Washington state’s housing market showed the continuing effects of low supply in the first quarter of 2016. Sales were constrained and new building permits were down dramatically compared with last year, making most markets less affordable, particularly in urban counties, according to the Runstad Center for Real Estate Studies at the University of Washington.
The statewide median sales price for a single family home rose to $289,400 in the first quarter, 8.1 percent higher than the same time in 2015, though still significantly lower than the all-time high of $316,700 in the second quarter of 2007.
Similarly, the seasonally adjusted annual rate of existing home sales rose 4.9 percent from the first quarter of 2015 to 95,730 homes. This means that if the quarter’s pace continued unchanged for a year, that number of homes would be sold. The current annual rate of sales is well below the high witnessed in 2003, and generally attributable to a very low supply of available homes listed for sale.
Home prices rose in every county across the state except for Adams and Chelan counties. Wahkiakum recorded the highest relative increase of 200 percent, followed by San Juan at 88.5 percent and Skamania at 78.6 percent. Median prices were lower than 2015 in only two counties — Adams County at 22.8 percent and Chelan County 2.5 percent below last year.
Given the market diversity in the state, median housing prices are highly variable, ranging from $85,000 in Ferry County to $958,300 in San Juan County. King County has the second highest median values, at $674,500.
Housing affordability for all buyers statewide declined slightly in the first 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 143.4, down from 152 in the fourth quarter of 2015. This metric suggests that, given the same down payment and mortgage, a middle-income family can afford a home selling for 43 percent above the statewide median.
Statewide, the first-time buyer index dropped from 85.9 to 81.7. This index assumes a less expensive home, lower down payment and lower income. It means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 81.7 percent of the income required to purchase a typical starter home statewide.
Housing affordability varied widely across the state. The least affordable county continues to be San Juan County. King County, with an index of 76 is the only other county below the index benchmark of 100. This statewide perspective is a dramatic shift from prior reports, particularly for urbanized “west side” counties. This would suggest that incomes are growing at rates faster than median home prices in most counties, in effect keeping them relatively affordable.
Prices continue to rise, in some counties in an unsustainable fashion; new permits, a key indicator, are down a 59.7 compared to a year ago. King County is probably the best example of the effect on price, when high demand occurs in the face of low supply. In that county, permits are down 87.5 percent and sales are down 6.3 percent due to a low supply of listings, which in turn is leading to a 49.9 percent increase in median home prices.
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 Runstad Center’s website.