Washington Center for Real Estate Research
LONG BEACH — Pacific County houses sold like fresh spring salmon throughout 2017, according to a recent analysis by the Center for Real Estate Research at the University of Washington. It marked the second year in a row with existing home sales above 500, about double the pace of five years earlier.
Statewide home sales rose 7.1 percent between the last three months of 2017 compared to a year earlier. They rose 10.4 percent in Pacific County.
Although home prices in the county remain a bargain compared to the rest of the state, the median resale price surged 21.5 percent between the fourth quarter of 2017 and the same three months in 2016, compared to 8.8 percent statewide. The median home price — meaning half sold for more and half for less — was $180,700 in Pacific County at the end of 2017, far less than the state average of $352,200.
In 2017 as a whole, the county’s median home sale price was $165,000, a 15 percent gain from 2016 and a 24.4 percent improvement over 2010 prices.
The county’s median price compared to the rest of Western Washington tends to be lower due to a higher percentage of manufactured homes, and an inventory of smaller, antiquated houses in the Raymond area and some of the seashore towns. Higher-priced houses are heavily concentrated on the Long Beach Peninsula, where Ocean Beach School District accounted for $1.7 billion of Pacific County’s assessed value in 2017, or 71.5 percent of the county total of $2.378 billion.
Pacific’s annual median price was essentially tied with Grays Harbor County as lowest in Western Washington and fifth lowest among all 39 counties. The state’s overall median price for the entire year of 2017 was $348,900.
Just before the Great Recession, county home prices crested at $188,500 in the fourth quarter of 2008 on an inflation-adjusted basis, so there still is a little way to go to full price recovery.
The county’s housing supply has been getting tighter for several years, with 172 listings in 2017, less than half the number for sale in 2011, according to the real estate center. In December 2017, the real estate center figures there was about a 4.5-month supply of houses on Pacific County’s real estate market. Houses priced at $500,000 and more continue to take longer to find buyers, with about an 8.2 month supply on the market in December. The county had a modest 2.3 percent more homes on the market at the end of 2017 compared to a year earlier, perhaps reflecting new listings by owners previously waiting for improvements in the market. Statewide, there was only a 1.3 month supply of houses in December, an 18.8 percent decrease in availability during the year.
Nearly 60 percent of Pacific County home listings were below $250,000 at the end of 2017, compared to only 27.8 percent statewide. Only about 8 percent of county listing were $500,000 or more. Statewide, 29.5 percent of listing were above $500,000. In King County — home to Seattle — 75 percent of home listings were above $500,000. In Seattle itself, median home prices reached $777,000 this February, a $20,000 increase in one month, according to Seattle news media.
Overall, there were an estimated 11,240 single-family homes in Pacific County at the end of 2016, the most recent complete year for which that total was compiled. That was a 4.4 percent increase over 2011, compared to 4.9 percent for the state as a whole. The county’s total number of dwelling units of all types was 15,785 in 2016, a 3.1 percent gain from 2011, compared to 6 percent statewide.
Although Pacific County remains affordable compared to the rest of Western Washington, it is becoming less so, the real estate center reported.
The center has for years compiled a “Housing Affordability Index” that analyzes the extent to which experienced and first-time home purchasers can buy a home in each county, based on median home prices, average local incomes, mortgage rates and other factors.
Pacific’s affordability score in the fourth quarter of 2017 was 166.2, meaning an average purchaser could probably qualify to purchase a median-price $180,700 home or even one priced 66 percent higher than the median price. But as real estate prices have increased, the county’s affordability index has rapidly decreased — by more than 19 percent in just one year. Just a year earlier in the fourth quarter of 2016, the index was 205.8.
Statewide housing affordability was higher in the fourth quarter than the previous quarter, but nearly 10 percent less than the previous year. That index — where 100 means a middle-income family can just qualify for a median-priced home, given a 20 percent down payment and a 30-year fixed mortgage rate at prevailing rates — was 118.2, up from 114.4 in the fourth quarter of 2017, the real estate center reported. This suggests that, given the same down payment and mortgage, a middle-income family can afford a home selling for 18.2 percent above the median.
Pacific County has become unaffordable for first-time buyers, with an index score of 81.3 at the end of 2017. This was a drastic change since the first half of 2016, when first-time buyers could afford a starter home somewhere in the county.
Statewide, the first-time buyer index increased by 2.3 points, ending the quarter at 68.3. This index assumes a less expensive home, lower down payment and lower income. This means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 68.3 percent of the income required to purchase a typical starter home statewide, the real estate center said.