Modeling Housing Affordability in Corpus Christi, Texas December 13, 2018
Ov Overview I. Background II. Owner-Occupied Housing Affordability III. Renter-Occupied Housing Affordability IV. Future Housing Needs V. Housing & Neighborhood Quality VI. Conclusion
I. Background
Dem Demographic Ch Character eristi tics s (20 2017) City of Corpus Christi Nueces County Population 325,600 361,221 Households 115,797 128,490 Median Family Income $63,100 $63,100 Percent of Owner- 57% 58% Occupied Housing Units Percent of Renter- 43% 42% Occupied Housing Units Source: Department of Housing and Urban Development, U.S. Census Bureau
Owner Own er-Occupied Housin ing St Stock (20 2017) Property Type Number of Proportion of Number of Proportion of Owner- Owner- Owner- Owner- Occupied Occupied Occupied Units Occupied Units Units in the Units in the in Nueces in Nueces City of Corpus City of Corpus County County Christi Christi Single-family 82,996 92.6% 94,505 90.6% Condominium 3,620 4.0% 6,352 6.1% Townhouse 3,042 3.4% 3,491 3.3% Total 89,658 100.0% 104,348 100.0% Source: Nueces County Appraisal District
Sp Spatia tial l Dis Distr tribution of Own Owner er-Occupied Housin ing St Stock (20 2017) Source: Nueces County Appraisal District
Ren enter er-Occupied Housing St Stock (20 2017) Number of Proportion of Number of Proportion of Renter- Renter- Renter- Renter- Property Type Occupied Units Occupied Units Occupied Units Occupied Units in the City of in the City of in Nueces in Nueces Corpus Christi Corpus Christi County County 1-4 30,427 61.7% 33,415 63.5% 5-9 8,630 17.5% 8,733 16.6% 10-49 6,259 12.7% 6,447 12.3% 50 or more 3,977 8.1% 4,014 7.6% Total 49,293 100.0% 52,609 100.0% Source: U.S. Census Bureau
Sp Spatia tial l Dis Distr tribution of Ren enter er-Occupied Housing St Stock (20 2017) Source: U.S. Census Bureau
Inc Income e Coh Cohort rts s (20 2017) Income Cohort Percent of Income Range Percent of Percent of Median Households in Households in Family the City of Nueces County Income Corpus Christi Extremely Low 0 - 39% $0 - $24,600 22.9% 23.6% Income Very Low $24,601 - 40 - 49% 6.5% 6.6% Income $31,050 $31,051 - Low Income 50 - 79% 17.0% 17.4% $49,700 $49,701 - Workforce 80 - 120% 19.1% 18.3% $75,720 Market-rate 121%+ $75,721+ 34.5% 34.1% Source: Department of Housing and Urban Development, U.S. Census Bureau
Inc Income e Coh Cohort rts s by y Housi sing g Type ype (20 2017) Income Income Range Percent of Percent of Percent of Percent of Cohort Owner- Renter- Owner- Renter- Occupied Occupied Occupied Occupied Households in Households in Households in Households in the City of the City of Nueces Nueces Corpus Christi Corpus Christi County County Extremely $0 - $24,600 16.3% 33.6% 15.7% 32.3% Low Income Very Low $24,601 - 4.9% 9.0% 4.7% 8.9% Income $31,050 $31,051 - Low Income 13.7% 22.3% 13.4% 21.7% $49,700 $49,701 - Workforce 19.1% 17.3% 19.4% 18.6% $75,720 Market-rate $75,721+ 46.1% 17.8% 46.8% 18.4% Source: Department of Housing and Urban Development, U.S. Census Bureau
Med edian ian Famil ily Inc Income in in Nue Nueces s Cou County ty by y Ce Censu sus Tract ct (20 2016) Source: U.S. Census Bureau
De Definin ing Housi sing g Af Affordabili lity ty • What does housing affordability measure for owner- and renter-occupied units? Housing Affordability measures the relationship between home price or rent and median family (or household) income.
