PULLMAN – Existing home sales during the fourth quarter of 2010 increased from the third quarter but remained well below the sales rate driven by tax credits a year earlier. Despite the stabilizing sales rate the median price was lower than a year ago, reported the Washington Center for Real Estate Research (WCRER ) at WSU.
Statewide home sales increased 17.7 percent at seasonally adjusted annual rates from the third quarter of the year to 83,070 units. This is a sales rate 21.5 percent below that of a year ago, when the tax credit program had just been extended and expanded.
Glenn Crellin, WCRER director, said seven counties saw slower sales rates compared to the third quarter and two small counties saw increased sales from a year ago.
During calendar year 2010, 84,890 existing homes were sold, an increase of 0.1 percent and the third consecutive year with about 85,000 sales. Sales levels have declined about 45 percent from the peak in 2005.
Among the 17 counties identified as metropolitan by the federal government, sales increased in all but Cowlitz County, which was unchanged compared to the third quarter. Increases ranged from a low of 3.6 percent in Spokane County to a high of 23.6 percent in Pierce County.
All nine counties classified as “micropolitan” saw increased sales activity. Meanwhile sales rates fell from the prior quarter in seven of the 13 rural counties.
The statewide median sales price during the fourth quarter was $239,000, 2.0 percent below the median a year ago. This was the lowest fourth quarter median price since 2004. The median price for all of 2010 was $246,300 – 1.6 percent below 2009 and 20.4 percent below the 2007 record.
Median prices ranged from a high of $495,000 in San Juan County to a low of $85,000 in Lincoln County, which is reported for the first time. In terms of price changes, the largest increase in median compared to a year ago was 29.8 percent in Wahkiakum County while the largest decline was 34.4 percent in Columbia County.
Since small sample sizes in these rural counties magnify the price changes, looking to urban areas presents a clearer picture. The range of price changes in metropolitan counties was from an increase of 9.4 percent in the Tri-Cities to a decline of 21.2 percent in Skamania County (part of the Portland metro area).
Crellin said 11 of the metro counties reported lower prices while six experienced price increases, but the increases might be attributed to buyers finding bargains in higher-priced homes.
Mortgage interest rates continued to decline until very late in the year. When combined with the generally lower home prices and generally stable income statistics, they resulted in record high housing affordability. The all-buyer index reached 149.4, meaning a median income family had 49.4 percent more income than the bare minimum required to qualify to purchase a median price home with a 20 percent down payment and a 30-year mortgage.
“Mortgage rates are already beginning to rise and home prices are stabilizing. It would take big price declines to keep payments this low as mortgage rates return to normal levels,” said Phil Harlan of Olympia, president of the Washington Realtors.
Buying a first home remains a challenge, but the first-time buyer affordability index was a record high, reaching 83.6. Crellin said a first-time buyer index above 80 represents significant opportunities for well-qualified entry-level buyers to have choices of affordable homes in their communities.
The first-time buyer index remained below 70 in seven counties, however, while it was above 100 in 11 others.
WCRER has produced these statistics in partnership with the Washington REALTORS® since early 1994. Each quarterly release is timed to coincide with news releases of existing home sales by state and median home prices by metropolitan area from the National Association of REALTORS®.
Sales data is available for each county, and median home prices and affordability are reported for 38 of Washington’s 39 counties.
Click on the fourth quarter 2010 housing market snapshot here.