June 12, 2009 in Business, City

Housing prices fall

Credit brings out first-time buyers
By The Spokesman-Review
Molly Quinn photo

The median price of a home in Spokane County fell 4 percent from April to May, despite an 18 percent increase in closed sales.
(Full-size photo)

First-time homebuyers shopping at the lower end of the market were partly responsible for a 4 percent month-to-month drop in the median price of a sold home in Spokane County, the executive vice president of the Spokane Association of Realtors said Thursday.

Rob Higgins said an $8,000 stimulus tax credit just about covers the 3.5 percent down payment and closing costs on a $200,000 home financed with a Federal Housing Administration loan. The popularity of FHA financing has rebounded as conventional financing for more expensive homes has dried up.

In Spokane County, the limit on an FHA loan is $271,050.

The credit, which is also available to those who have not owned a home in three years, has focused buyers on homes in the $150,000 to $200,000 range, Higgins said.

The median home price slipped to $165,500 in May from $172,500 in April, $176,200 in March and $183,500 in May 2008.

But the drop, Higgins said, takes prices back only as far as May 2006, when the Spokane market was experiencing a boom that peaked in July 2007 with a median price of $196,000.

The average price in May was $181,677, down 8 percent from April and 12 percent from May 2008.

Lower prices offset an 18 percent increase in closed sales from April to May, yielding a 9 percent increase in sales volume, which was $70.9 million.

A total 390 sales closed, including only 35 new homes. That’s less than one-half the 77 that sold in May 2008.

There were 3,159 homes on the market as of June 2, representing an eight-month inventory at the May sales rate.

So far in 2009, 1,357 homes have sold, compared with 1,812 for the first five months of 2008. New home sales, at 193, are off substantially from the 310 for the 2008 period.

Also Thursday, RealtyTrac released May foreclosure numbers that show an almost 70 percent reduction in the rate for Kootenai County compared with April. One in every 667 homes was subject to a default notice or notice of trustee sale. The rate is 24 percent lower than that for May 2008.

The rate in Spokane County, at one notice per 2,868 homes, climbed 28 percent compared with April, but remained 58 percent below the rate for May 2008.

The national rate was one notice for every 698 homes.

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