November 5, 2012
Home sales, median prices up in Washington; affordability slips
Washington state’s housing market continued to improve during the third quarter of 2012 as median selling prices and the number of homes sold both increased, according to the Runstad Center for Real Estate Studies at the University of Washington.
Existing home sales increased 3.4 percent from the second quarter, to seasonally adjusted annual rate of 97,860. This sales rate is also 11.9 percent above this time last year.
“Washington’s housing market, similar to reports from around the county, is clearly stronger than a year ago, with many real estate brokers reporting a shortage of homes for sale,” said Glenn Crellin, associate director of the center. “Sales in the third quarter were higher than any time since the opening quarter of 2008.”
Further evidence of the improvement in sales and shortage of listings, Crellin said, is seen in the $243,100 third-quarter median sales price statewide, 7.9 percent higher than the July-September quarter in 2011. The statewide median price reached its highest level in two years. Among metropolitan counties, the King County median was $379,900, 8.5 percent above a year ago.
The rise in home prices offset savings from lower mortgage rates, resulting in a slight drop in the Housing Affordability Index, which measures the ability of median-income families to buy median-price homes, assuming a 20 percent down payment and 30-year mortgage at prevailing rates. The index shows that middle-income families, at an annual income of $72,650, “have the capacity to purchase a home nearly 70 percent more expensive than the median,” Crellin said.
Meanwhile, the first-time buyer index, which assumes a less expensive home, lower income and a smaller down payment, improved a bit driven by increasing household income statistics.
“The first-time buyer improvement underscores what Realtors are seeing: Young households, who have been written off as long-term renters, are actually eager to own,” said Faye Nelson, president of Washington Realtors.
Regional data suggest urban markets are stronger than smaller communities. In fact, only three of the 11 counties reporting slower home sales in the third quarter are in metropolitan counties. All those are east of the Cascades, and two represent the Tri-Cities market, which generally outperformed the state throughout the recession.
Homes remained affordable for median income families in all Washington counties except perpetually expensive San Juan County, Crellin said. The most affordable housing market was Lincoln County where a middle-income buyer could afford a home price more than three times the local median. For first-time buyers, in metropolitan areas, Benton County was again the most affordable and King County the least affordable.
“With employment increasing and housing construction finally improving, the housing market is clearly improving, but the impending fiscal cliff, international uncertainty and the continuing overhang of distressed properties provide reasons to temper optimism,” Crellin said.
The Runstad Center produces home sales 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.
Sales, median home prices and affordability data for each of Washington’s 39 counties are available at the Runstad Center’s website.
For more information, contact Crellin at 206-685-8020 or firstname.lastname@example.org.