This discussion has been a long time coming. It’s hard to really determine what is affordable and what kind of housing that is, but I have strong opinions. This discussion will also be 24060-specific, but I feel it will affect 24073 in the near future as those who cannot afford Blacksburg are moving in droves to Christiansburg. As Virginia Tech continues to grow and as more businesses start up in Montgomery County, housing prices will continue to climb. If I remember correctly, the housing bubble that hit the country a few years ago didn’t affect the county.
I am not going to get into student housing as that is a separate issue. Also, I am not going to focus on renting, (although the numbers would be similar), or game day homes. And of course, all of this is strictly my opinion only although based on factual numbers and a reasonable approach to personal finance.
Let’s dive in.
Figuring out what is affordable
Years ago, my family and I followed the Dave Ramsey plan for personal finance. It helped us get a grip on our finances and it really, pardon the pun, paid off. Whatever you think about his plan, his ideas behind what you can afford in a home is a great rule to follow – your monthly payment should be no more than 25% of your take-home pay. This is what I consider an “affordable home” for someone.
Now banks will tell you differently. When we were looking for a home, we had a set price in mind based on the rule above. The bank said we could afford 46% MORE at a 15-year fixed rate than we were willing to invest in a home. A 30-year fixed would be 92% more than what we knew we could afford. 90-freaking-2 percent. This is why I am not going with what a bank says is affordable.
Average income
This gets really tricky. If you go by census data, the median household income in Blacksburg is $43,173 (2019) a year. However, that includes students who do not have an income. Various reports list the average annual salary of Virginia Tech (major employer) at $75,105 with a median salary of $59,595. Montgomery County has a median household income of $57,977.
So. Many. Numbers.
I am going to do this. I am throwing out the Blacksburg salary. I am adding the 2 Virginia Tech salaries and the Montgomery County salary then dividing them by 3. I get $64225.6666667. Let’s just round up to $65,000.
For all these examples, I am going to use a household salary of $65,000 before taxes. Is this the right way to do this? Probably not, but at least I’m trying to answer the “What is affordable” question.
Affordable housing now
Blacksburg has amazing resources for low-income housing through the Affordable Workforce Housing initiative. Between them, Habitat for Humanity, Community Housing Partners, and other local organizations, low-income folks have a few options in Blacksburg. However, the demand cannot meet the need.
Let’s take a half-step back. According to the latest census data, the average persons per household in Blacksburg is 2.64 with Montgomery County at 2.49. Since I believe in the whole person, let’s round that to 3 people per household.
If you would like housing offered by one of the above services and you have 3 people in your household, you cannot make more than $55,250 a year. For 4 people? $61,350 a year. The town and CHP have the same requirements as they work together. I am not sure what Habitat’s requirements are for income, but you do have to help build your own home.
Currently, there is a CHP project in the works at 100 Country Club Drive, SE that will consist of 56 apartments with 142 bedrooms – 2.5 bedrooms per apartment. That can help 56 households, if they make under $55,250 a year.
Great project, but not the “affordable” housing for the average income in Blacksburg. Even if it was, it’s still in high demand.
Assumptions
Looking at all these numbers is dizzying.
Here are my assumptions of what is affordable:
- No debt. No credit card payments. No car payments.
- $65,000 annual income.
- 25% of take-home pay, which after taxes would be $4,270/month, (married with one dependent).
- Assuming 20% down.
- 30-year fixed at current rate of 3.55%.
- Assuming excellent credit.
The final number? Somewhere around $225,000-$233,000.
I read somewhere that 28% of take-home pay is reasonable. If you want to follow that, then $250,000.
I bought a 4 bedroom, 2 bath house, with a garage and carport, on almost an acre of land in Blacksburg for that price – in 2002.
Looking at the numbers
Going back to our household, we know there are 3 people – a couple and a child. So we need at least 2 bedrooms. We want a home that is $250,000. So what can we get right now? These include pending sales because otherwise, the list would be stupid short.
