A two-year-old wage study shows few workers in Lake Havasu City can afford to buy the average home.
The Lake Havasu City, AZ. Area Wage & Fringe Benefits Survey was compiled by the Pathfinders of Dallas, an economic development and corporate site-selection consultant firm, in September 2006, at the request of the Partnership for Economic Development.
“It’s about time to update it, about every two years,” said PED President and CEO Gary Kellogg. “And this time we need more participation.”
The survey shows 81 firms participated in the survey but many of the individual job sectors only had one firm participate — such as auto sales — which Kellogg said leads to results being less than accurate when it comes to the entire community.
Participating employers were asked to report low, average and high entry-level pay. That led to a determination of low average, high average, mean average and weighted average which balances employers of a number of people with those employing few in the same job classification.
Of the 103 job classifications listed in the report, 20 fell below a weighted average wage of $10 per hour, generally the jobs considered entry level. Such as janitor, childcare worker and bartender, bus and wait staff at restaurants and bars.
Another 20 job classifications were reported with a weighted average wage of $20 per hour or more. Including president/CEO/owners with the highest a weighted average wage of $64.83.
Using the May 2008 report by the Lake Havasu Association of REALTORS, of homes sold in Lake Havasu City, few of those earning in excess of $20 per hour can afford a mortgage for the average home in the city.
Using the Ginnie Mae (Government National Mortgage Association) loan calculator with the weighted average wage of $31.67 and zero debt, a Lake Havasu City teacher should look at a mortgage of no more than $212,756. That’s almost $30,000 less than the $232,217 average sales price of home in the city in May.
Lenders generally won’t lend when the housing costs (loan, insurance, taxes) exceed 28 percent of monthly income. And total debt shouldn’t exceed 36 percent.
Compounding the problem is that few workers in every field are without debt. And a quarterly study of the cost of living shows Lake Havasu City runs higher than the national average in a number of categories.
The Cost of Living Index compiled by the Council for Community and Economic Research measures the relative price levels for consumer goods and services in participating areas.
Those areas are averaged and the individual communities are compared to that baseline.
In six categories during the first quarter of 2008, the Lake Havasu City-Kingman Metropolitan Statistical Area exceeded the baseline in three — running 8.4 percent higher on grocery items, 39.7 percent higher on housing costs and 0.3 percent higher on transportation.
Utility costs in the Lake Havasu City run 7 percent below the national average, while health care is 5 percent cheaper, and miscellaneous goods and services are 0.1 percent below.
Lake Havasu City participates in the study each quarter through the PED.
Mohave County Supervisor Buster Johnson, R-Dist. 3, said there are two moves the county and city can make, one to offset the lower salaries now and the other to bolster salaries in the long term.
“We need to look at some community housing, available to our police, fire, teachers, those essential service people. I tried to bring some in six years ago but no one was interested and instead it went to Parker,” Johnson said. And we really have to push industrial economic development, like along the I-40 Industrial Corridor, to get better paying jobs. That will lift other salaries when they compete for employees.”