February 29, 2016
Statewide home sales, affordability up in fourth quarter of 2015
Home sale prices were up fractionally in the fourth quarter of 2015 compared to the third quarter but up 9.7 percent compared with the previous year, and the rate of home sales also dropped, according to the Runstad Center for Real Estate Studies at the University of Washington.
The statewide median sales price for a single family home stood at $292,900 in the final quarter of 2015.
Similarly, the seasonally adjusted annual rate of existing home sales fell 7.9 percent from the third quarter of 2015 — from 101,950 to 93,910 homes — while remaining almost a percentage point above that time in 2014. This means that if the fourth quarter’s pace continued unchanged for a year, that number of homes would be sold.
And though the volume of sales has recovered since the recent years of recession, the limited supply of inventory for sale in urban markets continues to keep the sales pace constrained, overshadowing some growth in more rural markets.
In the fourth quarter of 2015, home prices rose in all but three of the state’s metropolitan counties. For counties with greater than 3,000 sales (for statistical significance), King County recorded the highest relative increase of 10.1 percent, followed by Kitsap County at 10 percent. Median prices were lower than a year earlier in seven counties, with prices in Columbia County coming in 40 percent below last year, though with only 30 sales.
Given the variety of location and market diversity in the state, median housing prices are highly variable, ranging from $85,000 in rural Lincoln County to $494,500 in urban King County.
Housing affordability for all buyers statewide changed its recent course and rose in the fourth quarter. That index — where 100 means a middle-income family can just qualify for a median-priced home, given a 20 percent down payment and a 30-year fixed mortgage rate at prevailing rates — was 140.2, up from 138.9 in the third quarter of 2015.
Statewide, the first-time buyer index showed a slight increase of .9 points from the third quarter, ending the fourth quarter at 79.7. This index assumes a less expensive home, lower down payment and lower income. This means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 79.7 percent of the income required to purchase a typical starter home statewide.
Though up in general, housing affordability varied widely across the state. The least affordable county continues to be San Juan, and Columbia County the most affordable. For first-time buyers in metropolitan areas, King County was the least affordable.
Affordability remains a challenge in the state’s housing market, the report said. Permitting dropped a surprising 66.4 percent with King County declining 4.2 percent which will ultimately lead to further supply problems and compound concerns about affordability.
The Runstad Center produces home sales statistics in partnership with Washington Realtors. Each quarterly release coincides with information from the National Association of Realtors regarding median home prices by metropolitan area.
Sales, median home prices and affordability data for all Washington counties are available at the center’s website.
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For more information, contact Orser at 206-795-7008 or porser@uw.edu
Tag(s): Peter Orser • Runstad Department of Real Estate
