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Valley home prices hard to bear

Northern San Joaquin Valley home prices have plummeted, but they haven't fallen enough to become affordable for most wage earners, a new study shows.

Home buyers must earn about $98,000 a year to comfortably afford a median-priced house in Stanislaus County, the Center for Housing Policy reports.

But workers in only one of the 64 occupations studied -- construction managers -- earned that much last year.

Even two-income couples with good jobs -- such as accountants, police officers, school teachers and firefighters -- barely can cover ownership costs, the report showed.

The findings were about the same for San Joaquin and Merced counties.

The study, "Paycheck to Paycheck: Wages and the Cost of Housing in America," was released today. It compared housing costs in 201 U.S. metropolitan areas with wages earned in 2007 by workers in assorted occupations. Professionals like doctors, lawyers and business executives were not included.

Registered nurses were included, but even their relatively high wages weren't high enough to purchase a median-priced home in more than half of the communities studied.

The Center for Housing Policy is the research affiliate of the National Housing Conference. Its study is published online in an interactive database.

In calculating what's affordable, the study assumed not more than 28 percent of household income should pay the mortgage, property taxes and insurance. It also assumed buyers had a 10 percent down payment with a conventional loan.

It based its calculations on third-quarter 2007 home sales data. Median-priced homes then sold for $300,000 in Stanislaus, $348,000 in San Joaquin, $278,000 in Merced and $239,000 nationwide.

Among the country's bargain-priced communities is Springfield, Ohio, where the median-priced house sold for $88,000. Buyers there only had to earn $28,748 per year to afford a home.

In Springfield, most workers can buy, including fast food cooks, secretaries, construction laborers, dental assistants, and groundskeepers.

In San Francisco, by contrast, virtually no wage earners can afford a home. Since median-priced houses sold for $770,000, buyers there must earn more than $250,000 a year to comfortably purchase.

Houses weren't always hard to afford.

Anita Hellam, executive director of Habitat for Humanity for Stanislaus County, remembers during the mid-90s "when the majority of the working families living in Modesto were able to find affordable housing."

But Northern San Joaquin Valley home prices nearly tripled from 1996 to 2005, pushing ownership out of reach for many residents.

Even though valley home prices fell about 25 percent during the last year, Hellam said more people than ever are seeking Habitat for Humanity's help to acquire their first home.

"At least half of our households have two parents working," Hellam said of those who get into Habitat's building program. She said working families who might have been able to buy a house with a subprime mortgage a few years ago "now don't even have that option because of the reduction of subprime loans."

So even though home prices have fallen, Hellam said, families "don't feel any more hopeful about getting into a house now than they did before."

To meet that housing need, Hellam said, her organization plans to build and rehabilitate a record number of homes in Stanislaus County this year.

A record number of would-be home buyers also are taking steps to learn about responsible home financing, according to Jennifer Root, spokes- woman for ByDesign Financial Solutions.

Root said her counseling agency is booked up for its home buyers workshop this Saturday in Stockton. The free program, funded through the U.S. Department of Housing and Urban Development, hadn't attracted many participants the past several months, but interest is growing.

"That's a sign that people definitely are looking at buying homes," said Root, noting that another daylong workshop is scheduled for March 8.

For information about ByDesign Financial Solutions workshops, call 800-750-2227 or go online to www.ByDesignSolutions.org.

For information about Habitat for Humanity homes, call 209-575-4585, ext. 100, or go online at www.stanislaushabitat.org.

To find the "Paycheck to Paycheck" study's interactive database, go to www.nhc.org.Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.

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