In Washington state, foreclosures and sub-prime lending occurred at lower rates than just about anywhere in the nation. Home appreciation in Washington also continues to out-perform the rest of the nation with year-to-year price increases every quarter since the spring of 1995. According to the Center for Real Estate Research (CRER) at Washington State University, home prices in Washington have increased an average of 8.1% since the same time last year.
As of mid-June, sub-prime, adjustable-rate loans represented 20% of loans nationally, but just 6% of home loans in Washington. Of those mortgages, 5% in Washington were delinquent, compared with 8.9% nationwide. The largest increase in foreclosure activity was in Nevada (166%); while the smallest increase was in Washington state (18%). "In other words," said Steve Francks, Washington Realtors Chief Executive Officer, "ours is a stable and responsible market place. What we really should be asking is what can we do to provide more home choices so that people don't have to consider risky loans in the first place?"
The CRER's "Central Puget Sound Real Estate Research Report" notes that the housing market isn't keeping pace with the growth of population, which is continuing to increase at 1.8% per year. State demographers expect Washington's population to increase by nearly one million over the present decade and to reach 6.8 million by 2010. About two-thirds of the growth is due to in-migration; the rest is a result of growth of families now living in Washington.
A balanced market is one in which there is a six month supply of homes. In Washington there is currently a four month inventory. Francks explained that home prices are not likely to fall in Washington until an over-supply of homes exists -- a situation unlikely to occur since the state's population is growing at such a robust rate.
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