PULLMAN – Home sales in the months of April through June 2010 throughout Washington surged compared to a year ago, and edged up from first quarter 2010 levels, the Washington Center for Real Estate Research at Washington State University reported.
However, median home prices continued to decline on a year-to-year basis, but the reduction was much smaller than seen in recent quarters.
The impending end of the federal tax credit was clearly boosting sales activity, especially by first-time buyers.
Statewide home sales increased 3.5 percent at seasonally adjusted annual rates from the first quarter of the year to 96,020 units. This is a sales rate 27.5 percent above that of a year ago, before the initial tax credit program had begun to stimulate home sales.
Glenn Crellin, WCRER director, indicated that nearly every county in the state saw increased sales activity compared to a year ago, but that the sales rate declined from the fourth quarter in 13 of Washington’s 39 counties, most of which were rural communities.
The five-county Central Puget Sound region had a sales rate of 49,980, over half of the statewide total. While smaller counties reported year-to year sales jumps, which were double in some cases, that is driven by the exceptionally low sales observed last year.
The median sales price during the second quarter was $246,800, 6.9 percent below the year ago median. Both the direction and magnitude of price changes reported here are consistent with widely-reported data from other sources.
Median prices ranged from a high of $375,500 in King County, replacing San Juan County as the high price leader for the first time in several years, to a low median price of $107,500 in Columbia County.
In terms of price changes, the largest increase in median compared to a year ago was 29.2 percent in Jefferson County while the largest decline was 9.2 percent in Skamania 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 5.5 percent in the Tri-Cities to a decline of 9.0 percent in Snohomish County.
Crellin noted that continued problems with mortgage delinquency and foreclosure, coupled with continued first-time buyer activity encouraged by the tax credit program resulted in continued median price declines.
The price softness combined with record low mortgage interest rates making homes quite affordable for households with good credit and reliable jobs. The housing affordability index statewide stood at 136.4, meaning the median income family had 36.4 percent more income than the bare minimum required to qualify to purchase a median price home with a 20 percent down payment and a 30-year mortgage. The index level is modestly improved from last quarter, and represents much greater affordability than a year ago.
Bill Riley of Puyallup, president of the Washington Realtors, noted: “Even without the stimulus provided by the tax credit, lower home prices, ample supply of homes on the market and interest rates at their lowest in memory mean qualified buyers can afford a home with affordable payments. Plus, sellers recognize their home must be in move-in condition if it is going to be competitive.”
Affordability remains a problem for first time homebuyers, however. Like the All-Buyer Index, the First-Time Buyer index remained near its record high at 80.1. First-time buyer affordability measures ranged from a low of 56.6 in San Juan County to a high of 132.6 in Adams County. Among urban counties first-time buyer affordability ranged from a high of 106.4 in Benton County to a low of 61.7 in King County. A first-time buyer index of 80 is generally believed to offer qualified renters a reasonable opportunity to become home buyers.