Housing Affordability Index – How Does Flagler County Stack Up?
Can a family with a median household income afford a median priced home in the local real estate market?
Palm Coast, FL – April 12, 2010 – Flagler County continues to grow although slowly. GoToby.com attributes the growth in part to the area’s attractive Housing Affordability Index (HAI). The HAI shows the relationship between an area’s median home selling price, median household income, and mortgage interest rate. Along with its great weather, proximity to beaches, trail system, and good schools, Flagler’s residential real estate is very affordable. A family with a median household income can afford a median priced home in the Palm Coast and Flagler housing market?
How is the index derived?
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Take the median home selling price
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Assume a 20% down payment
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Calculate the monthly Principal and Interest payment at the current mortgage interest rate
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Multiply the monthly P&I by four to find the minimum household qualifying income – assuming a 25% qualifying ratio
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Divide the median household income by the minimum qualifying income to derive the HAI
In Flagler County
In the first quarter of 2010, the median selling price for single-family residential homes in Flagler County was $130,000. Enterprise Flagler says the median household income is $50,104. With interest rates about 5%, Flagler’s HAI is in great shape.
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Median selling price = $130,000
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Down payment = $26,000
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The monthly principal and interest payment on a 30-year $104,000 loan at 5.0% is $558.29
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$558.29 times 4 (monthly qualifying income at 25% qualifying ratio) times 12 (to find annual qualifying family income = $26,798
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Divide $50,134 (median household income) by $26,798 (qualifying income) to derive the Housing Affordability Income = 1.87
This means that Flagler’s median household income is 87% above the minimum qualifying income needed to finance a $130,000 home. Look at a recent report from the National Association of Realtors® <CLICK> . You can see that Flagler is in line with the rest of the south.
HAI for Flagler County is Misleading
Due to the great disparity in types of properties in Flagler County and of incomes of residents, I believe that it would be better to know the HAI’s of the different major sections of Flagler County. Blending the totals is very misleading, as the Hammock’s per capita income is skewing the income numbers significantly higher and the significant number of available properties in Palm Coast and the other unincorporated sections of Flagler(with the exception of the Hammock) are skewing the property values lower, hence the better looking HAI for all of Flagler. Because of how Flagler is set-up, I believe that it’s HAI is the most misleading of any county in Florida!!!
Party like it’s 1999
Prince sang about the last year of the 1900’s, and that’s what we have here in Flagler 1999 prices. The forcasts calls for many more foreclosures in Flagler county, for 2010 bring us probably back to the last century pricing of 1996. The cost new however is still at todays prices, but as soon as you close on a new home, the price drops almost in half. From the 1990’s until 2005 prices went up faster than builders could estimate and charge for work, typicaly you had a value 10% over what builders charged. But the party is over, and it could well be five years before any appreciation happens to property values. A big employer would do the trick to boost prices, anything less than that won’t help.