Tri-Cities doesn't see boost in home sales like rest of state

By Kristi Pihl, Tri-City HeraldNovember 6, 2012 

Washington saw more homes sold from July through September than during any quarter since the beginning of the recession in December 2007.

However, the Tri-Cities did not follow that trend and was one of only two metropolitan markets in the state reporting slower home sales, according to data released Monday by the Runstad Center for Real Estate Studies at the University of Washington.

Still, Benton County continues to be the metropolitan county that offers the most affordable housing for first-time homebuyers, a result of the area's high wages.

The Tri-Cities saw a modest decline in total home sales, with the percentage of change so close to zero that it didn't indicate a swing one way or another, said Glenn Crellin, the center's associate director for research.

"A steady market is certainly better than a roller coaster," he said.

Benton County saw a 1 percent decline in home sales compared with the same quarter last year, according to the seasonally adjusted annual rates reported on by the center. Franklin County's sales were down 1.6 percent.

That was expected, Crellin said, because a decrease in spending at Hanford tends to ripple through the economy.

"In a sense, you are playing a little bit of downward catch-up," he said.

Overall, the state saw home sales jump up 11.9 percent from the same time period in 2011, according to the report.

If this trend continues, Benton County will have recorded 2,980 homes sold this year, while Franklin County will end the year at 610. The state will see 97,860 homes sold this year, according to the report.

Through September, there were 2,165 homes sold in Benton and Franklin counties, according to data from the Tri-City Association of Realtors. That's about four more homes than the same time in 2011.

Crellin said his numbers include sales not included in the metropolitan listing service that the association uses. Those sales tend to make up about 15 percent of the market and include homes sold by the owner and not through a real estate agent, for example.

Nate Biehl, president of the Tri-City Association of Realtors, said the Tri-Cities reported 284 homes sold during October, which is about the historical average for the area. The market is stable, he said.

Buyers continue to struggle with home loans, said Biehl, broker/owner of RE/MAX First Advantage. Real estate agents are seeing the highest failure rate in years for buyers lining up financing.

It no longer is a strong seller's market in the Tri-Cities, he said. And sellers continue to adjust to that.

Buyers are looking for homes that are up to date and staged. They also want to buy for less, Biehl said.

Median resale prices in the Tri-Cities did increase about 1.9 percent to $184,800, according to the report. The statewide average saw a 7.9 percent gain to $243,100.

Part of that is because buyers can afford to pay more when interest rates are so low, Crellin said.

The Tri-Cities didn't see a decline in prices as other markets, so there isn't as strong of an incentive for buyers to wait for prices to reach bottom to take advantage of low interest rates, he said.

But the fact that the Tri-Cities didn't see a decline in value confirms the stability of the area's home values, Biehl said.

Benton County had a first-time home buyer index of 127.3, which means that the typical first-time home buyer has about 27.3 percent more than the bare minimum needed to qualify to buy a typical starter home.

Franklin County's index was 95.8, which means that the typical first-time homebuyer has about 4.2 percent less than the bare minimum needed to qualify.

Biehl said he's anticipating a good 2013. The distraction of the presidential race will be over. And having the housing market improve in other areas of the country helps the Tri-City market because potential buyers must wait to sell their homes elsewhere.

Another factor, Biehl said, is the future of the generation known as the millennials. Some of those born in the 1980's and 90's have roomed with friends or lived at home longer. They soon will be entering the housing market, he predicts.

There are more millennials than baby boomers, who brought one of the biggest housing booms since loans became widely used, Biehl said.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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