A stronger economy than most of the country kept Washington real estate markets out of deteriorating trends. But the delay has meant little as the financial crisis takes hold. The recessionary economy is hurting Washington, and bucking the trend in history.
Home sales are off the highs and deflating housing values are worsening. Most markets were slower to react to the financial crisis even though one of the nation's largest culprits of the crisis, Washington Mutual made its home in Seattle. WaMu has been sold to another lender becoming a casualty of the credit crisis.
Foreclosures throughout Seattle are rising as more and more homeowners get caught in the trap and are unable to refinance their homes. Business closings and job lay-offs are hurting, despite Seattle's dynamic high-tech hub. The average value of Seattle homes are now forecast to lose 17.4% in 2009 as the bubble bursts.
Sales of lower-priced single family homes and condos, however, should increase in the second half of the year as first time buyers take advantage of the federal government's $8,000 tax credit.
 |
| City |
Forecast |
| Seattle |
− 17.4% |
| Bellingham |
− 15.1% |
| Tacoma |
− 14.1% |
| Spokane |
− 13.0% |
| Tri-Cities |
− 9.5% |
| Yakima |
− 12.6% |
Outside of Seattle, in Bellingham real estate prices are falling as sales plummet since mortgages are harder to find. Foreclosures are growing and are forecast to rise the remainder of the year in Bellingham producing an oversupply of homes on the market. Higher job losses and an unstable economy are contributing to more foreclosures. Bellingham is forecast to see average home prices decline an additional 15.1% in 2009.
The credit crisis has tightened lending in Tacoma as it unwinds from the biggest boom that the area ever experienced in real estate. The year will be a tough one for many homeowners trying to hold on through the downturn. Tacoma home values are forecast to deflate 14.1% during the year.
Until the financial crisis, Spokane was one of those places that was an exception in the nation's real estate markets. An influx of Californians often produced appreciating home values in Spokane, while most of the nation suffered through downturns. The credit crisis has changed all that as Spokane suffers through the same sort of massive headache in housing as elsewhere.
Even though Spokane is on the east side of the Cascade Mountains, the market is ailing from the economic crisis and it's micro-market booms in home sales seem to be over at least for the time being. Faced with a tougher economy, Spokane is projected to see fewer sales in 2009 and forecast by Housing Predictor to see average home values deflate 13.0% for the year.
In the Tri-City area, which includes Richland, Pasco and Kennewick they haven't been immune to the national recession, but federal stimulus money may give the area more of a boost than many other places. Hanford, designated as being an EPA clean-up site for being a former bomb making plant, is expected to receive $1.96 billion for environmental cleanup work.
New workers are moving to Kennewick and Richland, which should eventually act to boost the local economy and the housing market. As the area works through the national downturn in 2009 the housing market in the Tri-Cities will experience slower sales. Housing Predictor forecasts home values to deflate 9.5% in 2009.
In Yakima home values are taking a hit like other areas of the country, despite once being Housing Predictor's most promising market. But the tables have turned in Yakima as foreclosures rise and the local economy losses jobs. Tighter mortgage standards are hurting home sales and are expected to last at least through the remainder of the year. Yakima is forecast to see home prices tumble 12.6% on average in 2009.
