What is Area Median Income (AMI)?

To understand the Methow Valley’s housing needs it’s important to understand the concept of “Area Median Income (AMI).”

Area Median Income describes the household income at which 1/2 of the community makes less, and 1/2 makes more.

We often talk about “Percent of AMI” to refer to household income, as it relates to the rest of the community.

Below is the estimated income distribution for the Methow Valley.

 

A Summary of the Methow's Housing Market...

Housing is (increasingly) expensive in the Methow Valley

Up until 2018, market homeownership remained in reach for those that live and work in the Methow Valley.

Since 2018, house prices have outpaced wages 4:1.

 

There is an (increasing) shortage of housing for full-time residents.

In 2023, the Methow Valley was (and remains) short approximately 436 units of housing for full-time residents.

Driven only by market forces, this gap will continue to grow, commensurate with the gaps in our current housing Market:

 

The Methow’s Housing Market is driven by outside competition

To afford the median home price ($663k - see above), one must make at 2.5x-3x Area Median Income, which only accounts for 3% of the full-time residents of the Methow Valley.

This describes a housing market with “Inelastic Demand” - meaning that the demand will not diminish, even with large price increases… as we have seen.

Which means that it is critically important that, when we create additional supply of housing in the Methow Valley, we think about who we are building for, and what long-term “housing conservation” tools can be utilized to ensure that enough of the housing supply that is created remains affordable and available for full time residents, forever.

 

What are the demographics of the Methow Valley?