Home sales continue climb

CHRIS CLOUGH

THE OLYMPIAN

Coming off a record year, the South Sound housing market kicked off 2005 in robust fashion -establishing new highs for average and median prices. The average sale price for homes in Thurston County was $224,104 in January, up 20 percent from January 2004, according to Olympic Multiple Listing Service. The previous high was $223,884 in November.

For the first time, the median price hit $200,000 -- meaning half the homes sold were above that threshold. That's good news for homeowners, not so good for buyers. "We had a very strong and healthy December and that carried over. I kept hearing comments about how busy agents were in December, and many of the sales started in December are consummated in January," said Jerry Wilkins of OMLS. "Prices aren't going anywhere but up."

Traditionally, January is a quiet period compared with spring and summer. There are fewer sales (235 in January this year compared with a high of 434 in August) and usually at lower prices. Based on January's numbers, 2005 will be a good year for homeowners, though mild weather might have contributed to sales.

"Prices will continue to rise," Wilkins said. "Based on experience as the year goes on, January is one of the lowest median prices through the 12 months -- given our current market."

Mike Hale hopes to take advantage of the rising tide. He has taken out a home equity loan to make improvements and plans to put his Olympia house on the market in spring. "We've built up some equity in the six years we've owned our house," he said. "But it needs a new roof and a touch up here and there." He said he'll pour up to $25,000 into the house if needed; then it will be on the market. "Let's just say I expect to do pretty well price-wise or else I'd just stay put," he said.

Other points of interest from the OMLS report:
- Houses took an average of 53 days to sell. That's up a few days from last fall, but a week less than a year ago.
- Month after month of brisk sales have left inventories depleted. The active listing was 780 homes versus 863 a year ago.
- As the market trends higher and builders select more expensive projects to recoup higher construction costs, prices rise. Sales of homes in categories above $200,000 show the highest percentage growth.

"The houses priced below $160,000 are making up less and less of the sales and inventory," Wilkins said. South Sound's housing market is in unprecedented territory. In 2004, the average price closed the year above $200,000 for the first time at $209,168, up 11 percent from the previous year. Before April, the average price had never eclipsed $200,000. The number of homes sold stood at 3,989, up 12 percent from 2003.

Homeowners have been reaping the benefits.
Since the close of 2001, when the average home in Thurston County sold for $163,511, house prices have climbed 28 percent.
The number of homes sold has grown even faster. In 2001, 2,933 homes were sold. Last year, it was 3,989 -- an increase of 36 percent.

Several factors are driving the prices up, Doug DeForest of Olympia Master Buildings has said:
- People moving to South Sound from the north, where housing prices in King and Pierce counties are much higher.
- A short supply of buildable lots in Pierce County , largely because of the Growth Management Act. As a result, Pierce County buyers and builders are turning their sights on Thurston County .
- Demand from current South Sound residents who are trading up to larger homes, financed in part by the equity they have amassed during the sizzling market. They also have capitalized on interest rates at or near historic lows for more than two years.

Nationwide, mortgage rates dipped to 5.63 percent and remain on par with the same time a year ago.