PULLMAN, Wash. — Despite a second year of economic uncertainty and rising levels of unemployment, the housing market in the state of Washington, as in the nation as a whole, set a new record in 2002, recording a total of 133,200 resale transactions according to statistics released by the Washington Center for Real Estate Research at Washington State University.
“This 6.3 percent increase in unit sales was driven by the lowest mortgage interest rates in a generation,” Glenn Crellin, WCRER director, said. “Total sales eclipsed the previous record set just last year.”
Fourth quarter home sales, compared to the same time last year was especially strong, with activity levels 20 percent higher than a year ago, Crellin said. However, part of the surge is due to the malaise which briefly descended on the housing market in the weeks immediately following Sept. 11. A total of 33,230 homes were sold during the last three months of 2002. The quarterly sales were also a record, marking the first time more than 30,000 units had been sold during a fourth quarter. Housing construction statistics indicate that home building was also strong during the closing months of 2002
The median sales price for an existing home in Washington was $188,600 during the fourth quarter, 6.1 percent higher than last year. The WCRER report noted that San Juan County had the highest median price ($297,000), while Pacific County retained claim to the lowest median, $82,800.
“Low mortgage rates propelled housing affordability to its highest recorded level in late 2002, encouraging potential buyers to ignore negative economic headlines and concentrate on their personal opportunities to improve their housing,” DeWayne Granacki, 2003 President of the Washington Association of REALTORSÂ®, said.
The housing affordability index, which measures the ability of a middle income family (two or more persons related by blood, marriage or adoption) to afford to purchase a median price home using a 30-year mortgage at prevailing interest rates (provided they had access to a 20 percent downpayment) reached 144.2, meaning the typical family could afford to purchase a home priced 44 percent higher than the median. Housing was rated as affordable in every county in the state except San Juan and Jefferson during the quarter. Typically several communities fall below that mark.
Gains in homeownership can only be achieved if renters can afford to become homeowners. “Affordability conditions improved significantly compared to last year and last quarter for first-time buyers,” reported Crellin. The statewide first-time buyer index stood at 86.5 during the fourth quarter, the highest level observed since WCRER began computing the measure. The index was above 100 in 11 counties and above 90 in nine additional counties, meaning affordable ownership housing options are available for first-time buyers in many parts of the state, including the Spokane, Tacoma, 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 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.
The Fourth Quarter 2002 Housing Market Snapshot is available on the WSU WCRER Web site at www.cbe.wsu.edu/~wcrer.