Through the looking glass - Alice in the wonderland of Housing
What follow is an analysis of Yellowstone County and the housing market to see if we can discern where it might head over the next couple of years by understanding income and household growth to see if we are in “balance” or has there been more housing produced than what is needed by growth or has pricing outpaced income.
Two things that are important to know 2006 was the year in which the greatest number of residential properties were sold in the mls and 2013 was the (I think) the bottom of the interest rate cycle. Another important piece of information to know, 2013 is the most current year for income data form the census bureau, actually the information comes from IRS tax returns filed in Yellowstone County, so in theory, truly represents household income distribution.
Comparing Yellowstone county 2006 to 2013 income distribution and size difference |
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Subject |
income distribution and size difference |
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Households |
size difference |
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2006 |
2013 |
households |
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Total |
55050 |
61439 |
+6389 |
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Less than $10,000 |
8.2% |
5.8% |
-951 |
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$10,000 to $14,999 |
7.2% |
6.9% |
+276 |
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$15,000 to $24,999 |
13.0% |
11.2% |
-275 |
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$25,000 to $34,999 |
12.4% |
9.7% |
-867 |
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$35,000 to $49,999 |
14.2% |
14.0% |
784 |
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$50,000 to $74,999 |
21.3% |
19.8% |
+439 |
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$75,000 to $99,999 |
12.8% |
12.6% |
+695 |
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$100,000 to $149,999 |
7.2% |
11.6% |
+3163 |
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$150,000 to $199,999 |
2.6% |
4.4% |
1272 |
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$200,000 or more |
1.1% |
4.0% |
+1852 |
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100% |
100.0% |
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Median income (dollars) |
$43,377 |
$52,610 |
+$ 9,233 |
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Mean income (dollars) |
$53,419 |
$71,723 |
+$18,304 |
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% increase median income |
121.3% |
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% increase mean income |
134.3% |
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increase housing units |
58,230 |
64,886 |
+ 6,656 |
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employment |
77,278 |
76,267 |
(1,011) |
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% of jobs over households |
140% |
124% |
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% of households to housing units |
94.54% |
94.69% |
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Household income increase as compared to housing price increase from 2006 to 2013
The average sales price of a home increased 23.24% 2006 to 2013, while the average household income increased 34.3% 2006 to 2013. The the actual payment for the average sales priced home declined from $1,513 to $1,419 or 6.2% even with the increase in sales price (the decrease in payment was caused by the decline interest rates 2006 6.41% vs. 2013 3.98%). The percentage of average household income needed in 2006 was 33.99% of their monthly income, to purchase the average sales priced home. Looking at 2013, the average percentage of household income needed was 23.74% of their monthly income to purchase the average sales priced home. This represents a 30.16% decline in the cost of purchasing a home in Yellowstone County to average household.
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