Residential real estate market improves

The residential real estate market improved in the state for the third quarter in a row, according to a report released Thursday by the University of Washington.

The report said sales of existing homes rose 14.7 percent in the first quarter of 2013, compared to the same period a year ago.

Prices were also on the rise. The statewide median home price was $237,000 in the first quarter, up 14.1 percent from the same time last year.

The report was prepared by the Runstad Center for Real Estate Studies at the university.

“Washington’s housing market is clearly recovering,” said Glenn Crellin, the center’s associate director for research. “However, the pace of sales activity is being held back somewhat by the limited inventory of homes available for sale.”

Crellin said the shortage of listings brings “classic supply and demand pressure on prices.”

Quarter-to-quarter home sales increased in 28 of Washington’s 39 counties. Some counties with a slower sales pace were urban markets such as King County, which entered recovery mode earlier than some smaller communities, the report said.

The first quarter of 2013 actually saw the highest seasonally adjusted sales rate since the third quarter of 2007, Crellin said.

The statewide median home price was $237,600, with a high of $412,500 in San Juan County and a low of $65,000 in rural Lincoln County.

Despite the increased median prices, continued declines in mortgage interest rates allowed improvement in the Housing Affordability Index. This measures the ability of median-income families to buy median-price homes, assuming a 20 percent down payment and 30-year mortgage at prevailing rates.

Crellin said the index showed that middle-income families, at an annual income of $73,150, could qualify for a home priced well above the statewide median. Only San Juan County had an index below 100, meaning that a typical middle-income family there could not quite afford a median-priced home in the county.

King County, which includes Seattle, had the second-lowest affordability at 134.6, meaning the typical family could afford a home priced about 35 percent above the local median.

Meanwhile, the statewide first-time buyer index reached a record high of 104.4 during the first quarter, meaning a household earning 70 percent of the median household income could just afford a typical starter home.

Statewide, the most affordable community was Lincoln County, just west of Spokane. For first-time buyers in metropolitan areas, Benton County, where Richland and Kennewick are located, was the most affordable and King County the least affordable.

“The biggest current impediment to the housing market remains a shortage of homes available for sale,” Crellin said.