PULLMAN – Home sales July-September 2010 throughout Washington slid to near their lowest level of the current cycle, reflecting expiration of the federal tax credit programs for first time and some repeat homebuyers, according to data released today by the Washington Center for Real Estate Research at WSU.
In addition, median home prices continued to decline on a year-to-year basis.
Home sales declined 26.5 percent at seasonally adjusted annual rates from the second quarter of the year to 70,550 units. This is a sales rate 20.2 percent below that of a year ago, when the initial tax credit program was in full swing.
Glenn Crellin, WCRER director, said only two counties saw increased sales rates compared to the second quarter and seven counties had increased sales from a year ago. The areas showing increases were primarily in rural communities.
Six of the 16 counties identified as metropolitan by the federal government had declines of at least 35 percent compared to the second quarter, while four urban counties reported declines of less than 20 percent.
The median sales price during the first quarter was $248,900 – 3.0 percent below the year ago median. Both the direction and magnitude of price changes are consistent with widely reported data from other sources.
Median prices ranged from a high of $402,000 in San Juan County – reclaiming that distinction from second place King County ($390,000) – to a low of $127,500 in Adams County. The largest increase in median compared to a year ago was 29.4 percent in Adams County, while the largest decline was 66.4 percent in Wahkiakum 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 10.8 percent in the Tri-Cities to a decline of 13.5 percent in Skamania County (part of the Portland metro area).
Crellin noted that continued problems with mortgage delinquency and foreclosure, coupled with generally sluggish sales activity, accounted for the declines.
Price softness combined with record low mortgage interest rates to make homes quite affordable for households with good credit and reliable jobs. The housing affordability index statewide stood at a record high 140.2, meaning a median income family had 40.2 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.
Bill Riley of Puyallup, president of the Washington Realtors, noted: “At this level of affordability families should seriously evaluate what potential future price declines and interest rate increases mean to their household budgets. A one percentage point increase in mortgage rates would require a 10 percent additional reduction in prices to keep monthly payments from increasing.”
Households hoping to purchase their first home continue to struggle in terms of affordability, but the First-time Buyer Affordability Index also tied a record high at 79.1. First-time buyer affordability ranged from a low of 45.6 in San Juan County to a high of 112.3 in Benton County. Among urban counties first-time buyer affordability ranged from Benton County’s high to a low of 60.5 in King County.
A first-time buyer index of 80 is generally believed to offer qualified renters a reasonable opportunity to become home buyers.
WCRER has 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.
See the Third Quarter 2010 Housing Market Snapshot online here.