PULLMAN, Wash.—Washington’s housing market remained on a high plateau during the first quarter of 2004, with existing home sales virtually unchanged from the first quarter of last year—just 30 fewer sales than the record pace set in early 2003, according to statistics prepared by the Washington Center for Real Estate Research at Washington State University.
“Continued low mortgage rates kept buyers in the market, and a combination of high activity and scarce saleable inventory pushed prices up rapidly,” said Glenn Crellin, WCRER director. Reflecting the strong sales, the median price resale home sold during early 2004 jumped 8.3 percent, reaching a median of $210,600.
That median sales price is a record level. Half of all homes sold during the quarter were less expensive than this median, but the increase suggests housing prices are still rising more rapidly than overall inflation. The highest median was $302,500 in King County—four times the $75,000 median recorded in Adams County. Six counties have median prices below $100,000, while five had a median of at least $200,000.
First quarter home sales totaled 32,010 units statewide, seasonally lower than the previous quarter. Quarterly sales were above 2003 levels in 27 of Washington’s 39 counties and were up by at least 10 percent in nine counties. This is an impressive number of increases since the 2003 value was a record first-quarter, said Crellin. Total building permit statistics were significantly above a year ago during the first quarter, with both single-family and multifamily construction performing well.
Mike Flynn, 2004 president of the Washington Association of REALTORS®, added, “Supply remains the biggest issue in housing today. Despite solid construction, there are too few homes on the market to prevent strong demand from pushing up prices. To keep Washington housing affordable and maintain our quality of life, we need to remain vigilant to promote economic growth and ample housing construction.”
Crellin said that the Housing Affordability Index increased modestly to 137.3, meaning the typical family could afford to purchase a home priced 37 percent higher than the median. The index 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 down payment. The primary factor keeping housing affordable was low mortgage rates, but the general expectation is for higher rates in the months ahead.
“Affordable housing for individuals seeking to purchase their first home is especially challenging,” Crellin said. Housing affordability for those would-be first-time buyers improved during the first quarter, with the related Affordability Index of 80.1. While this indicates that the typical homebuyer looking for a starter home would come up a little short, achieving home ownership has always been challenging, he said. Significantly, the First-time Buyer Affordability Index is above the magic 100 level in 17 counties. However, the index is decidedly lower in the major urban areas of western Washington—all first-time buyer measures from Bellingham to Olympia are below 100.
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 REALTORS®. On the WCRER Web site at https://www.cbe.wsu.edu/%7Ewcrer/ sales data is available for every county, median home prices and affordability are reported for 36 of Washington’s 39 counties, and the first quarter “snapshot” is posted.
