Washington Housing Market Stabilizing

PULLMAN, Wash. — Data prepared by the Washington Center for Real Estate Research at Washington State University indicate a steady housing market statewide during the third quarter 2000. The number of existing homes sold were a scant 0.1 percent below a year ago; residential building permits were up (but only by 2.0 percent); and home prices increased by 5.3 percent over the last year, only a little more than inflation.

The statistics, which are produced in cooperation with the Washington Association of Realtors, reflects a continued strong overall market. “Marginally lower interest rates helped offset the impacts of higher prices, offering buyers a reason to remain active in the housing market,” says Glenn Crellin, WCRER director.

“Real estate professionals know that housing markets are very local,” says Phil Souza, a Bellevue real estate broker and 2000 WAR president. “These data reinforce that fact as some communities reported stronger home sales while the adjacent jurisdiction may have experienced somewhat of a slowdown.”

Greater Seattle provides a case in point. Sales activity declined 0.9 percent in King County, but increased by 9.6 percent in Snohomish County to the north and by 2.4 percent in Pierce County to the south. Meanwhile, all the urban markets in eastern Washington saw home sales activity slip below levels of a year ago, declining by 5.3 percent in Benton/Franklin counties, 3.8 percent in Yakima County, and 2.6 percent in Spokane. Rural areas throughout the state, because they generally have relatively few sales, were mixed — some were higher, some lower, with larger percentage changes but small changes in the actual number of homes sold, says Crellin.

Median sales prices, closely watched by homeowners and potential homebuyers, recorded a statewide level of $176,900 during the quarter. The highest median price was $280,000 in San Juan County, with King County’s $249,000 being the second most expensive. The lowest median prices were $76,000 in Pacific County and $80,000 in Grays Harbor County.

“The best news is that housing affordability increased for the first time in two years,” reports Crellin. The typical family in Washington could still afford the median price home. The all-buyer index of 110.4 means their ability to purchase a typical home increased from a 107.3 index last quarter, although it is still below a year ago. The spike in home prices rewarded San Juan County with the poorest affordability index in the state, while Asotin County was credited with the most affordable ownership housing.

For households hoping to purchase their first home in Washington, the first-time buyer index stood at 65.7, indicating that it is still very difficult to become a homeowner. “While home ownership rates in Washington are increasing, it will be difficult to achieve future gains in the face of these affordability estimates,” says Crellin.

WCRER and WAR have been producing these statistics since early 1994, with timing of quarterly releases designed to coincide with wire releases of existing home sales by state and median home prices by metropolitan area from the National Association of Realtors.

Anyone interested in a spreadsheet showing the third quarter results should contact WCRER by phoning Crellin at 800/835-9683, or by checking the WCRER website at www.cbe.wsu.edu/~wcrer.