Good news for average families. Homes are becoming more affordable as sales slip.
Home sales in early 2008 continued to ease compared to both late 2007 and a year ago, according to statistics prepared by the Washington Center for Real Estate Research at Washington State University.
Homes sold during the quarter at an annual rate of 97,740 units statewide, a level 3.4 percent lower than the previous quarter and 29.6 percent below a year earlier.
"The quarter-to-quarter decline was slower than at year-end 2007, but the year-to-year decline was a bit steeper," said Glenn Crellin, director of the Washington Center for Real Estate Research. Despite national reports which suggest that no homes are being sold, a sales rate of nearly 98,000 units is similar to the number of sales that prevailed 10 years ago.
Washington's annual sales decline was marginally greater than nationally, but the state's markets remained more robust than many areas in the West.
Housing markets are local, a point which was reinforced in these statistics. While sales declined in 36 of Washington's 39 counties, the remaining three small counties recorded significant sales jumps compared to a year ago. Based on quarter-to-quarter sales rate changes, 12 counties experienced more rapid home sales during the first quarter.
Among counties in metropolitan areas, Skamania County recorded an increase in sales of 14.3 percent compared to a year ago while Douglas County saw sales decline by 41.2 percent. As always, King County had the highest sales rate, 24,310, while Garfield County recorded an annualized sales rate less than 100 homes sold.
Median prices ranged from $106,000 in Adams County to $478,800 in San Juan County. Among the urban markets the range was somewhat less, from $150,500 in Asotin County to $435,000 in King County.
Despite the prevailing belief that all home prices are declining, a total of 20 Washington counties reported higher median prices than a year ago, and nine of those were increases of more than 10 percent.
"During softer markets those households purchasing homes are finding bargains in the marketplace which allows them to buy more home for the money. The total amount spent may be increasing, but the quality is also increasing, and the median masks some potential price weakness," Crellin said.
The center completes these market statistics with measures of the ability of typical families to purchase typical homes, measured through the Housing Affordability Index. The statewide all-buyer index stood at 94.5 for the first quarter, the second consecutive increase in affordability after several quarters of decline. This means that a median income family has about 95 percent of the income required to qualify for a mortgage on a median price home. Jan Ellingson of Burlington, the 2008 President of Washington Realtors(r), emphasized "increasing affordability means that households with good credit may find this a great time to consider a home purchase - not only will they take advantage of prices which have backed off their highs, but it is uncertain how much longer affordable mortgage rates will be available." Local affordability measures ranged from 170.4 in Adams County to 50.0 in San Juan County.
More critical to the long-term health of the housing market is the ability of potential first-time buyers to enter the ranks of homeowners.
The companion first-time buyer affordability index assumes a lower purchase price, a lower income incorporating the fact that most higher-income households are already homeowners and the fact that single persons (who are excluded from the family income statistics) are more likely to be potential buyers. The statewide measure was 55.9, meaning that the typical would-be homebuyer has a little over half the income needed to qualify for a mortgage on the typical starter home. Again the statewide measure reflected improved affordability conditions than recent quarters. The range in first-time buyer affordability measures was from 115.0 in Adams County to 29.5 in San Juan County. The metropolitan range was from 105.7 in Benton County to 42.7 in King County.