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Washington Real Estate Market: When will Home Values Return?

Homes sales in Washington have continued a brisk, upward pace, both in 2009 and the first two quarters of 2010. However, the upward trend in home sales wasn’t reflected in home values.

The news in Washington, however, is one of optimism for homeowners. In fact, if you own a home in Washington, according to the Fiserv Case-Shiller Indexes, the value is expected to return to the 2007-2008 peak levels before 2013. If you own a Central Washington home, then the value is expected to return between 2013 and 2014.

Home Sales Increasing

The Washington Center for Real Estate Research at Washington State University reported that homes sales in Washington were up over 21 percent in the fourth quarter of 2009, compared with the third quarter. That is a 46 percent increase during the same period in 2008.

Home Values Decreasing

While homes sales continued to show increases, however, median home values declined during the fourth quarter of 2009 to $244,000, an eight percent decrease from the same time a year earlier. The Washington Center for Real Estate Research found that home values were also impacted due to longer selling times and strong competition. Foreclosures and short sales also negatively impacted homes values during this period.

A Healthy Economy

The healthy economy of Washington has certainly minimized losses in home values. As a leading producer of lumber and crops, Washington has always led the way in terms of low unemployment. Other strong industries that have kept Washington’s unemployment at bay include computer and aircraft manufacturing, as well as livestock and commercial fishing. The cost of living in Washington is about three percent above the national average. Housing costs stand at about two percent above the national average.

Recently, home sales in Washington have cooled off, mainly due to the expiration of the federal tax credit. In fact, home sales fell 45 percent between April and May in Kitsap County alone. The rest of the state saw an average decrease of 44 percent. Nearly 58,000 home buyers took advantage of the tax credit, thereby generating $6.5 billion for the state.

New listings in Kitsap County dropped 25 percent during the same time period; the rest of the state saw a decrease of 26 percent for new listings. However, during the same time period, home values rose between three and four percent throughout the state.

The price point for new listings, which is about 10 to 15 percent less overall than they were a year ago, is sure to attract new buyers. In conclusion, take comfort in the fact that your Washington home value is expected to rebound rather quickly, thanks to a robust economy and strong home sales.

10 Largest Cities in Washington: