Sisters works on workforce housing

Jonathan Kelly considers himself one lucky man. The Sisters Middle School teacher just took possession of a new home in Sisters Woodlands subsidized under a workforce housing program. Without assistance from a project created by the not-for-profit Rooted Homes and backed by a consortium of foundations, Deschutes County and Business Oregon, Kelly would still be commuting from Redmond and wondering if he could sustain working in Sisters at all.

Kelly cut the ceremonial ribbon Friday on his 1,248 three-bedroom home on West Canopy Way. Kelly is considered an essential worker and thus qualifies for the below market price. Even though Kelly has a good-paying job, he simply cannot afford to live in Sisters, which in the last three months has reached new record highs in cost.

Photo by Bill Bartlett

Local dignitaries participated in a ribbon-cutting on a Rooted Homes workforce housing home in Sisters Woodlands.

In the April-June period, the hottest for Realtors everywhere, Sisters Country recorded 59 sales totaling $57.5 million. That's not a record, but in this period the average home price came in just under $1 million - $986,875.

The median price, a more accurate gauge of the market, jumped to $808,432. The number of homes sold exceeding $1 million – 18 – is thirty percent of all sales transacted. The average price per square foot is $439, nearly triple what it was ten years ago.

Sisters Woodlands led sales in June with three closings. One, an 859 square foot model, closed at $615,716 or $717 per square foot.

Taking the average of $986,875 a borrower coming up with a 20 percent down payment ($197,375) would be staring at payments of $5,162 per month for principal and interest alone at the best current loan rate of 6.75 percent.

Three years ago, when the rate was 2.95 percent that same loan would have carried a $3,349 payment.

To qualify for an $800,000 loan, a family needs an annual income of $243,091 depending on your financial situation, down payment, credit score, and current market conditions.

The median household income in Sisters is $84,088 and the average household income is $109,585 according to Point2Homes.

Even with two full-time workers each earning the $109,585 average, it's still not enough to afford the average Sisters home. And that's after a $200,000 down payment.

Research by Econofact illustrates the growing crisis. Housing affordability has worsened over the past two decades. Median house prices are now six times the median income, up from a range of between 4 and 5 two decades ago. In cities along the coasts, the numbers are higher, exceeding 10 in San Francisco for instance.

The ratio of median rents to median income has also crept up over this period from 25 percent to 30 percent. Rising house prices are a particular problem for those intending to buy their first homes, while existing homeowners are cushioned somewhat by their increased equity in the house as the price of their home rises.

Households - renters in particular - are increasingly cost-burdened. Households are considered cost-burdened if they spend more than 30 percent of their income on rent, mortgage, and other housing needs. Among homeowners, about 40 percent of those in the $35,000-49,000 income range are cost-burdened, though this share has not changed much over the past decade.

In contrast, the share of cost-burdened renters in that income range has risen sharply from under 40 percent of households in 2010 to over 60 percent today. Even as most households are spending a smaller share of their budget on other basics like food and clothing, the share of households' budgets spent on housing has increased. On average the cost of housing has increased by $5,000 (2021 dollars) per year since 1984.

Photo by Bill Bartlett

Jonathan Kelly.

Community leaders are alarmed at the increasing lack of affordability in Sisters, worried mostly that it will be impossible to recruit or retain critical workers like Kelly and first responders and younger families.