PULLMAN, Wash. — Sales of existing homes in Washington crept up 1.5 percent during the third quarter of 2002 compared to a year earlier as continued low mortgage rates offset the highest unemployment in the nation, reported the Washington Center for Real Estate Research at Washington State University.
There were 34,710 homes sold from July through September–500 more than the same time last year. That keeps housing a bright spot in the state’s economy, said WCRER Director Glenn Crellin.
“If a family believes its employment and income is in no serious jeopardy, interest rates which are lower than any time in the past 40 years make it difficult not to consider buying that first home or moving toward your dream house,” said Crellin, explaining the continued strength. Markets where home prices have been increasing slower make housing a special bargain, while in more costly markets the reality that once interest rates increase the homes will truly be beyond the budget convince would-be consumers the time to act is now.
The low interest rates combined with rising incomes to offset price increases, resulting in a statewide housing affordability index of 135.8, a record level since WCRER began computing the measure in 1994. The index implies that a median-income family could afford a home priced about 36 percent above the state’s median price of $191,600.
The all-buyer index, however, assumes a 20 percent down payment, a financial impossibility for most first-time buyers, who both lack cash and typically have incomes below the median. WCRER’s first-time buyer affordability index assumes a lower down payment, lower income and a less expensive home. While the resulting index indicates that the typical renter at that income level could not afford the typical starter home in their community, the gap has declined. The index during the second quarter was 81.5, compared to 74.7 a year ago.
“With the affordability of starter homes at record levels, first time buyers are looking for houses in droves all over the state,” said Pili Meyer, a Port Angeles realtor and 2002 president of the Washington Association of Realtors.
Crellin emphasized that real estate remains highly localized, with many counties, especially the greater Seattle area, reporting sales levels lower than a year ago. In fact, without the strength in the smaller counties, the sales rate would have declines. Among the state’s urban counties, Island, Pierce, Spokane, Whatcom and Yakima were the only ones reporting a more active market than a year ago.
The highest home prices were reported in San Juan County, followed by King and Snohomish counties. Each of these areas reported median prices above the $200,000 level. It must be emphasized, however, that half of the homes in each county are sold at prices below the median, Crellin said. There are still nine counties in Washington where most homes sell for less than $100,000, with six of those counties – Pacific, Ferry, Pend Oreille, Stevens, Adams and Grant — recording prices in the $80s.
WCRER and WAR have worked together to produce these statistics since early 1994, timing each quarterly release to coincide with wire releases of existing home sales by state and median home prices by metropolitan area from the National Association of REALTORSÂ®. Sales data is available for every county, and median home prices and affordability are reported for 34 of Washington’s 39 counties. Visit the WCRER Web site at http://www.cbe.wsu.edu/%7Ewcrer/ for more information.