Friday, Aug. 15, 2008

Tri-City home sales drop 23%

By The Associated Press and Herald staff

Sales of existing homes in Benton and Franklin counties were down 23 percent for the second quarter of the year when compared with the year before, according to a Washington State University research group.

That still was better than the state's housing market, however, as the rate of decline for the second quarter was 31.7 percent statewide, the Washington Center for Real Estate Research reported Thursday.

The report also listed Benton County as having the most affordable housing in the state.

According to the center's report, 3,690 existing homes were sold in Benton and Franklin counties in the second quarter, a decline of about 6 percent compared with the first quarter of the year.

The median sale price for those homes was $163,600 in the quarter ending June 30, a marginal decline of 0.3 percent from a year ago. Only Spokane County had a better record, showing a decline of 0.1 percent in median home sale price. Price declines elsewhere in the state were steep.

Local real estate experts have said the Tri-Cities housing market is not experiencing as large a decline as elsewhere in the country because it didn't have a big growth bubble.

Dave Retter, designated broker and co-owner of Windermere Tri-Cities in Kennewick, said July 29 that the Tri-Cities had about a six-month supply of homes, which he said should mean home prices wouldn't see a big fall.

Housing inventory often is viewed as an indicator of price direction, with a supply in excess of nine months generally indicating softening prices. The WSU report said the statewide housing supply at the end of June was 11.1 months, suggesting prices will decline further.

"Buyers see and hear stories about the collapse of the national housing market everywhere and that makes them afraid to move forward with a purchase," said Glenn Crellin, director of the research center.

The center's report said 178 building permits were issued in Benton County during the second quarter, a decline of 6.8 percent from a year ago. That was the fourth-smallest decline reported in the state. Franklin County's 105 building permits represented a loss of 38.6 percent for the same period, the report said.

However, the center's statistics on building permits are outdated because it uses a national database that lags local reports, according to Jeff Losey, executive director of the Home Builders Association of Tri-Cities. "Our numbers are more accurate," he said.

Losey said the association's statistics show that in the second quarter of the year Benton County issued 219 building permits, an increase of 23 permits from the first quarter. And he said Franklin County issued 164 permits, up 27 from the first quarter.

Losey said new permits in the Tri-City area dropped 16.3 percent in the first half of 2008 compared with the same period last year. He noted the area's housing market is being indirectly affected by the national downturn because people moving into the community are unable to sell their previous homes.

According to the WSU report, the statewide sales of 89,380 homes in the quarter that ended June 30 was 8.5 percent below the sales in the first quarter.

Median sale price for the second quarter was $291,900. That was 7.8 percent below a year ago, the sharpest decline since the center began producing the statistics in 1994.

It was the third consecutive quarter with statewide declines in median prices. The current median price is about the same as that reported two years ago, the center said.

Declining prices don't necessarily help many buyers, said Jan Ellingson, of Burlington, president of Washington Realtors.

"Much of the savings in prices was consumed by higher interest rates, leaving buyers frustrated that they are not benefiting from price declines as they expected," she said.

Sales declined compared to a year ago in 38 of Washington's 39 counties. But the market was stronger in the second quarter than in the first in eight counties, and unchanged in several others.

The greatest improvements were in Okanogan and Adams counties, where sales nearly doubled. The sharpest quarter-to-quarter declines were in Wahkiakum and Skamania counties, in southwest Washington, where sales dropped more than 60 percent.

King County, the state's largest, had the highest sales, with 21,340 homes.

Median prices ranged from $111,000 in Adams County to $570,000 in San Juan County. Among urban markets, the range was $153,100 in Yakima County to $450,000 in King County.

Home prices are not declining everywhere. Fourteen counties reported higher median prices than a year ago, led by a 5.3 percent jump in Chelan County. The biggest decline among large counties was 8.9 percent in Kitsap County.