For the middle class in Whatcom, affording a home is becoming more difficult

A middle class Whatcom County family could afford less than half of the homes sold in this area last spring.

That’s the conclusion of a Housing Opportunity Index report put together National Association of Home Builders and Wells Fargo, which evaluated 237 metro areas

For Whatcom County, the index was 45.8 for the second quarter, meaning that’s the percentage of sold homes a family earning the median household income could afford. Seattle’s index was 32.8 for the same period.

The opportunity index for Whatcom County residents has steadily declined since 2012, a time when the U.S. was still recovering from the real estate bust. During the third quarter of 2012, Whatcom’s index was at 76.6 percent.

Whatcom’s index was significantly lower before the arrival of the Great Recession, according to the report. In the third quarter of 2007, the index locally was at 26.4.

The steady drop in housing opportunity is consistent with what the Washington Center for Real Estate Research is seeing, said James Young, director at the center, which is a part of the University of Washington. The center puts out a separate housing affordability index for each county in Washington every quarter.

For the second quarter, Whatcom County’s housing affordability index was 95.6, meaning that a family earning the median household income can afford 95.6 percent of what’s needed to buy a median-priced home.

Whatcom’s current low housing opportunity index number is under different circumstances than in 2007, Young said. In 2007, sub-prime lending and other financial issues were creating a bubble, driving up prices.

Today, Young sees a few different trends impacting many Western Washington communities outside of Seattle. Low inventory remains a factor, particularly with the trend of Seattle residents selling their homes and moving to places like Whatcom County.

Residential construction has been strong throughout Whatcom County, but there’s one component missing that he thinks impacts the middle-class home affordability: The lack of mid-price condominiums.

Liability insurance for condominiums can be expensive, Young said, so only high-end units are being built. Instead, developers will opt for apartments over condos in many areas zoned for multifamily housing.

The lack of condos in the $150,000 to $200,000 range has had a cascading impact, putting more demand on the rental market. Even with more apartments being built, rents are rising. That’s priced some people out of the rental market, creating more homelessness, Young said.

“It creates all sorts of problems, including driving up house prices,” Young said.

Dave Gallagher: 360-715-2269, @BhamHeraldBiz