Vail Valley workers losing ground in home buying
EAGLE — If you have two full-time wage-earners in your home, then you need three to buy a house in most Eagle County neighborhoods.
The county’s housing department’s data released this week found an “affordability gap” in every Eagle County community except Gypsum. That’s the bad news.
The good news isn’t that good either. Like everywhere else, Gypsum’s home prices have jumped so fast that its affordability is almost gone.
About the affordability gap
Tori Franks with Eagle County’s housing department explained it like this.
The housing department’s data is based on the average weekly wages of Eagle County workers — that’s W-2 wages reported by employers. They take that average weekly wage, and assume two income earners in your household. They calculate weekly wages by ZIP codes. Then they compare it with the average house sale price in your ZIP code. The difference is your affordability gap.
The equation assumes a 10 percent down payment, and 30 percent of your income spent on housing, Franks said.
The drive to affordability
The Vail Valley is like Southern California in that, the closer you are to the ocean, the more expensive real estate is. Malibu is pricier than Barstow. The closer you are to the ski mountain, the more you pay for property.
If you’re an average wage earner in Beaver Creek earning $1,015 a week, and the average house sells for $2.1 million, then your affordability gap is $1.6 million.
As you commute west from Vail, Gypsum is the first ZIP code where two average wage earners can afford a house, according to the housing department’s data.
Because, for now, every home sale — hovels and starter castles — is part of the equation, the affordability gap tends to grow and shrink up and down the valley.
Headed west, your affordability gap looks like this:
• Vail ($1.4 million affordability gap)
• Eagle-Vail ($185,723 affordability gap)
• Avon ($191,988 affordability gap)
• Edwards ($294,319 affordability gap)
• Wolcott ($1.8 million affordability gap)
• Eagle ($120,904 affordability gap)
• Gypsum ($11,834 affordability surplus)
Gypsum homebuyers had an affordability surplus of almost $70,000 in 2013 when the average sale price was $269,533.
That shrunk to $11,834 by the end of 2014, when the average home sold for $301,731, as wages stagnated.
Throw all of Eagle County into the pool, and the average house sells for $1.052 million. That includes the starter castles in Vail and Beaver Creek, which skews the average, the county’s data says.
As for wages, people earn an average of $971.35 a week, according to this study.
If you’re a two-person household trying to buy a home in the average Eagle County ZIP code, then your affordability gap is $644,154.
“It tracks what we all know, that real estate prices are what’s driving this affordability gap,” Franks said.
Staff Writer Randy Wyrick can be reached at 970-748-2935 and firstname.lastname@example.org.