Is it more affordable to rent or buy housing in Clark County? According to RealtyTrac, those earning an average wage are better off renting in 2016.
The real estate website said people would spend 45.4 percent of their wages on the payment for a median-priced house, or spend 41.4 percent of their wages on rent. Both numbers bypass the industry standard that says people shouldn’t spend more than 30 percent of their income on housing, said Carmen Villarma, president of The Management Group, a Northwest real estate company. Unless wages increase, those standards may have to change, she said.
RealtyTrac used data from the U.S. Department of Housing and Urban Development, the Bureau of Labor Statistics and public record sales deed data to calculate the affordability of 504 counties with populations over 100,000.
By RealtyTrac’s measurements, it’s also more affordable to rent in neighboring Multnomah County, Ore., and Cowlitz County than to buy. That holds true for the vast majority of West Coast counties. The Midwest and South were found to be more affordable for buyers than renters. Nationwide, it’s more affordable to buy than to rent in 58 percent of the surveyed counties.
In Clark County, both rents and house prices are on the rise.
“Things are kind of at an anomaly in a sense,” Villarma said. “Rents are trending upward — we all know that — but sales prices are trending upward, too. … It’s just not ever happened before.”
In the past, she said, there’s been enough inventory that when prices for rentals increased, the cost to buy went down, or vice versa.
Vancouver is believed to have the fastest-growing rents in the nation. During the third quarter of 2015, a three-bedroom, two-bathroom apartment cost $1,313, according to Pacific Northwest real estate company Norris, Beggs & Simpson. That’s $117, or 9.87 percent, more than last year.
Furthermore, most renters these days pay for utilities and services such as trash and parking, which used to be included in rent. They’re also often required to buy renter’s insurance.
Saturated market
At last count, rental vacancy in Vancouver was estimated to be 1.87 percent, Norris, Beggs & Simpson said. That rate indicates a saturated rental market.
Over the last year, Clark County has had a low inventory of houses for sale, too. Last month, the median sale price for a house in Clark County — half sold for more, half for less — was $274,000, according to RMLS, a real estate listing service. That’s 7.5 percent more than November 2014.
New subdivisions often come with homeowner association fees, Villarma said. “Quite a few years ago, that wasn’t the standard. Now, it’s the standard.”
Those who have the financial wherewithal to choose between renting and buying should make a list of pros and cons, Villarma said. Unless inventory increases, she predicts prices will continue rising.
Those who buy, though, have a fixed payment and are building equity as they make those payments, whereas rentals are subject to market fluctuations. Most renters earn less than the average wage and are faced with a low inventory of entry-level-priced houses that would be their ticket out of the rental market.
