Local area 3rd least affordable nationwide

Study based on percentage of household income spent on mortgage payments

May 10, 2006

By DANE GOLDEN
ARGUS-COURIER STAFF

Petaluma is making national news again -- this time, for its high housing prices.

According to a Monday New York Times article citing data from Moody's economy.com and the U.S. Census, the Santa Rosa-Petaluma area is the third least affordable region nationwide. The analysis ranked areas based on the percentage of household income spent on mortgage payments.

Santa Rosa-Petaluma isn't the only area in California that is highly unaffordable, according to the article. In fact, each of the top 11 highest mortgage-rate-to-income areas were in the state. A New York City suburb was ranked No. 12 nationwide.

Salinas and Santa Cruz-Watsonville were ranked even less affordable than Santa Rosa-Petaluma.

Although the New York Times article did not give specifics about exactly how difficult it is to afford to live here, a similar report released in December by the National Association of Home Builders and Wells Fargo ranked the area as the 17th least affordable in the nation.

Not everyone agrees with the study.

"I think that we're much more affordable than people give us credit for," said Marsha Harris, a broker associate with Century 21 Bundesen.

The problem in the past, she said, has been the low inventory of available homes, which drove up prices. But while there are often only about 125 or so homes for sale in Petaluma, she said, there are now about 185 homes on the market. The lowest current listing on the east side for a condo is $319,000, and the lowest listing for a condo on the west side is $260,000.

And in comparison to the rest of the Bay Area, Petaluma is much more affordable, Harris said. She did add, however, that the market was significantly more difficult for first-time buyers.

The high unaffordability rating was no surprise to John Records, executive director of the Committee on the Shelterless.

"I had known for a long time that it was high, but I was shocked to find it reported on a national basis," he said.

Records pointed to another Monday New York Times article, titled "America's 'Near Poor' Are Increasingly at Economic Risk, Experts Say," which describes the current strains on those on the lower rungs of the economic ladder.

High mortgage payments as a percentage of income don't usually have a direct affect on COTS clients, Records said, who with assistance "can hope to become working poor."

But the organization is seeing some trickle-down effects of a fickle economy. For instance, COTS recently assisted a client who had been laid off by a local tech company.

COTS clients are more affected by rental rates, which are also very high in the area compared to wages, Records said.

"If you're making minimum wage or you're making $10 an hour, you're out of a lot of markets," he said. "You can either double up, get on a waiting list for subsidized housing, move or be on the streets."

(Contact Dane Golden at dgolden@arguscourier.com)