PULLMAN, Wash. — Unstable stock markets, higher mortgage interest rates,
the fifth consecutive quarter of declining housing affordability and typically
unsettled winter weather combined to produce mixed results in Washington’s
housing markets during the first quarter of 2000. According to statistics
released today by the Washington Center for Real Estate Research at
Washington State University, both the numbers of homes sold and the selling
prices diverged widely across the state.
The statistics, which are produced in cooperation with the Washington
Association of Realtors, indicate the total resale housing market in the state
was virtually unchanged from a year ago, recording a slight 0.2 percent decline
to 24,350 homes sold between Jan. 1 and March 31.
This stable statistic concealed wide local variations however, with 10 of the
state’s 39 smaller counties recording increases in activity of at least 10 percent
compared to 1999. Meanwhile, two other small-population counties
experienced double-digit decreases in home sales over the same period.
“Most of the state’s population centers reported modest declines in home
sales, as consumers wait to see where the economy is headed” said Glenn
Crellin, WCRER director.
The median home price during the quarter was a record $174,700, 4.5 percent
higher than last year. The highest median was $245,000 in King County, which
was joined by San Juan, Snohomish and Jefferson counties as the only areas
with reported median prices higher than the state. The lowest median was
$63,000 in tiny Wahkiakum County. Wide local variations were also evident in
terms of price changes: 21 counties reported higher prices, while prices were
lower than a year ago in 14 counties.
“Higher home prices and mortgage rates offset continued income gains,
resulting in diminished housing affordability for the fifth consecutive quarter,”
said Crellin. The Housing Affordability Index, which measures the ability of a
middle-income family to purchase a median price home at current interest rates
stood at 108.4. An index of 100 means a median income family can barely afford
the home purchase, and higher values mean greater affordability.
Jefferson and San Juan counties recorded the poorest affordability conditions
this quarter, while housing was most affordable in Wahkiakum and Lewis
counties. “For households hoping to purchase their first home in Washington,
the first-time buyer index stood at 65.2, indicating that it is increasingly difficult
to become a home owner, despite the euphoria surrounding government
statistics indicating the homeownership rate is at record levels,” said Crellin.
“The typical renter who desires to become a homeowner in Jefferson and San
Juan counties currently has less than half the income required to purchase a
typical starter home in those communities,” indicated Phil Souza, Bellevue real
estate broker and 2000 president of WAR.
WCRER and WAR have been producing these statistics since early 1994, with
quarterly releases designed to coincide with wire releases of existing home
sales by state and median home prices by metropolitan area from the National
Association of Realtors.
In addition to these statistics, WCRER produces two real estate oriented
columns available for use by the media each month, compiles information of
apartment and commercial real estate markets throughout Washington, and is
researching new measures of access to affordable ownership housing by
households at various income levels. WCRER also monitors real estate
brokerage industry developments and conducts periodic studies on policy
topics of interest to the real estate industry. During 2000, this research will
focus on growth management issues.
Note to Editors: The First Quarter 2000 Housing Market Snapshot data are
available on a spreadsheet. Please call Glen Crellin to obtain a copy.