Despite a 30 percent drop in three years in the median price for existing single-family homes, local housing costs are still listed among the most unaffordable in the nation.

Despite a 30 percent drop in three years in the median price for existing single-family homes, local housing costs are still listed among the most unaffordable in the nation.

But a local real estate group says the national housing index is flawed and that affordability has soared in Jackson County.

According to an index released by the National Association of Home Builders, Jackson County ranked No. 6 among the least affordable metro areas with populations of less than 500,000.

According to the NAHB, housing affordability surged nationwide at the end of 2008 to its highest level in at least five years, driven by falling home prices and favorable mortgage rates.

More than 62 percent of all new and existing homes sold in the final quarter of 2008 were affordable to families earning the national median income of $61,500.

That was up considerably from the 56 percent of homes that were affordable in the previous quarter and the 46.6 percent of homes that were affordable at the end of 2007.

Based on fourth-quarter 2008 data, a family earning Jackson County's median income of $50,500 could afford only 39.3 percent of the homes on the market.

Steve Blanton, the chief executive at Southern Oregon Multiple Listing Service, says the NAHB's figures don't reflect the reality of the market because they count every sale, including high-end million dollar homes. A National Association of Realtors survey is more accurate, he says, because it does not include the very expensive homes.

"They are looking at all sales and not comparing just affordability in pure sense of it," Blanton said. ". . . We only use the median price and below and they use all of the market. If you've got a family of four, earning the median income here, you're not going to qualify for a $1 million home in Ashland."

What SOMLS research has found — based on the area's actual median sales price, in which half of the homes sell for more and half for less — is that median income earners have seen a dramatic increase in buying power.

Using the NAR formula, the 2007 affordability index for Jackson County was 81.2. In 2008, it reached 118.2, a 46 percent increase.The SOMLS survey used Census numbers, which produced a $52,000 median income.

Blanton said in the Realtors' formula, an index of 100 means a family of four making the county median wage could afford a median-priced house.

"In 2007, that family could afford less than the median," he said, "and in 2008 they could afford more than median."

As a whole, Oregon communities didn't fare well on the NAHB charts. Eugene-Springfield came in at 46.6 percent, the Portland area 48.9 percent and Corvallis came in at 51.0 percent. Bend ranked as the seventh least-affordable small-market community, one slot behind Medford. Six of the 10 least-affordable small metros were on the West Coast.

The most affordable major housing market in the country during the fourth quarter was Indianapolis, which has topped the affordability list 14 consecutive times. Among smaller markets, Lansing and East Lansing, Mich., came in at 95 percent.

The nation's least affordable major housing market in the fourth quarter was New York City, where just under 14 percent of all homes sold during the period were affordable to those earning the median income of $63,000. Among smaller metro areas, San Luis Obispo-Paso Robles, Calif., was the least affordable market.

"I went through several of the Excel files they put out and saw Miami, Napa, Calif., and Honolulu down there with us," Blanton said. "Those are all very nice places to live, but in terms of real estate values, they're far higher. We might have a ways to go to get wages higher, but $52,000 for a family of four is fairly representative of where the dynamic is at."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.