Condos
- There are two, 2 bedroom, 2 bath, 900 square foot condos, next to student housing off of Patrick Henry Drive. $189,000 (pending offer after 52 days listed) – $195,000 (pending offer after 136 days listed).
- A 2 bedroom, 1 bath, 978 square foot condo in Brightwood Manor off of Prices Fork Road. This place is confusing to me as I am not sure if students live there or not. But it is isolated from the larger student housing complexes. $178,000. Pending offer after 18 days listed.
- A 3 bedroom, 2 bath, 885 square foot condo in University Place. Smack dab in the middle of student housing. I lived in that complex in the 1990s and it wasn’t great then. $213,000. Pending offer after 99 days listed.
Townhomes
- 3 bedroom, 2 bath, 1400 square foot townhome. Or maybe it’s a condo. It’s an unusual area. It’s on Donlee Drive off of Nellie’s Cave. Older place built in the 1970s. I know a few folks who have lived or still live there. Lots of families, a pool, walking distance to Nellies Cave Park. $229,950.
Single-family
- 3 bedroom, 1 bath, 1000 square feet on 3.33 acres! But wait, sold AS-IS. Looks like someone started renovations but never finished. It’s also in the county and not town limits, so Blacksburg schools, but not Blacksburg services. $220,000.
- 3 bedroom, 2 bath, 1648 square feet mobile home on .5 acres of land. It’s also in the county and not town limits, so Blacksburg schools, but not Blacksburg services. $189,000. Pending offer after 20 days listed.
- 3 bedroom, 2 bath, 1100 square feet mobile home on 10.67 acres of land. To quote the Realtor, “this property needs a lot of work.” Subfloor needs replacing. Well is on the neighbor’s property. There are no pictures of the inside at all. It’s way out there off of Norris Run Road. It’s also in the county and not town limits, so Blacksburg schools, but not Blacksburg services. $59,000.
- 3 bedroom, 1.5 bath, 1508 square feet, on 8,276 square feet of land. In town! $250,000. Pending offer after 2 days listed.
But come on, $65,000 is so low. OK. Let’s say you make $100,000 with the same assumptions as above. That moves the affordable price up to $350,000 – which gave me 8 other options. One was smack in the middle of student housing.
Dream on
If I had my way, I would have a couple of Airport Acres-like neighborhoods built in the area. If you haven’t been to Rose Avenue or Fairfield Drive off of Airport Road, you are missing out. These are post-World War II Cape Cods. I would assume 2-4 bedrooms, (I lived in one that was 4 bedrooms), on decent acreage. The neighborhood is mostly young families and older folks. Margaret Beeks Elementary, Virginia Tech, the Huckleberry Trail, and shopping are within walking distance of the neighborhood. The only reason I left that neighborhood is because we were renting and I wanted to buy.
But even that neighborhood is going up in price.
Meanwhile, there has been a demand for “young professionals” housing. If you look at the development proposed for Country Club Drive, you will see in the application they want to appeal to young professionals, medical staff, and first responders (BTW, many police don’t want to live in the town they work in).
At the same time, part of the argument for Midtown Blacksburg was housing for “young professionals.” Townhomes are starting to sell there now. A young professional can get a townhome for $427,760 (3 bedrooms, 2.5 baths, 1504 square feet) to $627,268 (3 bedrooms, 2.5 baths, 2487 square feet). Condos and apartments I am sure will be cheaper, but also smaller, and more than likely not affordable. Maybe for a studio or one bedroom?
Other new homes in town are going for well over $500,000.
And there is more housing proposed for the old Rugby Field behind Margaret Beeks Elementary. Rumor has the prices at $400,000+. I believe it will be more on the + side.
Now what?
I don’t know. Honestly. There is no money to be made in $250,000 homes. Not to mention how quickly they will be snatched up. I personally am not a fan of townhomes, condos, or apartments. I would like the affordable housing to be single family homes. I would also love world peace and a Hokies national championship.
What are your thoughts on this?
Lisa Sedlak 