{"id":1906,"date":"2026-02-25T11:10:58","date_gmt":"2026-02-25T19:10:58","guid":{"rendered":"https:\/\/wallawallatrends.org\/newsletter\/?page_id=1906"},"modified":"2026-02-25T11:10:58","modified_gmt":"2026-02-25T19:10:58","slug":"feb26_main1","status":"publish","type":"page","link":"https:\/\/wallawallatrends.org\/newsletter\/feb26_main1\/","title":{"rendered":"Housing Affordability Appears to Have Stabilized, but County Housing is Still Not Affordable"},"content":{"rendered":"
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by Dr. Patrick Jones<\/strong><\/p>

Watching housing prices has become an American pastime.\u00a0Websites like Zillow and Realtor.com\u00a0offer often\u00a0irresistible temptations to check the latest estimate of our and our neighbors\u2019 houses. I doubt that Walla Walla\u00a0homeowners\u00a0are immune to this\u00a0urge.<\/span>\u00a0<\/span><\/p>

Beyond\u00a0an\u00a0innocent pastime, housing prices\u00a0play\u00a0a fundamental role in the local economy. For owners, the value of their home is a bankable asset, and for most Americans the largest asset that they\u00a0possess. For businesses that have plans to expand\u00a0or are considering relocating, housing prices factor heavily\u00a0in\u00a0their ability to attract\u00a0new staff\u00a0and workers. For local and state governments in Washington, property tax revenue figures\u00a0prominently\u00a0in their ability to offer a full breadth of public services.<\/span>\u00a0<\/span><\/p>

If the average house price goes up, there are winners and losers. Winners are sellers and local\u00a0jurisdictions; losers are would-be buyers and many businesses. But assessing whether an increase in housing prices is, on balance, positive or negative for a local community depends on key contextual\u00a0item:\u00a0any\u00a0change in income. Obviously, if housing prices rise by 25% over a five-year\u00a0period\u00a0but local incomes climb only 10%,\u00a0buyers\u00a0will worse off, even perhaps sellers who may not be able to\u00a0complete plans to move if unable to sell.\u00a0<\/span>\u00a0<\/span><\/p>

However, if the average housing price rises by 25% while the average family income also increases by 25%,\u00a0the average home purchaser is not\u00a0worse off.<\/span>\u00a0<\/span><\/p>

What has been the recent experience in Walla Walla County, say,\u00a0over the past four\u00a0years.\u00a0Income data for 2025 are not yet available, so\u00a0let\u2019s\u00a0consider the period 2021-2024. During this period, heavily\u00a0impacted\u00a0by the pandemic, the median resale price rose from an average of $376,500 to $430,450, or cumulatively\u00a014%. (Median is used to\u00a0arrive at\u00a0a better estimate of the \u201cmiddle\u201d of the range of sales; resale obviously excludes new\u00a0construction.)<\/span>\u00a0<\/span><\/p>

And income? As in home prices,\u00a0let\u2019s\u00a0also\u00a0use\u00a0a\u00a0more representative view of the \u201cmiddle\u201d of an income distribution, the median; averages, or means,\u00a0can be strongly affected by a\u00a0few\u00a0high values (outliers). And\u00a0let\u2019s\u00a0use\u00a0<\/span>household<\/span><\/i>\u00a0income, since very often a family,\u00a0or household more generally,\u00a0will have two members receiving income and contributing to the\u00a0payment of\u00a0a mortgage.<\/span>\u00a0<\/span><\/p>

In the metro area (Walla Walla and Columbia Counties) over the same period, median household income rose from $65,217 to $72,892, or cumulatively about 12%. (Given the\u00a0large population difference between the two counties, the value\u00a0largely reflects\u00a0Walla Walla\u2019s values.)<\/span>\u00a0<\/span><\/p>

In this case, housing prices have certainly risen, but median household income has\u00a0as well, by\u00a0nearly the\u00a0same percentage.\u00a0So\u00a0affordability has slipped but not by much.<\/span>\u00a0<\/span><\/p>

Yet, if we take a longer view, say, starting in\u00a02016, the conclusion is different. The median resale price in the\u00a0county in\u00a0that year was $207,400. The cumulative percentage\u00a0increase\u00a0through 2024: 108%, slightly more than a doubling. And median household income\u00a0over the same time period?\u00a0\u00a0An increase of 33%.<\/span>\u00a0<\/span><\/p>

Clearly,\u00a0affordability\u00a0dramatically worsened over this\u00a0longer\u00a0span of time, as price gains outpaced income gains by more than 3:1.<\/span>\u00a0<\/span><\/p>

The Trends offers\u00a0a\u00a0 similar\u00a0measure of (re-sale) housing affordability in this\u00a0<\/span>indicator<\/span><\/a>. It is currently produced\u00a0by\u00a0the Center for Real Estate Research at the University of Washington. The measure\u00a0generally\u00a0is\u00a0a\u00a0ratio of income to housing costs. In the numerator\u00a0is the\u00a0quarterly\u00a0equivalent of\u00a0(annual)\u00a0median household income. In the denominator is the quarterly mortgage cost of the median-priced resale house. The denominator then reflects both the purchase price as well as the financing costs, here assumed to be based on conventional 30-year mortgage.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>

The ratio is expressed as an index, where 100 is the \u201cbalanced\u201d value,\u00a0reflecting\u00a0that a household\u00a0doesn\u2019t\u00a0spend more than 25% of its income on the mortgage. If it spends more, the value slips below 100; if\u00a0it spends\u00a0less, the index value lies above 100.\u00a0<\/span>\u00a0<\/span><\/p>

Where is Walla Walla County currently?\u00a0For the third quarter of 2025, the ratio was 77.5\u00a0While\u00a0an improvement from 2022, it\u00a0wasn\u2019t\u00a0long ago, 2021, that the index lay consistently above 100.\u00a0For several years\u00a0now, this ratio has been less than 100.<\/span>\u00a0<\/span><\/p>

Consequently, it seems safe to conclude that for the median buyer, housing in the county has become unaffordable. Will the index climb back to\u00a0100 anytime\u00a0soon? Unless a dramatic change occurs to the housing stock, such as\u00a0the construction of\u00a0much smaller units or even\u00a0condos, or unless\u00a0\u201cmiddle\u201d incomes go\u00a0up substantially, this\u00a0prospect is not in the offing.\u00a0And\u00a0re-gaining the affordability levels of a decade ago, when the index was greater than 150,\u00a0seems very remote.<\/span>\u00a0<\/span><\/p><\/div><\/div><\/div><\/div> <\/div>\n <\/div>\n <\/div>\n\t\t\t\t\t\t\t\t\t <\/div>\n\n <\/div>\n <\/div>\n\t\t\t\t

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