February 11, 2015
Statewide home prices leveling off, but affordability woes linger
Home sale prices were down in the fourth quarter of 2014 compared to the third quarter but up compared with the previous year, and the rate of home sales also dropped, according to the Runstad Center for Real Estate Studies at the University of Washington.
The statewide median sales price for a single family home stood at $266,900 in the final quarter of 2014, 3.7 percent lower than the third quarter, but 4.1 percent higher than the fourth quarter of 2013.
Similarly, the seasonally adjusted annual rate of existing home sales fell 3.4 percent from the third quarter of 2014 — from 96,390 to 93,070 homes — while remaining half a percentage point above that time in 2013. This means that if the quarter’s pace continued unchanged for a year, that number of homes would be sold.
And though the volume of sales has recovered since the recent years of recession, overall sales remain 34 percent below their all-time high in the third quarter of 2003.
Fourth quarter home sales for 2014, as reported by the Runstad Center for Real Estate Studies.Runstad Center
In the fourth quarter of 2014, home prices rose in all but one of the state’s metropolitan counties, Walla Walla County. Cowlitz County recorded the highest relative increase of 13.5 percent, followed by Douglas County at 12.1 percent. Median prices were lower than a year earlier in nine counties, with prices in Ferry County in northeast Washington coming in 40 percent below last year.
Given the variety of location and market diversity in the state, median housing prices are highly variable, ranging from $60,000 in Ferry County to $449,300 in King County.
Housing affordability for all buyers statewide changed its recent course and rose in the fourth quarter. That index — where 100 means a middle-income family can just qualify for a median-priced home, given a 20 percent down payment and a 30-year fixed mortgage rate at prevailing rates — was 148.9, up from 143 the third quarter of 2014.
Statewide, the first-time buyer index showed an increase of 3.4 points, ending the quarter at 83.8. The first time buyer index assumes a less expensive home, lower down payment and lower income. This means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 83.8 percent of the income required to purchase a typical starter home statewide.
Though up in general, housing affordability varied widely across the state. The least affordable county continues to be San Juan, and Ferry County the most affordable. For first-time buyers in metropolitan areas, Benton County was again the most affordable and King County the least affordable.
Affordability remains a challenge in the state’s housing market, the report said. This is despite continued strong permitting activity of nearly 7,500 new units, primarily in multifamily housing units in metro areas, marking a 7.1 percent increase in the number of united under construction compared to a year ago.
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 all Washington counties are available at the Runstad Center’s website.
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For more information, contact O’Connor at 206-685-9989 or steveoco@uw.edu; or Alon Bassok at 206-356-1331 or abassok@uw.edu.
Tag(s): Alon Bassok • College of Built Environments • Runstad Department of Real Estate • Stephen O'Connor
