Washington's residential real estate market likely needs one more year to recover before the worst of the downturn in the housing market is behind us, the state's top economist told about 500 real estate professionals on Thursday.
Chief Economist Arun Raha delivered that message at the Red Lion Hotel Olympia as part of a second day of Legislative activities organized by the Washington Association of Realtors.
After Raha and other guest speakers addressed the association and its members, those in attendance boarded buses and headed to the state Capitol to meet with lawmakers about real estate issues, something the association has done for 20 years.
Before that, though, Raha delivered a hopeful message to the real estate community, one that mixed economic factors that should contribute to a recovery in the state’s housing market, but also other economic factors that the housing market still needs to confront.
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“The good news is that I do believe we’ve hit bottom and there’s only one way to go,” Raha told the audience. Still, he added, “We have to muddle through one more year.”
Helping both the national and statewide economies, which could contribute to job growth and therefore more people buying homes, are an increased number of car sales nationally, credit improving for small businesses and steady growth for the state’s aerospace, software and export-based economy.
Boeing continues to secure large orders for planes – recently announcing a $19 billion order from China – software employment is expected to grow 5 percent a year and Washington ranks No. 1 in per capita exports, Raha said.
Working against the housing market is the continuing downward trend of home prices, weak consumer confidence and the state’s 18th ranking in the country in terms of number of delinquent mortgages.
A delinquent mortgage means homeowners are behind on their payments, but the foreclosure process hasn’t started yet, Raha said. But if they do become foreclosures, that means more homes on the market being sold for less, which keeps prices depressed, he said.
“Until prices improve, you’re not going to get a recovery,” Raha said.
For the final month of 2010, the median price of a home in Thurston County essentially was unchanged at $229,000, down from $229,218, according to combined single-family residence and condominium data released by the Northwest Multiple Listing Service. Sales fell to 217 units last month from 226 in December 2009, while pending sales fell 3.83 percent in the same period.
Also speaking Thursday was Washington Realtors President Phil Harlan. Harlan, a longtime South Sound real estate agent who also is passionate about the business, urged the real estate professionals in the room to tell their lawmakers about the “magic” of homeownership and how it matters to families, neighborhoods and communities. “What we do matters,” Harlan told the audience.
Rolf Boone: 360-754-5403 firstname.lastname@example.org www.theolympian.com/bizblog