State Housing Market Hits Brakes
Clear the runway. The Washington housing market is landing. All but one of the state’s 39 counties reported fewer existing-home sales in January and February than during the same 1994 period.
The resale housing market for the first two months of 1995 declined by 17.4 percent from last year. Building permit activity plunged 12.8 percent, according to a study by Washington Center for Real Estate Research.
A total of 18,710 homes were resold statewide in the first two months of the year, with an average price of $135,600.
Economists called the slowdown - which affected every market except for Adams County - a predictable trough in a cyclical industry.
County-by-county numbers for later months are not available, but the decline has continued in the state’s metropolitan areas, according to reports by the National Association of Realtors.
“The biggest factor is that the market here over the past several years was overheated and was operating at a level that wasn’t sustainable,” WCRER director Glenn Crellin said.
The state’s housing market, like most in the nation, has been hurt by rising interest rates.
“The steep interest rates made buying a house effectively more expensive, and that’s affected people in Washington as well as across the nation,” said Gary Smith, extension economist in the Department of Agricultural Economics at Washington State University.
He added that a rebounding California economy may have slowed migration and thus local home sales.
The real estate center’s study also blames the slowdown on Boeing cutbacks and reduced funding for the Hanford cleanup.
Despite sleepy performance of the state housing market, Crellin predicts the second half of 1995 will be on par with or ahead of 1994, especially in Spokane County.
“I don’t see the kind of economic negatives in Spokane that I see in other places,” Crellin said.