State house prices up 12.1% compared to the first quarter of last year

EMBARGO: May 16, 2017- 5:00pm

Washington state’s housing market showed the continuing effects of high demand in the first quarter of 2017 according to the Washington Center for Real Estate Research in the Runstad Center at the University of Washington. The statewide median sales price rose to $324,300 in the first quarter, 12.1 percent higher than the same time period last year. While this does not represent an all-time high for statewide house prices, this price represents the highest first quarter price ever recorded.

Similarly, the seasonally adjusted annual rate of existing home sales rose 12.2 percent from the
first quarter of 2016 to 107,590 homes. This indicates that the current annual rate of sales is well
below that witnessed in previous periods of high house price growth such as 2003. This is low
supply of existing homes listed for sale is likely a leading factor promoting rapid house price
growth throughout the state.

Breaking down trends by region reveals a high level of variance in house prices throughout the
state. Somewhat expectedly, median prices were highest in King County at $577,300 and a yearon-
year increase of 11 .1 %. The lowest median prices were found in Lincoln County at $70,000
with a low number of house sales recorded.

House prices in many other major markets rose significantly, with Spokane rising 8.0% to a
median of $208,100 and Whatcom County (Bellingham) rising 8.4% to $329,500. Perhaps not
surprisingly, median prices typically rose the fastest in the Puget Sound region. Interestingly,
however, the fastest growth in the region was fastest further out from King County than expected.
For example, median prices in Snohomish County grew by 10.6% while in Skagit County prices
grew by 14.0%. This indicates that some of the demand for housing is likely moving further away
from Downtown Seattle in search of more affordable prices.

Other regional markets posted significant price increases with Benton and Franklin Counties (The
Tri-cities) posting a median price of $232,400, a 6.9% increase on the same period last year.
Chelan County (Wenatchee) posted a median price of $264,100 (up 5.9% from the same period
last year) and Walla Walla posting a median price of $209,800 (up 4.4% from the same period
last year). Compared to last year, the Yakima median house price stood at $192,700 up 8.6% on
last year. An interesting development within regional house prices was the Olympic peninsula
where the median price in Jefferson County (Port Townsend) was up 19.1% on a median price of
$353,800 and Clallam County (Port Angeles) up 13.8% on a median price of $256,000.

Housing affordability was lower in the first quarter than both the first and fourth quarters of the
previous year. The index-where 1 00 means a middle-income family can just qualify for a medianpriced
home, given a 20 percent down payment and a 30-year fixed mortgage rate at prevailing
rates-was 124.3, down from 132.7 in the fourth quarter of 2016. This metric suggests that, given
the same down payment and mortgage, a middle-income family can afford a home selling for 24.3
percent above the median.

Statewide, the first-time buyer index showed a decrease of 4. 7 points, ending the quarter at 70.4.
This index assumes a less expensive home than a typical family, lower down payment and lower
income. Using the assumption that a first time buyer households would earn 70 percent of the
area median household income, out index reveals that they had 70.4 percent of the income
required to purchase a typical starter home.

With the overall house price increases noted statewide, it is not surprising that housing the number
of building permits has increased as builders respond to increased demand. In the first quarter of
2017, a total of 8,878 building permits were recorded, an increase of 11 .1% from the first quarter
of 2016.

The Washington Center for Real Estate Research produces home sales statistics in partnership
with Washington Department of Licensing and the Washington Real Estate Commission. Sales,
median home prices and affordability data for all Washington counties are available on the
Runstad Center’s website.

Media Contact: James Young, Research Director, Runstad Center for Real Estate Studies
Director, Washington Center for Real Estate Research, University of Washington
Email: jyoung4@uw.edu
Phone: (206) 685 -7088

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