Markets are beginning to rebound in terms of the downturn in housing in Washington, but the major bounce back that many have optimistically hoped for doesn’t seem to have much of a chance of materializing in the near future. Pushed by the federal tax credit, home sales experienced a strong rebound only to fizzle once the credit expired.
However, the rich technology business will help keep prices higher in much of the greater Seattle metropolitan area, home to Microsoft and dozens of other web companies as the region sustains another projected downturn in housing sales. Foreclosures haven’t been as high in Seattle as many other areas of the country providing a stronger market in terms of forward looking stabilization. But the inventory of lower priced REO properties and foreclosures that are in the pipeline will have to be sold-off first.
After months of increasing home sales, Seattle will experience slower sales in the later half of 2010 followed by further forecast declines in average home prices, projected at a softer 5.7% deflation for the year.
High joblessness is still affecting the region in Bellingham, where mortgages are harder to get as a result of bankers unwillingness to loosen mortgage under-writing criteria. But lower prices on homes that are selling should bolster the market over the long term. However, more foreclosures are expected to impact the Bellingham area over the remainder of the year, weakening any sort of overall appreciation with average homes forecast to deflate 6.1% in 2010.
The downward spiral of rapidly declining home prices may be halting in Tacoma. A back-log of foreclosures has been sold off, and there seems to be a slowdown in falling home prices at double-digit deflation as potential buyers gain interest in the market. Higher foreclosures troubled Tacoma, but that trend may have lapsed. As a result, average home prices are now forecast to deflate a softer 6.0% for the year.
Across the Cascade mountain range in Spokane, the market has been unwinding from its downturn as home sales show signs of declining given the expiration of the federal tax credit. But lower prices for the majority of homes in the community will have a major positive impact on the market. Spokane is forecast to see average housing values decline a lesser 4.7% for the year as the market makes inroads towards stabilizing.
In the Tri-Cities, composed of Richland, Pasco and Kennewick the housing market has been the strongest of any area in the state as federal money pours in to clean-up Hanford, an EPA superfund site. The Tri-City area is still forecast to experience average housing appreciation of 4.6% in 2010, despite tough national economic times.
In Yakima on the desert floor of the state, the market has encountered high foreclosures as a result of growing unemployment, mortgages that got out of hand for many homeowners and the tough economy. Yakima once led the nation as one of the fastest appreciating markets in the country, but a rough economy is taking its toll on Yakima housing, which is forecast to experience average price deflation of a softer 5.6% in 2010.