The Hensleys have plenty of company in their quest for an affordable home as prices climb faster than wages for many low- and middle-income residents across Northwest Florida, especially for new homes.

PACE — In January, Cara and Ben Hensley began searching for a four-bedroom, two-bath house to call home.

The couple in their early 30s sold the first house they bought in February to upgrade to a larger one. It turned out to be more difficult than they expected, especially in the $100,000 to $140,000 price range.

So far, the Hensleys have put offers on four houses in Pace and had two accepted. However, both homes required more repairs than they could afford.

Ben works at Pensacola Christian College while Cara stays home with their three children — 5-year-old son Oliver, 3-year-old daughter Rose, 1-year-old daughter Gwen and another daughter due in January. She home-schools her kindergartner, Oliver.

The family and their two dogs borrowed a camper to live in until July. Then they moved into a house in Milton that Ben's parents bought for their retirement.

“I can hear my mom saying, ‘You never should have done this,’ ” Cara said. “We want a four-bedroom house with a yard the kids can play in in a nice neighborhood. I keep telling myself to have enough patience. Eventually, something will pop up and we’ll be the first ones who grab it.”

The Hensleys have plenty of company when it comes to hunting for houses while prices climb faster than wages for many low-and middle-income residents across Northwest Florida, especially for new homes.

Hard to find homes to buy

David Peaden, executive director of the Home Builders Association of West Florida, pointed out that the number of homes for sale in Santa Rosa County dropped 57% since 2010 and that rising house prices hit hardest the 30.7% of those who earn less than $40,000 a year.

“When home prices rise, a segment of the population gets pushed to the sidelines,” Peaden said. “The fallout includes overcrowded housing units, and forced reductions in spending for food, clothing, health care and retirement savings.”

When it comes to building cheaper new homes — ones under $175,000 in 2019 — there just aren’t any, according to Market Graphics Research Group. Santa Rosa County in the Milton, Pace and Jay areas has 33 for sale; Okaloosa County in the Crestview area has 30; and Walton County around DeFuniak Springs has five.

None has been built in Bay County, which is recovering from Hurricane Michael.

Keith Furrow, of Keith Furrow & Associates Realty in Gulf Breeze, said Santa Rosa County has a lack of housing to sell. He has experienced about a three-week supply of existing homes for sale and only a one to two-week inventory of new construction.

“It’s getting very difficult to find buildable lots that are affordable to build on and to compete with the national brands,” Furrow said.

Those in the home building industry in Okaloosa and Walton echo Furrow's findings.

Nina McCaslin-Horn, president of the Emerald Coast Association of Realtors, said she expected the need for more home construction in the area because first-time home buyers, retirees and investors like the natural beauty, pristine beaches and top-notch education system, among other attractions.

“People love the lifestyle of living and working at the beach,” McCaslin-Horn said. “It’s a good, clean lifestyle and slower pace.”

Cathy Alley, a Niceville Realtor for 25 years and a newly elected city councilwoman, said inventory is “way down” and affordability is “very difficult.” She pointed to the 1,100-acre Deer Moss Creek mixed-use development that includes 100 luxurious new homes in the first phase, as well as a 305-unit upscale apartment complex.

“We have a brand new subdivision going in but it’s not affordable housing,” Alley said. “That’s the problem. I don’t see anything affordable around Niceville anytime soon.”

The obstacles to more single-family housing inventory have occurred for various reasons, such as residents from hurricane-torn Bay County moving west, the need to install utilities along U.S. Highway 331 to improve development, the clearing up of traffic on State Road 85 with a Crestview bypass approved in June, and a general lack of construction labor.

Alan Baggett, executive vice president of the Building Industry Association of Okaloosa & Walton Counties, said solutions are in the pipeline.

“We have a lot of pressure being put on us,” Baggett said. “We can’t do these things fast enough, but they’re coming.”

Housing costs balloon

The Joint Center for Housing Studies at Harvard University said the national median home price rose 41% faster than overall inflation from 1990 to 2016.

Edwin Henry, who primarily builds subdivisions in Santa Rosa County, recalled the first 1,200-square-foot home he ever sold cost $28,500 in 1979. Today, the average home sells for $265,949 in the county.

“I never thought I would see that,” Henry said.

Most of the homes built in 2019 in Santa Rosa fit the $225,000 to $275,000 price range, with those totaling 694 of the 1,538 completed, Market Graphics reported.

Market Graphics also looked at the rest of Northwest Florida. It found Okaloosa had 699 of its 856 new homes completed and sold at $225,000 to $275,000. Meanwhile, the Destin area had 23 finished and put on the market at $425,000 to $625,000.

In Walton County, 221 new homes topped $925,000 along the coast, while 220 cost $625,000 to $925,000, and another 201 were priced between $425,000 to $625,000. North of U.S. Highway 98 and the northern end of Walton had 231 of the county’s total of 1,398 new homes built for a more affordable $225,000 to $275,000, Market Graphics said.

Meanwhile, Bay County had 330 of its 908 new homes completed in the $225,000 to $275,000 range, with the southwest end — farthest away from Hurricane Michael’s landfall — adding the most new homes, the research shows.

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Importance of attainable housing

Henry said another reason for rising home prices includes the fact that about 75 of the 500 licensed home builders in Santa Rosa County survived the 2008 downturn in the housing market. Of those, the top 10 builders account for 65% of new home construction, said Henry, a past president of the Home Builders Association of West Florida.

Additionally, he blasts local officials for slowing down the building process. In fact, governments at all levels account for 24.3% of the final price of a new single-family home, the National Association of Home Builders has reported.

“It takes so long to get a subdivision approved now,” Henry said. “It’s a really big obstacle. The county brings up issues that are not in the Land Development Code. It’s really frustrating.”

NAHB Chairman Greg Ugalde calls for policymakers to roll back inefficient zoning rules, costly impact fees and outmoded land development regulations that are driving up housing costs. Four out of five American households believe the nation is suffering a housing affordability crisis, according to a nationwide survey of 19,800 adults conducted by Morning Consult on behalf of NAHB.

“Housing affordability is near a 10-year low and this poll confirms the challenges hard-working families face to keep housing within reach as rising costs continue to outpace wage growth,” Ugalde said.

However, despite the shortages and higher costs, demand for workforce housing in both secondary and new markets remains strong. That’s thanks to the Federal Reserve cutting interest rates twice this year. The rates now hover around 1.75% to 2%.

Like Northwest Florida, lower-cost homes across the country are especially rare, according to Harvard's Joint Center for Housing Studies. It reported "nearly all the 88 metro areas with available data had more homes for sale in the top one third of the market by price than the bottom one third. In 46 of the metro areas, more than half of the available supply was at the top end of the market."

Bringing home prices in line with income and population growth is critical if places like Northwest Florida want to remain economically competitive and maintain a high quality of life.

Baggett understands this. He said strong Community Reinvestment Act housing programs that help low- and moderate-income borrowers is needed, as well as redevelopment of poor housing.

“The new buzz word is attainable housing,” he said.

Cara and Ben Hensley remain optimistic they will find a house that suits their growing family's needs.

“We always want to give our kids the best we can,” Cara Hensley said. “We will wait it out and we will find something. We have a little nest egg going that we can put into the next house.”