Median house price beyond income of many local workers |

Median house price beyond income of many local workers

When state and local governments talk about “affordable housing,” they typically mean rental housing for people on low incomes. They usually are not talking about what a working person can afford to buy.

How do local wages compare to the cost of buying a house here?

The median wage in 2005 for all jobs in northeastern California is $17.36, or about $36,100 yearly before taxes, based on a 40-hour work week, according to state figures.

The picture is slightly different when looking at household income, which includes all wage earners in a household.

In Nevada County, the median household income was $45,864 in 1999, according to the most recent federal information.

Those rates are slightly ahead of what is needed to pay for the median-priced, single-family house in Nevada County, which cost $460,000 in 2005.

A person working a 40-hour week would have to earn $15.28 an hour, or $32,700 yearly after taxes, just to pay for the mortgage, property taxes and insurance, according to calculations by The Union.

The median is not the average. Rather, it is the exact middle, where half of everything measured is higher and half is lower. It is the number preferred by statisticians tracking wages, housing costs and most other statistics in the state.

Those statistics often don’t mesh easily, but they begin to sketch a picture of the cost of housing compared to wages in Nevada County. DataQuick Information Systems, based in San Diego, tracks housing prices by county. In Nevada County, the median hit $460,000 for 2005.

Loan terms and actual payments for that house can vary widely. However, to calculate an approximate monthly payment for that median-priced house, The Union assumed the buyer has a 20-percent down payment and a conventional loan fixed at 6.125 percent.

Using those assumptions, the approximate amount needed to pay the mortgage, insurance and property taxes each month for the median-priced house comes to about $2,725, or $32,700 yearly.

While DataQuick offers county-by-county information on median house prices, the state Employment Development Department groups Nevada County wage information together with nine other counties in northeastern California. (See median monthly wages chart.)

Yet Nevada County has the most jobs among the 10 counties, making up nearly 30 percent of employment in the region. That makes the county-region comparison problematic, but the best one possible given the statistics that are currently available, said state labor market consultant Mary Mahoney, who is based in Nevada City.

Regionally, workers earned a median of $3,008 per month, or $36,100 yearly in late 2005, according to those EDD figures.

Household income information is available by county through the United States Census Bureau ” the median was $3,822 monthly for Nevada County in 1999. But it is based on the most recent census and lags behind the state information and the figures for the current real estate market.

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