Orcas multiple listings today show four homes under $300,000: two Eastsound condos and two livable houses. Could a salaried worker on Orcas buy one of these? Let’s work the numbers.
First huge hurdle: banks require a down payment of at least 20 percent — e.g., $60,000.
Next, banks will usually approve a home loan only if the mortgage, insurance, and tax payments will not exceed about one-third of the buyer’s gross income. Zillow Mortgage Calculator says that monthly mortgage payments on a $240,000 loan at today’s 5 percent times a 30-year rate, plus average taxes and insurance, would be about $1,550 per month. Thus, gross income of the person or the couple buying would have to be at least $4,650 per month to qualify. A person or a couple working 40 hours a week year-round would need a steady combined income of about $27 per hour to get this loan. Really!
Facing these formidable challenges, a salaried worker might try to RENT a place to live on Orcas. While looking up the multiple listings, I also looked up the vacation rentals by owner (VRBO) listings for Orcas Island. There were 447 VRBOs advertised in October, ranging on average from $200-$300 rent PER DAY! I have to ask: if you owned an unoccupied Orcas house, why in the world would you rent or lease it year-round, even at $1,600 per month, when you can VRBO it for three months of the year and make the same amount, with one-quarter as much wear on the house? There go 447 possible rentals for Orcas year-round salaried workers.
Folks, let’s get REAL. If we need a workforce of year-round salaried workers on Orcas — which we most certainly do — then we also need year-round homes which those workers can buy or rent. Join me in voting YES for the Affordable Homes initiative.