March 31, 2008

Nashville ranks 16th in affordability!

Nashville ranks 16th for housing affordability in a new Bizjournals study of 50 U.S. cities ranked by income, mortgage payments and taxes.
Nashville Business Journal-March 2008
While builders and Realtors say they applaud Nashville's top 20 ranking, they note some communities in Middle Tennessee need to embrace the need for workforce housing.
"This is just one more feather in our cap," says Mandy Wachtler, president of the Greater Nashville Association of Realtors. "It tells our nation that we're in the top 20. That brings retirees here."
The study ranked the 50 largest metropolitan areas as of mid-2006. It based mortgage payments on a 10 percent downpayment with a 6 percent, 30-year, fixed-rate mortgage.
Oklahoma City ranked most affordable with low taxes and the lowest mortgage payments - $667 a month for both. California cities ranked at the bottom of the list, with Los Angeles the most expensive.
Nashville's median house payment was $960 per month, but its median monthly household income, at $3,975, was lower than other similar-priced cities.
St. Louis ranked 13th with a $962 median monthly house payment but a much higher median income at $4,147 per month.
Builder Peggy Krebs of Elite Homes sees buyers who spend as much as 60 percent of their incomes on mortgage and utilities, which she says is too high. Experts recommend 30 percent.
"Why should people care?" Krebs asks. "Because the individual who's trying to get by with $40,000, what happens is a disproportionate share of their income is put toward housing, which means less money is put into shops, dining, spending."
Krebs focuses on building for the lower-income demographic in Davidson County because there are no impact fees, she says.
Local buyers find Nashville more affordable than buyers find metro areas in other parts of the country. A survey by the Greater Nashville Association of Realtors shows 48 percent of buyers in Nashville purchased homes because of their affordability while 42 percent said that nationwide.
Davidson County has done a good job of offering high density development and incentives to builders to sell a portion of the units at affordable prices, Wachtler says, but higher-priced markets such as Williamson County need to do more.
"We need to look to all surrounding counties to offer workforce housing, not just 5-acre tracts with mansions on them," Wachtler says.

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