Affordable Homes

Lake Oswego has a reputation for being a community of expensive, luxury homes. And, yes, those homes are abundant in Lake Oswego. But for the buyer looking for an affordable home, Lake Oswego should still be a consideration.

The RMLS has recently begun tracking affordability. What they are comparing is the median income of the metro area (currently $71,200) to the median sales price of the metro area (currently $215,000) and determining the percentage of the median income to make the house payment on the median house. In other words, if a buyer making the median income goes to qualify for a loan, he or she makes enough money to qualify for a house payment that is currently 166% of what the house payment would be if they purchased a home at the current median price. An index of 166 means that current median income can easily support the current median home price. Before the market turned, that purchasing percentage was just 88% (June of 2007). It’s pretty clear that our housing market in 2007 was extremely unaffordable for the average buyer. Today, it is much more affordable.

Affordablity Affordability
Index Index
Dec. 2010 166 Mar. 2007 95
Sept. 2010 155 Dec. 2006 105
June. 2010 148 Sept. 2006 101
Mar. 2010 145 June. 2006 97
Dec. 2009 141 Mar. 2006 107
Sept. 2009 140 Dec. 2005 113
June. 2009 30 Sept. 2005 121
Mar. 2009 138 June. 2005 129
Dec. 2008 125 Mar. 2005 133
Sept. 2008 109 Dec. 2004 144
June. 2008 98 Sept. 2004 149
Mar. 2008 103 June. 2004 140
Dec. 2007 99 Mar. 2004 162
Sept. 2007 94 Dec. 2003 152
June. 2007 88 Sept. 2003 149

How does Lake Oswego fit into this, with it’s million dollar mansions? Actually, pretty well. There are currently 71 properties for sale in Lake Oswego that are priced at $215,000 or less. The bulk of those are condominiums, but it is very possible to buy into Lake Oswego within the median household pricing.

Since beginning this blog I have on ocassion compared affordable housing in Lake Oswego to affordable housing in Sellwood, a popular neighborhood in Southeast Portland where I once lived. I have done this because the average consumer assumes Southeast Portland is affordable, just as they assume that Lake Oswego is not. The cost threshold I have used is $350,000. So, by my definition affordable is a home that costs $350,000 or less. I have not included condominiums or attached homes. Today in Lake Oswego there are 74 houses for sale priced at $350,000 or less. Sellwood has just 20.

The least expensive detached house currently for sale in Lake Oswego is priced at $159,000. It is a bank foreclosure. With 3 bedrooms, 2 baths, and a single car garage, it has 1625 square feet.

The least expensive detached house currently for sale in Sellwood is priced at $145,000. It is offered as a short sale. It has 2 bedrooms, 1 bathroom, no garage. It has 1078 square feet, 340 of which are in an unfinished basement.

Have a great week. If you’re in the local area, stay warm and enjoy the snow.