Home sales in Washington experienced their first year-over-year increase since the last quarter of 2005, and indications are pointing to increasing sales in 2010. The first time buyers' tax credit and expansion of the federal program are aiding Washington housing markets coupled with lower home prices and low mortgage rates.
The surge in home sales, however, hasn't alleviated housing deflation in most areas of the state, where values are projected to fall further in the New Year before stabilizing. However, prices are forecast to decline at a slower rate.
After seeing a rise in home sales, Seattle new home and re-sales are holding steady rather than falling. The market had seen slower sales for three years before improving during the early summer months.
Foreclosures are increasing in Seattle as more homeowners become unemployed due to the decaying economy even though the area still has one of the nation's stronger local economies. Seattle's strong technological hub coupled with a dynamic aerospace business should boost future prospects in the recessionary economy. Seattle homes are forecast to decline an average of 9.1% in value in 2010.
| City |
Forecast |
| Seattle |
− 9.1% |
| Bellingham |
− 9.8% |
| Tacoma |
− 10.2% |
| Spokane |
− 8.7% |
| Tri-Cities |
4.6% |
| Yakima |
− 7.3% |
In Bellingham just down Interstate 5 from Seattle, job losses and harder to find mortgage financing are taking their toll on the market. Foreclosure sales and bank-assisted short sales compose the majority of sales in the slower market place, which has seen a decline in inventory. The drop in homes marketed for sale could be good news for the market's future prospects, but another round of foreclosures should begin to impact the market in the early part of the year. Bellingham is forecast to experience a more active market for sales with housing deflation of 9.8% for the year.
The deflationary cycle of home values has also impacted Tacoma, where the credit crisis has made it tougher for many homeowners to get refinanced. The trend has led to a rise in foreclosures, which will act to impact the market's housing values through at least 2010. Tacoma home prices are forecast to average a loss in value of 10.2%.
Californians fleeing the dire economic straits of the Golden State were flocking to the Inland Pacific north-west in Spokane, but then the credit crunch hit making it harder to obtain financing and the market increasingly turned sluggish. As a consequence, home sales rose and then softened. Sales should be aided by lower prices and the federal tax credit in the first half of the year. But Spokane is forecast to see average housing values decline 8.7% for the year.
In the Tri-City area, which includes Richland, Pasco and Kennewick the housing market has been the strongest of any area in the state as federal money pours in for a major environmental clean-up project. In close by Hanford an EPA superfund site has been set up on the former site of a nuclear bomb manufacturing plant. As new employees move to the area, they're buying homes in rising numbers, which should help boost the marketplace through 2010. The Tri-City area is forecast to experience average housing appreciation of 4.6% in 2010, despite recessionary economic times nationally.
Also in eastern Washington, Yakima has seen a growth in foreclosures due to rising job losses and business closures. The community was once the best housing market in the country, but Yakima's fortunes have faded and the community is now projected to experience average housing deflation of 7.3% for the year.
