01-22-08 1B Market Study - Laserfiche WebLink

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FOR-SALE MARKET ANAL YS1S ~ Based on the industry standard that a household can afford a home priced 3 to 3.5 times their income (excluding savings or debt that a household may have), a household would need an income of $43,000 to $50,000 to afford a average priced condo or townhome in 2007. It might be more realistic to factor in a price of $200,000 for a multifamily pur- chase. Based on this cost, a household would need an income of$57,000 - $66,000. Our data in Table 4 shows that, 51 % of the Market Area's households ages 25 to 34 (a prima- ry market for townhomes/condominiums) had incomes of$60,000 or more, as did 52% of households ages 55 to 74 (also a primary market for townhomes/condominiums). It should be noted that householders ages 55 and over also typically have equity in an exist- ing home and substantial savings that they can use toward the purchase of a new home. Current Supply of Homes on the Market Tables 16 and 17 show the number of single-family and multifamily homes, respectively, cur- rently listed for-sale in Arden Hills and the remainder of the Market Area distributed into six price ranges. The data was provided by the Multiple Listing Service (MLS). Key findings from our assessment of the actively listed homes in the Market Area are: ~ A total of 1,449 single-family homes were listed for-sale with the regional Multiple Listing Service in the Arden Hills Market area in December of2007. MLS listings generally ac- count for the majority of all residential sale listings in a given area. ~ About 24% of the single-family homes listed in both Arden Hills and the Remainder ofthe Market Area were priced between $200,000 and $300,000. A household would typically need an income of about $86,000 to afford a home priced at $300,000. About 39% of Arden Hills Market Area households have annual incomes at or above $86,000. Most ofthe remaining single-family homes currently listed for sale in the Market Area are priced above $300,000. ~ The average list price of single-family homes currently on the market in Arden Hills was $375,000. In the Remainder of the Arden Hills Market Area, the average list price was $337,225. In comparison, the average list price of multifamily units (townhomes and con- dominiums) was about $146,000 in Arden Hills and $203,000 in the remainder of the Mar- ket Area. ~ There were about 1,500 single-family homes listed for sale in the Market Area, and 680 multifamily units. Since multifamily homes have increased in popularity in recent decades, their share of the total listings (currently 31 %) will likely rise over time. Younger house- holds are often attracted to the afford ability compared to single-family homes and many older adults are moving to multifamily units for convenience. MAXFIELD RESEARCH INC. 39