SPOKANE -- Sales of existing homes in Washington rose in the final quarter to 2011, but prices continued to drop.
A report by the Runstad Center for Real Estate Studies at the University of Washington found the rise in sales reflects bargain hunting and the large number of distressed properties in lower-priced neighborhoods.
Sales of homes were 9.6 percent higher than in the fourth quarter of 2010, the report found.
But the median price was down 8 percent from 2010, to $219,700. That's the lowest fourth-quarter price since 2003, when the median was $205,700.
"The 2012 market will continue to challenge sellers trying to preserve their equity," said Glenn Crellin, associate director of the center.
The low interest rates would ordinarily have created a much stronger real estate market, Crellin said. Rates in the fourth quarter were the lowest ever recorded, he said.
Low prices and interest rates did mean that housing affordability indexes reached record highs for the eighth consecutive quarter, he said.
Home prices were up in the Tri-Cities last year. The average sale price last year was $200,291, up from $196,833.
In Washington's urban counties, the greatest quarterly gain in sales was 17 percent in Snohomish County, while the greatest decline, 9.7 percent, was in Cowlitz County.
The biggest year-to-year drop was 13.5 percent in King County; the smallest was 2.5 percent in Kitsap County.
In nine rural counties, median prices increased from the closing quarter of 2010.
"This indicates that the housing market is uneven, with some areas, or neighborhoods, seeing price stabilization, while others have many distressed and foreclosure properties," Crellin said.
In November, there were more than 76,000 Washington homes with mortgage payments at least 90 days past due. That's enough to feed the housing market for three quarters, Crellin said.