A real estate-tracking website said cities like Clovis, Fresno and Modesto are more affordable places to buy a home than Merced.
The list from HomeArea.com used the World Bank and United Nations standard of comparing a city’s median gross income to the median price for a house. At No. 35 on the list of cities of at least 60,000 people, Merced’s housing was deemed less affordable than many other Central San Joaquin Valley towns like Turlock (20) and Madera (17).
Merced’s notoriously low vacancy rate of less than 1 percent adds to the cost of housing, experts say. The city of nearly 85,000 fell six spots on the list from where it was last year.
Zillow shows the median home value in Merced is $245,500 compared to the median household income of $40,704, according to the U.S. Census.
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Along with few houses on the market, Mercedians don’t make as much money as residents in many neighboring cities. In a larger city like Fresno, the median house is $238,800 and its residents make more money ($44,853). So the city of more than a half million people is considered more affordable at No. 12 on the list.
Also this month, the nonprofit think tank Milken Institute said Merced took a huge leap up its “best performing cities” list in thanks to UC Merced’s planned growth through 2020.
The growth of UC Merced is also a large factor in those growing housing prices, according to Terry Ruscoe, owner of Merced Yosemite Realty.
“That’s key in our growth and that’s going to have an immediate impact on Merced proper simply because of its geographic proximity to the UC,” he said on Wednesday. “The closer the housing is to a job epicenter, the higher the cost of housing.”
The median monthly cost for those with a mortgage is $1,405 in Merced, while the median rent with utilities is $819, according to HomeArea.com.
Experts note that Merced’s housing construction has not kept up with its growth. The city grew at a faster rate than any other in the state, according to the U.S. Census update from last year.
A total of 659 permits to build single-family homes were issued in 2018 as building picked up in the northern part of town, city officials said. That’s compared to the 170 issued in 2017, and very few in the 10 years before that.
Permits have also been issued for about 800 rental units, but their construction is contingent on developers getting the financing they need, officials say. Merced leaders also approved a program to encourage in-law suites, which city staffers call “accessory dwelling units.” Though it would likely make only a small dent in the problem, according to staffers, it highlights the need for more spaces to live.
“We need housing. No doubt about it,” Mayor Mike Murphy said on Wednesday. “So we’re pursuing every angle to try to add additional housing stock for our residents. To keep pricing affordable.”
That said, none of the California cities on the list fit the United Nations and World Bank standard of affordable. A 3.0 score is considered affordable, and the statewide median score was 7.1. The most affordable city in the state according to the report, Visalia, scored a 3.6.
The least affordable cities on the list include Glendale, Santa Monica and Newport Beach.