The Scranton/Wilkes-Barre metro area was ranked among the most affordable housing markets in the nation in a study by the National Association of Home Builders and Wells Fargo.

The study’s Housing Opportunity Index measures the percentage of homes sold that could be afforded by families earning the median income.

In the Scranton/Wilkes-Barre area, 81.5 percent of homes sold in the third quarter were within reach of a household earning the median income of $52,500 annually. By comparison, those earning median income in the nation’s least affordable market, Los Angeles, could afford only 3.7 percent of homes sold.

The news came as little surprise to those in the local real estate industry and academics, who note that the region has always been a place where moderate-income households could afford the American dream.

The region has a large number of lower-priced, older housing stock in valley areas. A recent slip in home prices and continued low interest rates have boosted affordability even more. Last week, the Freddie Mac average interest rate on a 30-year, fixed-rate mortgage was 6.1 percent.

Anthony Liuzzo, Ph.D., grew up in the Bronx and lived in New Rochelle, N.Y., before relocating to Northeastern Pennsylvania 17 years ago to be a business professor at Wilkes University. He bought a 3,000-square-foot home in the area for less than he sold his 2,000-square-foot New York home for. Things haven’t changed much since, he said.

“For $250,000 here, you are getting a very nice home,” he said. “You go to New York, Northern New Jersey or Philadelphia, that gets you a bottom-of-the-line home.”

Attracting interest

The values haven’t gone unnoticed by those who live in those high-cost areas.

Housing affordability is fueling the population turnaround in Northeastern Pennsylvania, said Teri Ooms, executive director of the Wilkes-Barre-based Joint Urban Studies Center, a think tank supported by local colleges. That growth will result in higher rents and housing prices over the next three to five years, she predicted.

Her office’s research showed affordable housing is attracting a broad demographic at several income levels, a trend that helped Lackawanna and Luzerne counties gain population in 2006, the first year in decades that both counties did so.

“We are seeing real population gains and in-migration that will in time drive up housing costs,” she said. “This will expand our tax base, provide a work force and grow the economy. We are on the cusp of something great.”

The most difficult audience for local real estate agents to convince about the market’s affordability are local people, said Steve Farrell, owner of Classic Properties in South Abington Township.

“So much negative stuff is being said about the national market, but a lot of that doom and gloom isn’t happening here,” Mr. Farrell said. “Buyers from New Jersey, Connecticut and New York City come here and know it’s a deal.”

Back to reality

Prices are nudging down a bit, however, from speculative highs, something Mr. Farrell described as a “return to reality.” Inventories are bulging, and tightening credit standards have reduced the ranks of buyers, all threatening the pace of home sales in the short term.

Dr. Liuzzo said house prices will climb again, given the data from Housing Opportunity Index. He concludes that wages have increased faster than home prices, putting more people in reach of homeownership. That sets the stage for house prices to climb again.

Given continued low interest rates and future price increases, he thinks it’s a good time to buy. Even those upgrading may lose on the sell side, but gain on the buy side.

Michelle McCormack, president of McCormack Mortgage Services Inc. in Clarks Summit, is not surprised by the ranking. While national housing prices boomed in recent years and are now in decline, local housing never saw the explosion of prices.

“Without the rapid rise, we aren’t seeing a dramatic fall,” she said. “Prices have regulated, and that’s just giving people more house for their money.”

Contact the Writer: dfalchek@timesshamrock.com