Washington Housing Remains Economic Star

PULLMAN, Wash. — Just as national statistics have indicated housing as a star of the economic scene, Washington’s housing market continued to outperform most other economic measures in the state, according to statistics released by the Washington Center for Real Estate Research at Washington State University.

A total of 36,380 resale housing transactions took place between April and June. While these months are traditionally busy for home sales, the activity recorded was nearly 7 percent higher than last year, said Glenn Crellin, WCRER director.

“The combination of affordable mortgage rates, low-down-payment mortgage programs and low unemployment, even if some job cutbacks were being announced, seems to have convinced local buyers to seek ownership,” Crellin said.

“Only 11 counties reported sales below a year ago,” added Cheryl Ferrier, a Bellingham real estate agent and 2001 president of the Washington Association of Realtors, “and most of those communities were small markets. Our city and suburban areas were generally strong.”

In addition to higher sales levels, home prices continued to increase, with the statewide median price reaching $180,400. The increase of 1.3 percent compared to the median a year ago indicates that home prices have moderated somewhat, and that some individual units are probably selling for less today than they would have a year ago. However, unless current owners purchased the home recently, their sales price is probably more than they paid for the home. Median prices ranged from $265,000 in King County down to $74,500 in Pacific County.

Housing affordability stalled in the second quarter, recording a level of 124.0, slightly below the first-quarter measurement, but much higher than a year ago. At this level, the typical family in Washington could afford the median-price home and even a more expensive home in every county except Jefferson, San Juan and Wahkiakum.

“Unfortunately, only one county, Benton, produced an affordability measure of at least 100 for first-time buyers,” Crellin said. Both incomes and assets (down payments) are lower for these buyers, and even though they typically choose less expensive homes, their incomes fall short of affording a typical starter home. Statewide incomes of would-be first-time buyers are about 25 percent lower than required to qualify for a mortgage on the assumed starter home, priced at 85 percent of area median. Jefferson, San Juan and Wahkiakum again presented the greatest challenges, where a typical first-time buyer’s income was at least 40 percent below that required to qualify for the typical starter home. “These households will need to save aggressively and adjust their home purchase expectations,” Crellin said.

WCRER and WAR have produced such 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.

For more information, contact Crellin at 800/835-9683. A “Housing Market Snapshot” for the second quarter of 2001 showing statistics by county for home resales, building permits, median price, affordability index and first-time affordability is available on the WCRER Web site at www.cbe.wsu.edu/~wcrer.