If housing prices are causing sticker shock where you live, maybe it's time to take a look at Lima, Ohio.

According to a study released by the National Association of Home Builders/Wells Fargo Housing Opportunity Index, Lima, population approximately 250,000, ranked as the nation's most affordable housing market for the third quarter of 2004.

The study also revealed a not-so-surprising fact: housing affordability has declined substantially since the beginning of last year.

"Despite some of the best financing conditions in decades, housing affordability at the national level has fallen to the point that only a little more than half (50.4 percent) of all homes sold in this country during the third quarter of 2004 were affordable to families earning the median U.S. household income," says NAHB President Bobby Rayburn, a home and apartment builder from Jackson, Miss.

"This compares to about 61 percent of homes sold that were affordable to median income earners in the year's first quarter."

Sky-rocketing housing prices caused strong appreciation and outpaced income growth in many areas, leaving working families struggling to afford a home.

"Ultimately, higher home prices are a matter of strong buyer demand. But a big contributor has been a shortage of land available for development due to growth controls, and the high cost of regulations in general. This includes everything from excessive impact and utility hookup fees to the price of long delays for subdivision approvals. Local jurisdictions that have curtailed production of affordable and workforce housing through excessive regulations should consider this a wakeup call," explains Rayburn.

Another expected fact revealed in the study: cities in California ranked at the top of the list among least affordable housing markets in the third quarter of last year. San Francisco, which has been ranked as the least affordable city for nearly a decade, was surpassed by the metro area encompassing Santa Barbara, Santa Maria and Lompoc. Those areas dropped significantly in affordability since the beginning of 2004. In the third quarter less than five percent of homes were affordable to those earning the median income of $64,700 -- a vast difference from the median home sales price of $447,000. However, in the first quarter, in those same areas, nearly 11 percent of homes sold were affordable to median-income earners. The median home price in the first quarter was $380,000.

If Lima, Ohio is sounding good right about now, listen to this. In the third quarter there, the median sales price of homes sold during that period was $82,000. That means that 90.5 percent of homes sold during the third quarter were affordable to families earning the area's median income of $52,500.

But even Lima home prices have been on the rise. The median home sales price in the first quarter of 2004 was $78,000 and home affordability was at 92.4 percent.

"All of the 10 least affordable housing markets -- and 19 of the 25 least affordable -- are in California, which is one of the most highly regulated areas in the country," says Rayburn.

And if you're wondering what happened to San Francisco -- it ranked 11th in the least affordable national housing market study. While the city continues to hold the title of the highest median home sale price of the 163 metro areas ranked, its high median household income of $95,000 helps keep San Francisco higher on the housing affordability list.

According to the study, here is a look at how the country did by regions:

Published: January 10, 2005

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Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com. Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success. Contact Phoebe at (858) 259-3646 or . Visit PhoebeChongchua.com for more information.