Washington home prices continue to increase, bucking national trends

FOR IMMEDIATE RELEASE – Sept. 6, 2007
Washington home prices continue to increase, bucking national trends
OLYMPIA – Washington State continues to defy national trends in home prices, lending,
and sales. Nationally home prices are down; sub-prime mortgages and foreclosures are up. But in
Washington State, foreclosures and sub-prime lending occurred at lower rates than just about
anywhere in the nation. Home appreciation in Washington also continues to out-perform the rest of
the nation with year-to-year price increases every quarter since the spring of 1995.
“The housing market in Washington State is strong. Demand for median-priced homes, in
particular, continues to outstrip supply – and that’s pushing home prices up,” said Steve Francks,
Washington Realtors Chief Executive Officer.
According to the Center for Real Estate Research (CRER) at Washington State University,
home prices in Washington have increased an average of 8.1 percent since the same time last
year. Many counties, however, have experienced price hikes much higher: Chelan 29.8 percent,
Okanogan 24.5 percent; Douglas, 22.2 percent; and Lewis 19.3.
As of mid-June, sub-prime, adjustable-rate loans represented 20 percent of loans
nationally, but just 6 percent of home loans in Washington. Of those mortgages, 5 percent in
Washington were delinquent, compared with 8.9 percent nationwide. The largest increase in
foreclosure activity was in Nevada (166 percent); while the smallest increase was in Washington
State (18 percent).
“In other words,” said Francks, “ours is a stable and responsible market place. “What we
really should be asking is what can we do to provide more home choices so that people don’t have
to consider risky loans in the first place?”
According to the WSU CRER, a “housing squeeze” continues to define the Central Puget
Sound market, where primary concerns are “lack of space to meet demands and inability to deliver
affordable housing.” The CRER’s “Central Puget Sound Real Estate Research Report” notes that
the housing market isn’t keeping pace with the growth of population, which is continuing to
increase at 1.8 percent per year. In spring 2007, the median price for homes in King County rose
to $470,000 and to $376,000 in Snohomish County.
Francks said the key to stability in the residential real estate market is balance, where
balance is about a six month supply (or inventory) of homes available on the market at any given
time. In Washington there is currently about a four- month supply. In many states where prices are
slumping, the inventory is about 11 months. Francks explained that home prices are not likely to
fall in Washington until an over-supply of homes exists — a situation unlikely to occur as long as
the state’s population is growing at such a robust rate.
State demographers expect Washington’s population to increase by nearly one million
over the present decade and to reach 6.8 million by 2010. About two thirds of the growth is due to
in-migration; the rest is a result of the growth of families now living in Washington.
“The housing squeeze is forcing some families to take on more debt than they should.
Others compensate by accepting longer commutes than they want. Neither is a good solution,”
said Francks. “We need to provide a variety of home choices to meet changing market demands.”
Francks said communities should use realistic population-increase estimates to plan for
the number of homes that will actually be needed. Other solutions include making better use of the
land that is available for homes with cottage housing and accessory dwelling units, and using
innovative design to enable each acre of land to comfortably accommodate more homes.
Washington Realtors represent approximately 170,000 homebuyers and the interests of
more than 2 million homeowners throughout the state. Realtors’ top public policy priority is building
communities that have a strong economy, attractive home choices, great schools and parks, safe
neighborhoods, and good transportation choices.
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member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.”