Via azdailysun.com After three months of searching, Flagstaff resident James Yih found a home he liked and could afford. Yih discussed the home, which was on the market only one day, with his realtor, and decided to make an offer on the house, offering $14,000 above the seller’s asking price. Later, he learned the seller had received 10 offers on the home, which ended up selling for $267,000, $17,000 more than the original asking price. So it was back to the drawing board for Yih, who ended up buying a home in University Heights in March, nearly eight months after beginning to seriously look for a house. “I thought three bedrooms, two bathrooms, a yard and a garage was pretty basic,” Yih said. “But the price you pay to get those things is pretty steep.” Yih’s situation is hardly unique, with many houses priced below the median price of $376,500 selling within a few days, often receiving multiple offers in a short time span, said Lisa Paffrath, the president of the Northern Arizona Association of Realtors and the realtor who worked with Yih. “If a house is in good condition and it’s under $350,000, the house goes fast,” Paffrath said. “Even if the house needs some repairs, it will go quickly.” Paffrath, who recently sold a home she and her husband had been renting out, said she did not even have to put the home on the market before a client in her real estate office made her an offer. A lack of inventory at a price that is affordable for the Flagstaff workforce, paired with prices that are comparable to what they were before the Great Recession has created a difficult situation for homebuyers in the area, many of whom cannot afford to buy a house. “In my opinion, when you look at incomes, I can’t see housing prices continue to go up,” Paffrath said. “It’s getting close to a point where the town won’t be able to support it anymore. When you don’t have the jobs to support the prices, we are looking at the people who keep the town going having to leave Flagstaff.” However, Paffrath said most new development in and around the city is at least a year away, meaning inventory will still be low until new homes come on the market. According to the U.S. Census, the median family income in Flagstaff in 2015, the latest year available, was $66,000. Devonna McLaughlin, the executive director for Housing Solutions of Northern Arizona, said a home is considered to be affordable if a person or family does not spend more than one-third of monthly income on housing and utility costs, meaning a family making the median amount in the city would have about $1,800 to spend on housing monthly. With a median price of a home reaching pre-recession levels, McLaughlin said buying a home in Flagstaff can be out of reach for many families. Karen Flores, the sales manager and loan originator at Academy Mortgage Corporation, said a family in Flagstaff with about $1,800 to spend monthly on housing costs can generally afford a $270,000 purchase price, well below the area median price for a single-family home. “More and more of our clients are struggling with costs in Flagstaff,” McLaughlin said. Both McLaughlin and Paffrath said, despite high home prices, interest rates remain low, which is a benefit for those looking to buy. However, even though prices are about where they were before the housing crash, Paffrath and McLaughlin said they have not seen the risky and predatory practices by buyers and lenders that occurred before the recession. “People are being more responsible when it comes to a monthly payment,” Paffrath said. “Now people are asking about what their monthly payment will be, how the neighborhood is, how the schools are, and before the recession they never asked that. People are doing their homework more.” People looking to invest in property are also being more conservative with their buying now, Paffrath said. “I think investors learned their lesson, because they made a lot of mistakes,” she said. Those in the housing business are also not seeing the predatory lending that was happening before the crash, Paffrath said. “Before, people were putting no money down,” she said. “You don’t see that anymore.” McLaughlin agreed, and said before the recession, people were getting adjustable-rate mortgages that caused the amount of money they owed to grow over time, as well as other types of “predatory or creative lending.” “Lending hasn’t loosened up like it did then,” she said. Flagstaff could also be a unique case, McLaughlin said, mentioning that prices have gone up around the nation, but other markets might not have reached the level of unaffordability that Flagstaff has reached. Flores said she often sees people unable to qualify for a loan, but said there are a variety of factors, including debt and credit score that can disqualify a person or family. However, Flores said if people are willing to be flexible, including considering manufactured homes or buying outside of the city, there is housing available. Most buyers in Flagstaff rely on a dual-income household in order to be able to afford to buy, John Rich, the branch manager of Wallick and Volk said. However, he said he knew of people with a single income able to qualify for a loan because they did not have debt and had a good credit score. Both Flores and Rich said they have not seen the same troublesome lending and borrowing practices that happened before the recession. “Before the recession, they were giving out loans like candy,” Rich said, adding that buyers with bad credit or bankruptcy were able to qualify. Now, buyers must be more qualified in terms of credit history and outstanding debt, he said. Many of the risky lending products have become illegal, Flores said, and lenders are requiring more documentation and proof that the buyers will be able to make payments before allowing someone to take out a mortgage. Both Flores and Rich said the general rule of lending is that a person’s new housing payment, plus any payments on existing debt, should not be more than 45 percent of the person’s gross monthly income. After that point, the person generally will not be approved for the mortgage, Flores said. To combat high prices in the city, Yih and other buyers have looked at creative ways to save money. Tess Brill, a homeowner who closed on a house in Bellemont in March, said she had originally set her sights on living in the city, but found a newer house for a better price for her and her family outside the city limits. “We looked in Flagstaff first, but everything that was in our price range was a fixer upper and we didn’t want that,” she said. Brill, who had been looking for a house since October, had been renting in Flagstaff before deciding on the home, but said rent increased to a point where she would save money by purchasing a home instead. “We wanted to keep our monthly payment around what we were paying in rent,” Brill said. “We knew that’s what we could afford.” Brill said she was looking for a home with at least two bedrooms, two bathrooms and a yard, which she ended up finding. However, she said, if she were to do it again, she said she would have looked outside the city earlier. “When we first started looking, interest rates were really low,” she said. “They are still low, but had we realized that and looked outside the city sooner, we might have been able to buy a bigger house.” For Yih, splitting some of the cost with a roommate will help him save some money. “I set myself up so I could afford this place by myself,” he said. “But I plan on having roommates. It will make the financial situation a little easier.” The house has two extra bedrooms, and Yih plans to rent out at least one of them. Housing Solutions of Northern Arizona, McLaughlin’s organization, is a nonprofit organization that can act as an impartial adviser to those looking to buy a home, as well as assist first-time homebuyers with programs available. For buyers within the city limits who qualify, the Housing Assistance Program can help with up to $15,000 of a down payment, which is funded through the city of Flagstaff and the Community Development Block Grant. The assistance is a loan, but it requires no payments and no interest. The money is paid back when the home is no longer owner occupied or when the owner decides to sell it, McLaughlin said. About seven to 10 households a year are assisted by the program, she said. For buyers in the region but outside the city who qualify, the Workforce Initiative Subsidy for Homeownership is a 3-to-1 matching program, which matches a contribution of up to $5,000, meaning the buyer can receive up to $15,000 through the program. McLaughlin said the program is also a loan, but assistance is forgiven after five years. The reporter can be reached at firstname.lastname@example.org or 556-2249.