PULLMAN, Wash.–The closing months of 2000 leveraged continued strength of the state’s economy and lower mortgage interest rates into a stronger housing market than had existed a year earlier, according to a report prepared by the Washington Center for Real Estate Research at Washington State University.
A total of 28,350 resale housing transactions took place between October and December, an increase of 1.2 percent over levels for the same period in 1999. Housing construction, as indicated by residential building permits, also increased. The typical home price was reported at $177,400, 2.9 percent higher than the closing quarter of 1999.
The statistics, produced in cooperation with the Washington Association of Realtors, reflected a continued strong overall market. “Existing home sales in 2000 were the second highest on record,” said Glenn Crellin, WCRER director.
“Most local housing markets shared in the improvement,” said Cheryl Ferrier, a Bellingham real estate agent and 2001 WAR president. “National home ownership rates are increasing, and Washington households are worried that continued price increases will make it impossible to own a home if they don’t act quickly.”
Among Washington’s 11 urban counties, eight reported sales activity higher than last year, led by a 14.6 percent jump in Yakima County. Meanwhile, King, Kitsap and Thurston counties reported slower home sales, with the largest decline in the state’s most populous area. Among the more rural areas, the highly local nature of real estate markets was apparent, with some areas reporting significantly fewer sales than a year ago and others experiencing significant jumps in activity.
Median sales prices increased but at a rate that has slowed in recent months, indicating the market is finally stabilizing, said Crellin. The most expensive prevailing prices were in San Juan County with a $300,000 median. King County’s $250,000 median was the most costly urban area. The typical home sold in Pacific or Grays Harbor County was still less than $80,000.
“The best news, however, is that housing affordability continued to improve,” said Crellin. The typical family in Washington could still afford the median price home. WCRER uses the Housing Affordability Index first produced at the National Association of Realtors to measure the ability of a middle-income family to afford the typical home in their local market. Indices above 100 indicate the typical family could purchase a representative home. The all-buyer index of 114.8 indicates Washington residents have an income cushion of nearly 15 percent–greater than last quarter or last year.
For households hoping to purchase a first home in Washington, a first-time buyer index, which assumes a lower purchase price and a significantly lower income because it includes single-person households as well as families, stood at 68.3, indicating that it is still very difficult to become a homeowner. “Fortunately, housing affordability has also improved for first-time buyers compared to last quarter and last year,” said Crellin.
WCRER and WAR have produced the statistics since early 1994, timing quarterly releases to coincide with wire releases of existing home sales by state and median home prices by metropolitan area from NAR.
Note to Editors: A chart detailing the fourth-quarter state housing report by county is available online at http://www.cbe.wsu.edu/~wcrer in a PDF format.