UW Today

February 9, 2012

Good news, bad news in Washingtons year-end housing market

News and Information

Washingtons housing market in the final quarter of 2011 saw the highest seasonally-adjusted sales since the second quarter of 2010, according to the Runstad Center for Real Estate Studies at the University of Washington.

Sales strength reflected bargain hunting as well as the persistently large number of distressed properties being sold in lower-priced neighborhoods, said Glenn Crellin, associate director of the Runstad Center.

The seasonally-adjusted sales rate during the quarter was 91,080 homes, meaning that if the relative sales rate for the quarter were continued for a year, that number of homes would be sold. The rate is 6 percent above the prior quarter and 9.6 percent higher than the closing quarter of 2010, when tax credit programs to stimulate housing demand were ending.

Despite the stronger market, median home prices continued to reflect the weak economy, Crellin said. The statewide median home price was $219,700, the lowest fourth-quarter price since 2003 when the median was $205,700.

The median price declined 8 percent between the end of 2010 ($238,800) and the end of 2011.

Sales, median home prices and affordability data for each of Washingtons 39 counties are available at the Runstad website.

Ordinarily, Crellin said, very low mortgage rates would have generated a more robust market. The 4.28 percent average rate (including fees and charges) that prevailed during the quarter was the lowest ever recorded by the Federal Housing Finance Agency, which along with its predecessors has been monitoring mortgage rates for decades. Home price and interest rate declines, combined with general income stability, caused affordability indexes for all buyers, including first-timers, to reach record highs for the eighth consecutive quarter.

“Affordability should encourage households facing steep rent increases to look favorably on purchasing a home this year,” said Faye Nelson, president of Washington Realtors.

In Washingtons urban counties, the greatest quarterly gain in sales was 17 percent in Snohomish County, while the greatest decline, 9.7 percent, happened in Cowlitz County. The greatest year-to-year drop was 13.5 percent in King County, while the smallest drop was 2.5 percent in Kitsap County.

In nine rural counties, median prices increased from the closing quarter of 2010.

“This indicates that the housing market is uneven, with some areas, or neighborhoods, seeing price stabilization, while others have many distressed and foreclosure properties,” Crellin said.

In November, there were more than 76,000 Washington homes with mortgage payments  at least 90 days past due. Thats enough to feed the housing market for three quarters, Crellin said. He added that “the 2012 market will continue to challenge sellers trying to preserve their equity.”

The Runstad Center produces these statistics in partnership with Washington Realtors. Each quarterly release coincides with information from the National Association of Realtors regarding median home prices by metropolitan area.

This release of Washington housing market data is the first since the Washington Center for Real Estate Research at WSU merged with the Runstad Center in January.

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For more information, contact Crellin at 206-685-8020 or crellin@uw.edu .