Lingering concerns about the economy and the lack of a federal tax incentive program sent Thurston County home sales spiraling downward in August, falling 26 percent from August 2009, according to the Northwest Multiple Listing Service.
South Sound real estate professionals attributed the downturn in home sales to the expiration of a federal tax incentive program in April and to insecurity among prospective buyers about the economy and their jobs.
“Those are the overriding factors,” said Windermere real estate agent Steve Garrett about the effect of consumer confidence on home sales.
Unemployment levels remain lower in the county compared with other counties in the region, but state workers, who represent the largest body of employment here, will get another unpaid day off Tuesday as part of statewide budget cuts. And further cuts in state jobs are likely.
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Thurston County home sales fell 26.7 percent to 246 units in August from 336 units in August 2009, the combined single-family residence and condominium data show. Sales were flat month over month, falling 3 units from 249 units in July. Although home sales fell, median prices stabilized in August at $239,950 last month, compared with $239,900 in August 2009. That halts a downward trend in prices through July of this year, the data show.
Also in August:
• Pending sales fell 10.88 percent to 344 units from 386 units in 2009.
• Total number of homes for sale rose 11 percent to 2,046 units from 1,831 units last year.
• New listings in August fell to 478 units from 503 units.
There are some bright spots, however, in the South Sound real estate community.
Windermere Olympia also manages about 400 single-family residences and duplexes for rent, Garrett said, and while sales have fallen, vacancy rates have tightened and the demand for rentals has boosted rents 2 percent to 3 percent in the past year, he said.
Abbey Realty broker Jeff Crandell acknowledged that if a prospective homebuyer has a job and good credit, the combination of historically low mortgage rates and soft prices make it an attractive combination. Mortgage interest rates have fallen below 5 percent on a 30-year fixed mortgage and are even lower for a 15-year mortgage. “The table is set for buyers right now,” he said.
Still, Crandell chalked up the downturn in sales to a “climate of fear.”
“I don’t know if it’s rational or not, but employment is leading the bull by the nose,” he said, adding that the erratic nature of the stock market in recent weeks likely hasn’t helped consumer confidence either.
“Buyers are put through the ringer before they get a loan,” which has had a dampening effect on sales, he said. If interest rates remain low and prices stay soft, buyers are bound to return, Garrett said.
“We hope that people get into the homebuying frame of mind,” he said.
Rolf Boone: 360-754-5403 firstname.lastname@example.org www.theolympian.com/bizblog