SPOKANE — The residential real estate market improved in Washington for the third quarter in a row, according to a report released Thursday by the University of Washington.
The report said sales of existing homes rose 14.7 percent in the first quarter of 2013, compared to the same period a year ago. In Yakima County, sales of existing homes increased by 8.5 percent during the first quarter of this year compared to a year ago.
Prices were also on the rise. The statewide median home price was $237,000 in the first quarter, up 14.1 percent from the same time last year.
The report was prepared by the Runstad Center for Real Estate Studies at the university.
“Washington’s housing market is clearly recovering,” said Glenn Crellin, the center’s associate director for research. “However, the pace of sales activity is being held back somewhat by the limited inventory of homes available for sale.”
Crellin said the shortage of listings brings “classic supply and demand pressure on prices.”
Quarter-to-quarter home sales increased in 28 of Washington’s 39 counties. Some counties with a slower sales pace were urban markets such as King County, which entered recovery mode earlier than some smaller communities, the report said.
The first quarter of 2013 actually saw the highest seasonally adjusted sales rate since the third quarter of 2007, Crellin said.
The statewide median home price was $237,600, with a high of $412,500 in San Juan County and a low of $65,000 in rural Lincoln County.
While Yakima County has seen homes sales increase for the last seven quarters, the median price started to increase only more recently and at a slower rate than the number of sales.
Yakima County’s median home price was $146,800, an increase of 7 percent from the same period a year ago.
Despite the increased median prices, continued declines in mortgage interest rates allowed improvement in the Housing Affordability Index. This measures the ability of median-income families to buy median-price homes, assuming a 20 percent down payment and 30-year mortgage at prevailing rates.
Crellin said the index showed that middle-income families, at an annual income of $73,150, could qualify for a home priced well above the statewide median. Only San Juan County had an index below 100, meaning that a typical middle-income family there could not quite afford a median-priced home in the county.
King County, which includes Seattle, had the second-lowest affordability at 134.6, meaning the typical family could afford a home priced about 35 percent above the local median.
Meanwhile, the statewide first-time buyer index reached a record high of 104.4 during the first quarter, meaning a household earning 70 percent of the median household income could just afford a typical starter home.
Statewide, the most affordable community was Lincoln County, just west of Spokane. For first-time buyers in metropolitan areas, Benton County, where Richland and Kennewick are located, was the most affordable and King County the least affordable.
In Yakima County, the homebuyer affordability index was 201.5, which means a family making the average family income — money made by two or more people related by blood, marriage or adoption — of $51,375 could afford a home that was double the median home price. The first-time home buyer index in Yakima County was 109.5, which means that a household earning less than the average household income should be able to afford a typical starter home.
“The biggest current impediment to the housing market remains a shortage of homes available for sale,” Crellin said. “Construction activity is improving, but builders cannot improve availability overnight. Lenders need to release properties which have been foreclosed, but are still owned by the lender to allow the market to stabilize and prevent renewed bubble conditions.”
• Yakima Herald-Republic reporter Mai Hoang contributed to this report.