, or 2.7 times median income. By 2005, this figure increased to 3.3 times median income. Currently, the median household income is about $70,810, which brings the figure to its lowest (and hence most affordable) level since before 2001 (2.3 times income). A much greater per- centage of the housing stock is now affordable to modest or moderate income households who previously would were unable to afford a single-family home at the peak of the mar- ket. · However, the challenges in the current market associated with greater affordability in- clude tighter credit restrictions, more households unemployed, and insufficient down- payments, which continues to limit the number of households entering the owners mar- ket. Multifamilv Sales Activitv The following points summarize key findings on the for-sale multifamily market (Table FS-3 and Table FS-4): · Trends in the for-sale multifamily market closely mirror those in the single-family mar- ket. Total sales decreased from a peak of 882 homes in 2003 to 546 in 2008. Total sales of multifamily homes in 2009 are projected to be near the annual total for 2008. · The median resale price of multifamily homes increased from $129,800 in 2001 to $175,000 in 2006, followed by significant annual declines to $114,200 as of August 2009. Broadly applied, multifamily homes in the PMA are $33,000 more affordable' 2009 than they were in 2001, and those in the SMA are $13,400 more affordabl MAXFIELD RESEARCH INC.