Washington home sales continue to slide

The median price of a home sold in

Washington during the third quarter carried a price of $314,000. The resulting 4.4 percent increase in median prices represents the slowest year-to-year increase since the first quarter of 2002. The modest national decline in median price resulted in a national median of $220,800 during the July-September period. Reduced sales activity combined with increased numbers of homes available for sale produced a more balanced market in

Washington. This means consumers have more homes to choose from, allowing them to select a home that really meets their needs rather than feeling pressured to purchase the first home they see.

Dennis Rose, 2007
p
resident of Washington
REALTORS®, said, “Increased choices allow buyers to negotiate a bit on prices and still take advantage of mortgage interest rates which are only slightly above the lowest levels seen in 40 years. Waiting for potential declines in prices may well be met with higher interest rates which produce payments that don’t reflect significant savings compared to purchasing today.”

Significant variations in both home sales and prices remained apparent across the state. Only four counties (Benton, Franklin, Kittitas, and Lewis) recorded more home sales during the third quarter than a year ago. Meanwhile in the counties reporting slower sales activity, the drops ranged from 1.7 to 47.6 percent. Among the most urban areas, annualized sales activity was below the second quarter in all 17 metropolitan counties, with declines ranging from 1.2 percent in
Franklin
County to 18.9 percent in

Pierce
County. As always,
King
County had the highest sales rate (29,260) while
Garfield and
Columbia counties in
Eastern Washington both recorded sales rates less than 100 homes sold. 

Median prices ranged from $104,300 in
Adams
County to $585,000 in

San Juan
County. Among the urban markets the range was somewhat less, from $154,100 in
Asotin
County to $472,000 in

King
County. In terms of price changes compared to a year ago, the median price declined by 8.3 percent in Pacific County comparing third quarter 2007 to a year earlier (Jefferson County was the only other market with a small decline).

At the other extreme, the median price in

Okanogan
County was 35.0 percent above a year ago. Having small counties with the most extreme changes in both volumes and prices is not unique; it is a reflection of small samples producing wide swings. Among the population centers, the increase in median prices ranged from a low of 0.7 percent in
Skagit
County to a high of 15.0 percent in

Yakima
County. It must be emphasized, however, that the change in median prices should not be referred to as an appreciation rate. “During a slowing market consumers tend to take advantage of their increased bargaining power as purchasers to secure bargains which allow them to purchase more house than would have been possible a year earlier, meaning part of the increase in median must be attributed to quality improvements,” Glenn Crellin indicated.

WCRER completes these market statistics with measures of the ability of typical families to purchase typical homes, measured through the Housing Affordability Index. The statewide all-buyer index stood at 81.8 for the third quarter, marginally less affordable than last quarter or a year ago. This means that a median income family has a little over 80 percent of the income required to qualify for a mortgage on a median price home. Local affordability measures ranged from 160.3 in
Adams
County to 39.1 in

San Juan
County.

More critical to the long-term health of the housing market is the ability of potential first-time buyers to enter the ranks of homeowners. The companion first-time buyer affordability index assumes a lower purchase price, a lower income incorporating the fact that most higher-income households are already homeowners and the fact that single persons (who are excluded from the family income statistics) are more likely to be potential buyers. The statewide measure was 48.2, meaning that the typical would-be homebuyer has less than half the income needed to qualify for a mortgage on the typical starter home.  Again the statewide measure was a little below last quarter and a year ago. The range in first-time buyer affordability measures was from 108.0 in
Adams
County to 23.1 in

San Juan
County. The metropolitan range was from 92.9 in
Benton
County to 36.1 in

King
County.

WC
RER has produced these 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.

Third Quarter 2007 Housing Market Snapshot online at:   https://www.business.wsu.edu/overview/news/Documents/CB%2011.21.07%20Home%20Sales%20Snapshot_07q3.pdf