Home prices in five Washington state metropolitan areas were among the country's top 20 in terms of appreciation during the year ending...
Home prices in five Washington state metropolitan areas were among the country’s top 20 in terms of appreciation during the year ending on June 30, 2007, according to a federal report released Thursday.
Wenatchee led the nation, with a staggering 23.54 percent increase during the 12-month period, according to the Office of Federal Housing Enterprise Oversight. Wenatchee’s house values were up 5.09 percent in the second quarter of this year alone.
Others among the top 20 for year-over-year price appreciation were Longview, Seattle/Bellevue/Everett, Tacoma and Spokane.
Washington also had the distinction of having no areas among the bottom 20 of 287 metropolitan areas. Cities in California and Florida mostly dominated that category.
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The federal housing agency reported national home prices in the second quarter of this year were 0.1 percent higher than in the first quarter. Second-quarter prices were up 3.2 percent over the second quarter of 2006 — the lowest annual price change since the 1996-97 period.
“House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates and weakening buyer sentiment,” agency director James Lockhart said in a statement. “Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom.”
Five states showed year-over-year price drops, most prominently California and Michigan. Values fell 1.4 percent in each state, according to the report.
Washington homes appreciated 9.1 percent. Only Utah and Wyoming beat that.
The agency does not analyze why some states enjoy appreciation and others do not.
But economist Stanley Duobinis seconded Lockhart. “It always comes down to the local economy,” Duobinis said. “Washington’s has been an above-average performer because of the monster companies there, and their business is pretty solid.”
Government-controlled growth management also is a factor, said Duobinis, president of Crystal Ball Economics in Millersville, Md., and a nationally known expert in housing-market analysis. Washington has had growth management for more than a decade, but not all states do.
“A lot of growth restrictions are basically driving up the price of land, and therefore changing the nature of the house you can build on that land and causing prices to rise quite rapidly,” Duobinis said.
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said the five metro areas that are among the top 20 have strong economies, have proximity to strong economies or attract people from strong economies.
For example, while Wenatchee, which earned the top appreciation spot, doesn’t support high-paying jobs, the city of 30,000 is attracting equity-rich Seattle retirees drawn to its size and affordability. That causes house prices to increase.
Crellin said Longview is prospering because Cowlitz County has been pulled into the commuting circle of Greater Portland/Vancouver. Spokane is attracting California retirees, and Tacoma’s housing market is feeling the effects of homebuyers who choose the city because it’s more affordable than Seattle.
Unlike other home-appreciation measures, which usually are based on home-sales data supplied by the real-estate industry, the federal numbers are based solely on mortgage transactions involving Federal National Mortgage Association, or Fannie Mae, and Federal Home Loan Mortgage Corp., or Freddie Mac, the two federally chartered companies that underwrite most home loans.
Only single-family-house resale data is tracked; properties involving VA, FHA, jumbo, subprime and Alt-A mortgages are not included. In parts of the country, including the Seattle area, that excludes significant numbers of transactions.
In King County, for example, more than 6,700 single-family homes sold this year were expensive enough to potentially require a jumbo mortgage — one that surpasses the $417,000 loan limit imposed by Fannie Mae and Freddie Mac.
Elizabeth Rhodes: email@example.com