LIMA — There may be a silver lining in the economic turmoil wrought by the pandemic for cities like Lima: The newfound mobility of a work-from-home class no longer tethered to the office has made these cities more attractive at a time when home prices are rising faster than wages in many parts of the U.S. and historically low interest rates have made borrowing more affordable.
The first 11 months of 2020 saw home prices rise by an average of 10.4% in the West Central region, which extends from Allen County into Van Wert and Hardin counties.
By November, the average home here was selling for $157,743 — nearly 18% higher than an average home sold this time last year, according to the Ohio Association of Realtor’s November sales report.
But to afford a median-priced home in Allen County, a person need only make $24,285 per year, according to a recent analysis of the most expensive and affordable housing markets in the U.S. by ATTOM Data Solutions.
In nearly a quarter of the 499 housing markets surveyed, ATTOM Data Solutions found that a person needed to make at least $75,000 per year to afford a median-priced home, while a person would need to earn at least $250,000 to purchase an average home in places like San Francisco or Manhattan.
The analysis, which calculated the amount of income needed to make monthly mortgage, property tax and insurance payments compared to the average weekly wage in major U.S. housing markets, found that median-home prices were up by at least 10% in more than half of the housing markets surveyed, while home price appreciation outpaced wage growth in more than 90% of those markets.
Markets were considered affordable when housing costs were less than 28% of average household earnings.
The U.S. housing market has hardly been affected by the pandemic, save for a brief dip in sales activity last spring.
“If you’re paying less than 3% to borrow the money and home prices have appreciated 10%, that’s a good investment,” said Timothy Stanford, broker for Superior Plus Realtors in Lima, who is seeing more buyers looking for multi-generational homes and properties with home offices or separated rooms, rather than open-concept homes.
John Navin, dean and professor of economics for Ohio Northern University’s Dicke College of Business Administration, attributed that resiliency to the combination of low interest rates, the rapid rise of working from home and an uneven economic recovery, in which some industries have been decimated by layoffs and closures while others have been hardly affected.
“People figured out that there was a large group that weren’t impacted,” Navin said, “so the end result was cheap mortgage rates and the ability to refinance, or for what they were paying in rent to be able to actually buy a house — that’s allowing some people to move.”