Surging state housing market comes at a price

Washington’s real estate market set records for the number of houses sold and median price in the first quarter of the year, according to Washington State University.

There were 36,120 existing single-family homes sold during the first three months of 2005, a record for the January-March period, said Glen Crellin, director of the Washington Center for Real Estate Research at WSU.

“Mortgage rates have remained in bargain territory despite repeated increases in the discount rates by the Fed, convincing local home buyers that it will be a long time before rates are this affordable again,” Crellin said in a news release.

Buyers are also scrambling to buy because of rapidly rising home prices, he said.

The number of homes sold in the first quarter was 12.7 percent higher than for the same period in 2004, Crellin said. Home sales doubled over 2004 in Wahkiakum and Whitman counties, and were at least 20 percent ahead of last year in 14 additional counties.

The number of homes sold during the first quarter declined compared to a year ago in seven markets. The largest was Whatcom County, which experienced a 7.8 percent drop.

The median price for an existing home in the state jumped another 13.4 percent in the first quarter to a record $238,900.

The highest median price was $407,500 in San Juan County, while the lowest was $85,900 in Okanogan County. Okanogan and Pacific County ($92,900) were the only two markets remaining below $100,000 for the typical home.

Among the metropolitan markets, the most expensive homes were in King County, with a $348,200 median price. The least costly were in Yakima, with a $120,800 median.

Twenty-two counties reported price increases of at least 10 percent compared to the first quarter of last year. Prices were above the first quarter of last year in all 35 counties where data were available. Data were not available from four counties.

The Housing Affordability Index, which measures the ability of a middle-income family to afford to purchase a median price home using a 30-year mortgage at prevailing interest rates, illustrates the problem of rapidly increasing prices and slowly increasing incomes.

The index declined in the first quarter, falling to its lowest level since late 2000, registering 111.8. That means a typical family has an 11.8 percent income cushion for the purchase of a median-price home.