LONG BEACH — Home prices are rising in Pacific County, but still have a long way to go to catch up with the rest of Washington.
Median home prices in the county were up 17.3 percent to $212,000 in the final quarter of 2018 compared to a year earlier, according to the Washington Center for Real Estate Research at the University of Washington. In 2018 as a whole, our median home price was $189,100, a 14.6 percent gain over 2017.
Statewide prices were up 1.1 percent to a median of $356,100 in the fourth quarter of 2018, and up 4.1 percent for the whole year, to a median of $362,100. (“Median” means half of sales were for more and half for less.)
Pacific County’s median price at the end of last year more than doubled to 107 percent of what it was in 2012, when the housing recession was near its worse. Prices gained 50 percent statewide in the same period.
The county’s supply of houses continues to tighten. There were 170 home listings here at the end of December 2018, down from 172 a year earlier and less than half as many as in December 2011, according to the UW center. Statewide, home listings were up 22 percent in December compared to December 2017, when the Puget Sound real estate market was in the midst of an historic boom.
Across the entire range of prices, there was a 4.9-month inventory of homes in the county at the end of December, meaning it would in theory take that long to sell all the existing listings, compared to a 1.9-month supply statewide. Pacific County is oversupplied with expensive homes priced above $500,000 — it would take 18.8 months to sell the ones listed in December, compared to only 2.5 months statewide.
The tightening supply partly reflects the fact that many of the county’s fairly limited stock of houses has recently changed hands. Looking at real estate sales of all kinds, Pacific County Assessor Bruce Walker reported 8.4 percent more sales in 2018 than in 2017 — 1,057 compared to 975. In both 2018 and 2017, 76 percent of property in the county sold at or below its official assessed value, and 24 percent sold for more.
The total inventory of single-family homes in the county is slowly expanding — up 0.8 percent in 2017 compared to 2016 to a total of 11,325. Past U.S. censuses have found as much as half of the houses in some of the county’s beach communities are seasonally occupied vacation homes.
The number of houses in the county grew by 3.9 percent between 2012 and 2017, compared to 5.3 percent statewide.
Still hopping here
For much of the state, 2018’s real estate story was about slowing. “Existing home sales fell in the fourth quarter by 2.7 percent to a seasonally adjusted annual rate of 111,200 units compared to last quarter, and fell 3.0 percent compared to a year earlier,” UW’s real estate center said.
But in Pacific County, “things are hopping in real estate,” Pacific Realty Managing Broker Leslie Brophy said last month. “We are seeing people from all over including as far away as the East Coast (New York) and I’m currently working with two different California burn-out victims. It’s amazing to me the diversity — from people looking for a second home to many people trying to find an affordable primary residence. Some people trying to be here to beat the income tax of other states for their retirement years on a fixed income, and others just trying to get an affordable coastal property.”
UW’s housing affordability index for Pacific County slid to 130.9 at the end of 2018. That index — where 100 means a middle-income family can just qualify for a median-priced home, given a 20 percent down payment and a 30-year fixed mortgage rate at prevailing rates — was 108.1 statewide, up from 106.1 in the third quarter of 2018. This metric suggests that, given the same down payment and mortgage, a middle-income family could afford a home selling for 30.9 percent above the local median price, but only 8.1 percent above the statewide median. The county’s affordability is changing fast, however, and is down from an index of 205.8 two years earlier.
Statewide in Washington, the first-time buyer index rose by 1.2 points, ending the quarter at 63.0 and 63.7 in Pacific County. This index assumes a less expensive home, lower down payment and lower income. This means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 63.7 percent of the income required to purchase a typical starter home in Pacific County.
Pacific County real estate agents consider prices somewhere in the general vicinity of $160,000 (plus or minus about $25,000) to be the “sweet spot” in terms of affordability for local people, but countywide only 24.2 percent of listings were below $160,000 at the end of 2018. At the end of 2012, 51.9 percent of county listings were below that price. (Prices on the Long Beach Peninsula trend higher, but are not broken out in UW’s statistics.)
“Used to be you could find lots of great properties under 250 and now it’s close to impossible to find something very special in that price range unless it only has one bathroom or no garage or is from the 60s and 70s and not updated,” Brophy said. “That said, we’re also seeing some people shoot for the moon and are asking more than the market will support. Overall, I think 2019 will be a good year.”