De Definin ing Housi sing g Af Affordabili lity ty • Owner-Occupied Housing Affordability • Median family (or household) income as a percentage of required income to qualify for a mortgage • Calculates the required income to qualify for a particular home price based on the total monthly mortgage payment (monthly mortgage payment + additional expenses associated with homeownership) • HAI = 1.10 means median income 10% > required income • Renter-Occupied Housing Affordability • Rent as a percentage of median family (or household) income (Example: Rent is 30% of median income)
II. Owner-Occupied Housing Affordability
Own Owner er-Occupied Housin ing Af Affordabil ilit ity in in th the e Corp Corpus-Chris isti i MSA • Decline in owner-occupied affordability following the end of the Great Recession. Owner-Occupied Housing Affordability in the Corpus-Christi MSA $200,000 +39% $180,000 $160,000 Widening gap between Median Home $140,000 median home price and Price $120,000 median family income $100,000 Median Family diminishes affordability Income $80,000 +31% $60,000 $40,000 $20,000 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Financial Institutions Examination Council and Real Estate Center at Texas A&M University
Own Owner er-Occupied Housin ing Af Affordabil ilit ity in in th the e Corp Corpus-Chris isti i MSA • However, the MSA remains relatively affordable with an HAI above 1.00. Housing Affordability Index: Corpus-Christi MSA Increasing Affordability 2.50 2.14 1.94 Housing Affordability Index 1.86 2.00 1.84 1.80 1.79 1.73 1.74 1.63 1.45 1.42 1.50 1.33 Median Income > Qualifying Income 1.00 Median Income < Qualifying Income 0.50 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Financial Institutions Examination Council and Real Estate Center at Texas A&M University
Own Owner er-Occupied Housin ing Af Affordabil ilit ity in in Corp Corpus s Ch Chris risti i vs. s. Oth Other er Geog eographie ies • While affordability has declined since the end of the Great Recession, Corpus Christi is relatively affordable in comparison to other geographies. Housing Affordability Index Texas Corpus Beaumont- Brownsville- McAllen- San Victoria Christi Port Arthur Harlingen Edinburg- Antonio- Mission New Braunfels 2011 2.04 1.94 2.40 1.68 1.58 1.98 2.12 2017 1.54 1.80 2.01 1.54 1.54 1.59 2.06 Source: Real Estate Center at Texas A&M University
Home Pric rice e App Apprec eciation in in th the e Corp Corpus Ch Chris risti ti MSA • Home price appreciation increased significantly following the Great Recession. • However, the rate of increase has slowed over the past few years Annual Home Price Appreciation in the Corpus Christi MSA, 1981-2017 20% Historical average: 2.7% 15% Seven-year average (2011-2017): 3.5% 10% 5% 0% 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -5% -10% Source: Federal Reserve Economic Data
Res esid identi tial Sa Sales les Ac Activ tivity ty in in Nue Nueces Cou County ty • Decline in sales of lowest-priced homes ($0-$149,999) • Rise in sales of homes priced $150,000+ strains housing affordability for lower- income households All Residential Sales in Nueces County (2010-2017) 30% 25% Percent of Total Homes Sold $0 - $69,999 20% $70,000 - $99,999 $100,000 - $149,999 15% $150,000 - $199,999 $200,000 - $299,999 10% $300,000 -$399,999 $400,000+ 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Source: Real Estate Center at Texas A&M University
Res esid identi tial Sa Sales les Ac Activ tivity ty in in th the e Cit City y of Corp Corpus Ch Chris risti ti • Decline in sales of lowest-priced homes ($0-$149,999) • Rise in sales of homes priced $150,000+ strains housing affordability for lower- income households All Residential Sales in the City of Corpus Christi (2010-2017) 35% 30% Percent of Total Homes Sold 25% $0 - $69,999 $70,000 - $99,999 20% $100,000 - $149,999 $150,000 - $199,999 15% $200,000 - $299,999 $300,000 - $399,999 10% $400,000+ 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Source: Real Estate Center at Texas A&M University
Sp Spatia tial l Dis Distr tribution of Al All l Res esidentia ial l Sa Sales les Source: Real Estate Center at Texas A&M University
Ne New w Res esid identi tial Sa Sales les (MLS) LS) Ac Acti tivit ity in in Nue Nueces Cou County ty • Virtually no new construction of lowest-priced homes (less than $99,999) • Significant decline in new construction of homes priced $100,000-199,999 • Tremendous growth in new construction of homes priced $200,000-299,999 New Residential Sales Activity in Nueces County (2010-2017) 60% 50% Percent of New Homes Sold 40% $0 - $69,999 $70,000 - $99,999 $100,000 - $149,999 30% $150,000 - $199,999 $200,000 - $299,999 $300,000 - $399,999 20% $400,000+ 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Source: Real Estate Center at Texas A&M University
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