SPOKANE - There are signs the pace of home sales in Washington is slowing down, but prices continued to climb in the first quarter of 2006, according to the Washington Center for Real Estate Research at Washington State University.
Rising interest rates lessened the number of homes sold in the first three months of 2006, compared to a year ago, but the price of homes soared 17 percent in the same period.
The Spokane market was particularly strong, with prices rising 26.4 percent from the year before, to an average of $169,900, the report said.
"It's fairly typical that the Spokane market really heats up three years or so after the Seattle market has caught fire," said Glenn Crellin, director of the Pullman-based center.
After a few years of rising prices in the Puget Sound region, the Spokane market looks like a bargain and buyers swoop in, Crellin said.
The report is produced in conjuction with Washington Realtors.
Crellin said the raising of interest rates by the Federal Reserve Board is the main reason for the flat statewide market.
But he cautioned that the market appears flat only in comparison to the superheated housing sales of recent years.
"The market remains very strong," he said, especially compared to the rest of the country.
Roughly half of Washington's 39 counties reported fewer sales between January 1 and March 31 than a year ago, but the statewide total was only 0.3 percent (120 sales) below the record for a first quarter.
King County, the state's largest, saw the number of homes sold in the first quarter drop 10 percent from the year before. But neighboring Snohomish and Pierce counties each reported roughly 9 percent more sales.
In Eastern Washington, Spokane was the only urban market with rising sales. The number of homes sold in Yakima was down 3.6 percent and in the Tri-Cities was down 5.8 percent. The top performers in Eastern Washington were Kittitas and Walla Walla counties, where sales rates were nearly 50 percent above a year ago.
Statewide, there are only about half the homes on the market required to avoid significant inflationary pressure on housing, Crellin said.
The statewide median price soared to $280,200 during the first quarter, 17.1 percent above a year earlier, but a slower increase than during the fourth quarter.
Grant and Yakima counties were the only areas to report median prices down from a year ago, and only slightly. Sparsely populated Columbia County was the only market in the state reporting a median price below $100,000.
Prices averaged double digit increases in 29 of the 39 counties.
The most costly market in the state was San Juan County, where the median price of $625,500 was 33.8 percent above last year.
King County remained the most expensive urban market, with a median price during the first quarter of $399,500. Yakima was the least expensive urban market, with a median price of $129,400.
Buying a house continues to become more difficult in Washington.
The Housing Affordability Index - which measures the ability of a middle income family to buy a median price home with a 30-year mortgage - slipped further below 100 in the first quarter.
The statewide rate of 93.3 meant that a typical family had only 93 percent of the income required to buy a median-price home. Buyers in seven counties faced index values below 100, with the problem especially big in San Juan, Jefferson and King counties, which had values ranging from 37.1 to 77.1.
At the other extreme, four counties had index values above 150, suggesting the typical family would not have much trouble buying. They were Benton, Columbia, Garfield and Wahkiakum counties.
The first-time buyer affordability index for the first quarter stood at 54.3, the fourth consecutive quarter of record low affordability.
"The biggest challenge is finding affordable starter homes," Crellin said. "Only three counties offer the typical entry-level buyer the opportunity to afford a typical starter home." They are Benton, Columbia and Wahkiakum.