The Washington Center for Real Estate Research (WCRER ) at Washington State University reported that median home prices, which had been stabilizing for a year, experienced a decline.
Statewide home sales increased 6.5 percent at seasonally adjusted annual rates from the fourth quarter of last year to 88,490 units. This is, however, a sales rate 4.6 percent below that of a year ago.
Glenn Crellin, WCRER director, said 27 of Washington’s 39 counties had increasing sales activity compared to the prior quarter, but that 25 areas also saw a slower sales rate than a year ago. While smaller counties reported some of the most dramatic percentage changes, small numbers of sales magnify the changes.
Among the counties identified as metropolitan areas, the biggest improvement from late 2010 was recorded in Chelan County (Wenatchee), which saw a 25.5 percent increase in sales, followed by Spokane County with a 20.1 percent jump. At the other extreme, sales declined 18.2 percent in Asotin County (Lewiston, Idaho-Clarkston, Wash.) and 9.1 percent in Thurston County (Olympia).
Cheaper homes spur sales
“Some of the market strength clearly was driven by bargain hunting as buyers saw increasing mortgage rates and a large inventory of distressed properties offering an opportunity to purchase homes at a significant discount,” Crellin said.
The median sales price during the first quarter was $228,200 – 7.2 percent below the year ago median. This is the most significant median price decline since an 8.5 percent drop in the fourth quarter of 2009. Prices have declined compared to a year earlier for the last 13 quarters, with the statewide median now below the first quarter 2005 level.
Median prices ranged from a high of $442,500 in San Juan County (King County was nearly $100,000 less) to a low of $120,000 in Adams County. In terms of price changes, the largest increase in median compared to a year ago was 87.5 percent in Lincoln County, while the largest decline was 17.6 percent in Whitman 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 1.6 percent in Whatcom County (Bellingham) to a decline of 12.2 percent in Snohomish County.
Affordability index at record high
The price declines were coupled with very modest increases in mortgage interest rates, making homes quite affordable for households with good credit and reliable jobs. The housing affordability index statewide stood at a record high 152.0, meaning the median income family had 52.0 percent more income than the bare minimum required to qualify to purchase a median price home with a 20 percent downpayment and a 30-year mortgage.
Phil Harlan of Olympia, 2011 president of the Washington Realtors, noted: “Tremendous opportunities for first-time and repeat homebuyers alike are present in all Washington communities, and as interest rates continue to rise, payments on homes purchased today will likely be lower than purchasing a home for less in a few months but at higher mortgage rates.”
Affordability remains a challenge for first time homebuyers, however. Like the All-Buyer Index, the First-Time Buyer index reached a record high of 84.4 in the first quarter. First-time buyer affordability measures ranged from a low of 40.5 in San Juan County to a high of 114.5 in Cowlitz County (Longview). The typical starter home was affordable to the typical first-time buyer in 12 counties. Among urban counties first-time buyer affordability ranged from the high in Cowlitz County to a low of 65.5 in Whatcom County.
WCRER produces these statistics in partnership with the Washington REALTORS®. 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, median home prices and affordability data are available for each of Washington’s 39 counties.
First Quarter 2011 Housing Market Snapshot online: http://www.business.wsu.edu/overview/news/Documents/2011.05.10.WCRER_Snapshot_2011Q1.pdf