Sonoma County 10th ‘least affordable' place in U.S.

Have you long suspected housing prices in Sonoma County are out of step with what the average resident can afford? Well, now it’s official – at least according to a new study released by real-estate firm RealtyTrac.

Sonoma is now one of the Top Ten least-affordable places to live in the entire country, according to RealtyTrac’s data.

Seven places in California occupied spots in the Top Ten nationally. The New York City borough of Brooklyn took the number one spot. Marin County came in second.

RealtyTrac examined home-sale price information in 417 counties across the United States and compared that information to average wage data from the Bureau of Labor Statistics.

To make the list, a region’s wages must not have kept pace with home appreciation. And the rule of thumb has traditionally been that no more than 30 percent of a household’s income should be spent on housing.

In Sonoma County, however, it would take 82 percent of the average Sonoma resident’s salary to afford mortgage payments on the median house in the county.

Currently nationwide, the average wage earner spends just over 35 percent of his or her income to afford the median home. Even this number is higher than the government recommended 30 percent.

Among the Top Ten least affordable places to live, that number ranges from 112 percent to 82 percent, according to realtytrac.com.

RealtyTrac’s Top Ten least affordable places for 2016:

Brooklyn, New York at 122 percent

Marin County at 118 percent

Santa Cruz at 113 percent

San Francisco at 95 percent

Maui at 93 percent

San Luis Obispo at 90 percent

Napa at 87 percent

Monterey at 85 percent

Queens, New York at 84 percent

Sonoma County at 82 percent

The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3 percent down payment - including property taxes and insurance.

RealtyTrac senior vice president Daren Blomquist says it’s “not surprising” to see the list of least-affordable housing markets dominated by California coastal counties.

“(It’s) a triple threat when it comes to affordability,” said Blomquist. “First, the temperate climate make it a highly desirable place to live - both for foreign and domestic buyers - creating almost constant high demand for housing.” The second reason, Blomquist says, is that housing supply is constrained by geography - ocean, mountains - as well as stricter building regulations than in other parts of the country.

“Third,” adds Blomquist, “although jobs tend to be more plentiful in many parts of California than other parts of the country, the wages are not proportionately higher compared to the price of homes.”

Local real-estate agent Tracy Reyes says affordability in the City of Sonoma is “particularly challenging.”

“Purchasing a home here, or even renting one, is unattainable for many of our everyday workers,” says Reyes, of Terra Firma Global Partners. “(They) end up commuting from outlying cities such as Santa Rosa, Petaluma and Rohnert Park where housing costs can be more modest by comparison.”

RealtyTrac found the second quarter 2016 average house sales price in Sonoma County to be $530,000. One hour away in the Sacramento area, by comparison, the average house price is $293,000, where only 39 percent of the average salary is required to own the median home.

The affordability in Sonoma County for renters isn’t much more promising. From 2010 to 2014, Sonoma County‘s median renter income dropped by 9 percent and median rents increased by 17 percent, according to the California Housing Partnership.

But in answer to the never-ending question of whether it is cheaper to rent or to buy, the answer in Sonoma County at least appears to favor renting. According to the most recent rental-market data available from RealtyTrac, Sonoma County’s rental affordability index indicates that it currently takes 57 percent of the wages of the average person to afford the average rental in the county, making it significantly more affordable to rent than to own.

RealtyTrac, and its subsidiary Homefacts, provide U.S. housing and property data, including nationwide parcel-level records for more than 130 million properties. Its national neighborhood database includes more than 50 local neighborhood-level dynamics for residential properties.

An interactive chart of each county in the U.S. is available at http://public.tableau.com/shared/HP7T8DZ2F?:display_count=yes.

Contact Lorna at lorna.sheridan@sonomanews.com.