Consumer confidence dragged down the Tri-Cities housing marketing this summer, but activity in the fourth quarter is picking back up.
According to statistics from the Tri-Cities Association of REALTORS®, home sales through November were down 14 percent, when compared to January through November 2010.
In 2010, 3,048 homes were sold in the Tri-Cities through November. This year, that dropped to 2622.
Fears stemming from the European debt crisis, Wall Street and Hanford layoffs, took its toll on the housing market, said Paul Roy, president of the Tri-Cities Association of REALTORS®.
“Consumer confidence is everything,” he said. “Without it, you aren’t going to make those big purchases.”
But Roy said consumer confidence is returning and there’s never been more affordable housing available, so he’s feeling good about 2012.
“Prices and interest rates are at such a place right now that more and more people are going to be doing those points of comparisons,” said Roy. “Right now, housing has improved dramatically as Economist recently reported that the monthly mortgage payment for a medium priced, single-family home in this country is now $700, compared to $1,140 in 2006.”
That means mortgage payments have declined by 40 percent in the last five years, Roy said. And it is a trend that is happening nationally, which leads to hopes of increased growth in 2012.
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University agreed.
Price declines coupled with lower mortgage interest rates have made owning a home more affordable that every before.
“The housing affordability index statewide stood at a record high of 160.7, meaning the median income family had 60.7 percent more income than the bare minimum required to qualify to purchase a median price home with a 20 percent down payment and a 30 year mortgage,” Crellin said.
Crellin said that statewide, home sales inched up .8 percent during the third quarter, with total sales of 85,870. That rate is 21.7 percent about the rate a year ago, which was artificially depressed after the expiration of the home purchase tax credit, he said.
Roy said potential buyers who have been waiting for the “right” time to buy a new home, shouldn’t wait much longer.
“When the economy begins to recover, interest rates will rise — right now they are being held to all-time lows to stimulate the economy,” he said. “When this happens, it will cost people more in housing payments every month.”
While building permits for single-family homes are slightly trailing 2010 levels, they are still above 2008-2009 levels.
From January through November, 1,269 building permits were issued throughout Benton and Franklin counties — an 11 percent drop from the same time last year.
But that’s still well above levels in 2008 and 2009, when about 1,100 homes were built each year.