PULLMAN, Wash. — Washington’s resale housing market set a new sales record in 2001, thanks to affordable mortgage rates that offset economic uncertainty and job cutbacks, according to the latest statistics released by the Washington Center for Real Estate Research at Washington State University.
“About 125,000 homes were sold last year, 5,000 more than in 1999, the previous record holder,” said Glenn Crellin, WCRER director. That’s a strong market, even though from October through November 2001, home sales in 14 counties, including King and Snohomish, took a dip from the same period in 2000. In the fourth quarter of 2001, 27,430 homes were sold in the state. The median sales price for an existing home in Washington was $178,200 during the fourth quarter, 0.5 percent higher than in 2000. The WCRER report noted that King County had the highest median price — $260,000, while Pacific County retained the lowest median of $77,000.
“Housing affordability improved in late 2001, helping potential buyers to ignore discouraging economic news and concentrate on their personal opportunities to improve their housing,” said Pili Meyer, 2002 president of the Washington Association of Realtors. Slower increases in prices, low mortgage rates and continued increases in incomes, despite the recession, resulted in a surge in housing affordability.
The housing affordability index, which measures the ability of a middle-income family (two or more persons related by blood, marriage or adoption) to purchase a median-price home with a 20 percent down payment on a 30-year mortgage at prevailing interest rates, reached 135.1. That means a typical family could afford to purchase a home priced 35 percent higher than the median. Housing was rated as affordable in every county in the state except Jefferson during the quarter. Usually, several communities fall below that mark.
Gains in home ownership can only be achieved if renters can afford to become home owners, said Crellin. “Affordability conditions improved significantly compared to last year and last quarter for first-time buyers,” he said. The statewide first-time buyer index stood at 80.8 during the fourth quarter, the highest level observed since WCRER began computing the measure several years ago. The index was above 90 in 17 counties, meaning that a small increase in downpayment, or purchasing a slightly less expensive home, would yield affordable ownership in many parts of the state, including the Spokane, Tri-Cities, Vancouver, Yakima and Olympia metropolitan areas.
WCRER and WAR have produced these statistics since early 1994, timing each quarterly release to coincide with wire releases of existing home sales, by state and median home prices and metropolitan area, from the National Association of Realtors. The latest sales data for every county, and median home prices and affordability, are reported for 34 of Washington’s 39 counties on the WCRER Web site at www.cbe.wsu.edu/~wcrer/ .