Volatility may describe the nation’s current economic situation, but a different adjective is more accurate for the Tri-City housing market. “Consistency. That’s the best thing we can hope for,” said Dave Retter, designated broker and co-owner of Windermere Tri-Cities in Kennewick.
“It’s not glamorous,” he said. “But I think it’s a positive when things are consistent.” The Tri-City housing market continued to hold steady in 2007, with home prices increasing and sales tracking with 2006, according to information from the Tri-City Association of Realtors.
Although building permits for single-family homes decreased about 7 percent, the trends of last year satisfy industry officials that the local market is healthy. The smaller number of permits came mostly from Pasco, which saw about a 24 percent dip, from 679 in 2006 to 514 in 2007. Kennewick, Richland and West Richland all reported growth in permit numbers.
Pasco City Manager Gary Crutchfield called the slower pace a relief after the city issued about 1,000 permits in both 2004 and 2005. “It’s subsiding back to a more manageable level, from a community standpoint,” he said. “A level which is more readily accommodated or absorbed into the community.”
Booming growth can put a strain on the city, he said, especially schools. For 2008, he’s predicting about 400 or 500 new permits, which equates to about a 3 percent growth rate — one that’s healthy for just about any community, he said.
“I’m not wringing my hands that we’re falling apart here,” he added. Several factors have kept the area’s housing market from experiencing the free fall that hit other regions.
For one, the economy remains the fastest growing in the state at 5.8 percent at the end of last year, said Dean Schau, regional labor economist. Affordable prices also mean home buyers weren’t as inclined to go for loans they couldn’t afford, said Bill Prussing, 2008 president of the Tri-City Association of Realtors and an associate broker with Distinctive Properties Inc. in Kennewick.
The average home sale price rose to just more than $190,000 in December, about a 6 percent increase from $179,600 in December 2006. And the median home sale price increased about 4 percent through December, from $160,900 in 2006 to $167,400 in 2007.
“You get a heck of a value for your money,” Schau said. Prussing also credited the even market with discouraging speculation by investors who buy and sell property, hoping for a hefty profit from rapid appreciation.
Home sales stayed about even with 2006, down about .5 percent, from 3,647 to 3,629, according to the Tri-City Association of Realtors. Nationally, home sales in 2007 fell nearly 13 percent from 2006, according to the National Association of Realtors.
Realtor Vicki Monteagudo attributed a slow December in the Tri-Cities to fear among would-be buyers sparked by the national economic and housing market slumps. Monteagudo, an agent with Coldwell Banker Tomlinson Associated Brokers, said potential buyers were worried they would buy a home and its value would dip.
But land and construction prices continue to increase, which means prices will hold steady here, she said. “(The Tri-Cities) is like a conservative mutual fund — you’re not going to lose here,” she said.
Bad news across the country can affect people’s perception of the local market, industry officials agreed. “If you keep hearing how bad the economy is, and how bad it’s going to be, you start to buy into it,” said Jeff Losey, executive director of the Home Builders Association of Tri-Cities. “It’s not holding a lot of water here in the Tri-Cities. We have a nice steady increase,” even though it’s slowed off a bit, he said.
Home inventory at year’s end was down about 9 percent from December 2006, falling from 1,289 houses to 1,174, according to information from the Tri-City Association of Realtors. While the number may be a little lower than what some would like to see, Prussing said it indicates a relative balance between buyers and sellers.
Retter reported an inventory of 1,246 houses last week, which he called “a wonderful number.” “If we get below 1,200 and stay there consistently, we’ll become a seller’s market,” he said. Too much inventory means home prices would see little or no appreciation, or possibly depreciation, he said.
“We should all be very happy with our economy and our marketplace here in the Tri-Cities,” Retter said. New construction accounted for about 30 percent of home sales, Prussing said, another indicator of a good market.
“They wouldn’t build if they didn’t think they could sell,” he said. Dave Martin, construction manager for Fenix Homes LLC in Kennewick, said 2007 was a busy year for his company.
Fenix built 12 homes last year, the most in four years, he said, and 2008 looks to be strong with seven homes in progress. “As far as I can see, it’s probably as steady as it’s ever been,” said Martin, who’s been in the area for almost 32 years.
Hayden Homes, which builds in 12 communities in Washington and Oregon, reported Tri-Cities is one of its top markets. “We’ve been very excited and encouraged by the market,” said Deborah Flagan, vice president of sales and marketing.
January is going well for the company locally, she said, as low mortgage interest rates have generated more buyer interest. Other industry officials also anticipate the steady trend to continue in 2008.
HousingPredictor.com, an organization that provides housing market forecasts for areas around the country, predicts prices in the Tri-Cities to rise about 2 percent this year. Even though the year might not set a record, Retter said that’s not a bad thing. “You can’t always be setting records every year,” he said. “Just because you don’t set a record every year doesn’t mean the market’s not OK.”
By: INGRID STEGEMOELLER, TRI-CITY HERALD STAFF WRITER