Housing prices affect Columbia's cost of living

2 years 2 months 2 weeks ago Thursday, October 01 2015 Oct 1, 2015 Thursday, October 01, 2015 1:46:00 AM CDT October 01, 2015 in News
By: Annisa Budiman, KOMU 8 Reporter
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COLUMBIA - According to the Missouri Department of Economic Development's research center, Columbia has the highest cost of living in the state.

Missouri Economic Research and Information Center (MERIC) released the Cost of Living Data Series: Second Quarter 2015. The center took information from surveys done by The Council for Community and Economic Research (AACRA or C2ER). The council collects data three times a year through volunteer surveys completed by cities across the nation.

The indexes take into account grocery, housing, utilities, transportation, health, and miscellaneous costs. Within Missouri, Joplin had the lowest cost of living index for the year with 86.9.

Columbia's cost of living index was 97.5, surpassing St. Louis and Kansas City.

CEO of Columbia Board of Realtors Brian Toohey said the results were a surprise.

"I was surprised by Kansas City, not as much by St. Louis. St. Louis is lagged the rest of the country in terms of their home market coming back," he said. "But Kansas City has been doing well in the last few years, and Columbia as well."

He explained about factors that have affected the rise in the housing index compared to the 2011 index available on Columbia Chamber of Commerce's website.

"In Columbia we've had our home sales increase by 12.5% this year compared to last year at this time. We've also had extremely low housing inventories for buyers to choose from," he said. "So when you combine those two things, in addition with new homes, the price of building permits have increased substantially in the last couple of years. So all those three things are going to make the price of home increase in Columbia."

Toohey said house prices could potentially stay high depending on what the inventory levels do in the next six months. He said the inventory level is the amount of houses for sale at any given time. He said right now Columbia has 3.7 months worth of inventory where typically it should be five or six.

"This is something that the housing industry faces nationally," he said.

Although housing prices have gone up, Toohey said Columbia can still be considered affordable.

"It still is affordable now. We need to look to create more affordable housing for people, but it is still affordable," he said.

President of Columbia Chamber of Commerce Matt Mccormick said although Columbia has the highest cost of living index now with 97.5, numbers tend to fluctuate.

"For what it would cost $100, we're at about $97.50," he said. "The challenge with these cost of living is it's a snapshot in time so you really can't compare them from time to time. We could really fluctuate up and down depending on what we're looking at."

He said there are a lot of factors that can affect the fluctuation.

"A lot of things factor into it. Time of year factors into it. Also need, market demand. Right now things are going well from what we can tell," he said.

Mccormick said the cost of living categories are impacted by the market, the price, and the demand. He specifically talks about the growth of housing.

"Right now, we're also seeing a lot of growth in residential areas. We're seeing growth in housing sales. We're seeing growth in building. So there's a lot of good things coming out of that," he said.

Although it was a difference from the 2011 results posted on the chamber's website, Mccormick said the differences are to be expected.

"It goes back to it fluctuates. We do [the survey] three times a year," he said. "But it all depends on what's on those lists. Those services, those goods that we're taking a look at."

He said compared to other cities with similar landscapes, Columbia's cost of living is still reasonable.

"The other thing we also take a look at is like-communities. Communities that are like Columbia, university driven communities where university or education is their number one economic drive," he said.

He mentioned Gainesville, Florida, who had a similar community like Columbia, has a similar index with 96.7.

"So what we really try to look at is how we compare to like-communities across the nation," he said.

Mccormick said Columbia is still an affordable place to live.

"Columbia is a very, very affordable place to live in," he said. "We have a very diverse, if we stay on residential for a second, we have very diverse housing from everything from starter houses on up. And so there's a lot of that diversity if you will for people to get their services, to get their goods, to find their place to live."

Mccormick mentioned with the amenities Columbia has to offer, it is still a very affordable place to live in.

"That's also one of the things that you also have to take a look at is that lifestyle," he said. "We have some wonderful arts here that you don't have in other communities."

Lucky's Market store director Andy Weis said Kansas City was much more expensive to live in.

"I just moved from Kansas City where a two-bedroom was over $800 and I have a two-bedroom in Columbia for $600," he said.

He said in terms of grocery prices, Lucky's has tried to keep prices down to be able to compete with other supermarkets.

Missouri was ranked the 11th lowest cost of living in the United States with an index of 91.6. This was a decrease compared to the 93.4 index in 2014.

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