The combination of these figures meant that a home buyer in 2000 was applying 23% of her gross wages to principal and interest pay­ments on a median priced home. By 2007, that number climbed to 32%.
Since the peak in 2007 home prices have come down. Our median sales price now stands at $243,000, which translates to just 26% of 2007 wages.
Affordability and value, however, are both relative terms. The lower price ranges are seeing affordability, but the upper-end price range as a group has not returned to relative affordability. As a result, sales of properties over $450,000 are down 65% from a year ago.

The disparity between the pace of sales in those categories has at least one explanation.
The lower end of our local market has been the most in.uenced by bank-owned foreclosure properties. During the .rst quarter of 2009, 45% of all sales at $200,000 and under were bank owned. In contrast, only 16% of sales over $200,000 were foreclosed properties.
These sales are an interesting case study in market value because the banks are motivated to sell today. Banks do not like being in the business of owning houses, but they also want to recover as high a price as they can. Locally, we are not seeing banks under pricing their homes. There are certainly a few examples of that, but we are not seeing that phenomenon in Thurston County (like a few hard hit communities around the country have seen.) Instead, we see banks setting the asking price at today’s market value – not some hoped-for value in the future.
The banks’ desire to price at market value has provided a lot of comparable sales activity that in turn guides other sellers to successful asking prices.

Homes in the upper price ranges, however, do not have as much activity to inform the pricing decision. These sellers should
instead consider that lack of activity a signal that prices are too
high. They will see positive activity once prices there re.ect relative affordability. There are homes in those upper ranges that are offering that value, and those sellers are .nding success in this market.
Also, this does not mean that sellers at the upper end are not making money. Our research shows that the vast majority are making returns right in line with our long-established historical performance. See more information on our blog at www.cbolympia.com.

Well-Priced Homes Still Selling Quickly

Affordability and interest rates are bringing buyers back to the market. They are acting quickly when they see value and steering clear of properties that aren’t quite there yet. Every month we conduct an extensive study of every MLS home sale in Thurston County. Part of the study shows the pace of sales relative to how well-priced the homes were when they came on the market.
As with past studies, our most recent report reveals that well priced homes (those that did not require a price reduction before selling) are selling near full price and in an average of just 49 days.
The homes that required at least one price reduction before selling required an average price reduction of 18.1% and were on market for an average of 204 days. These same homes are selling in just 29 days when they are reduced to their .nal asking price. This is a clear signal that buyers are still active but are just waiting to see value. See Chart 2.
This holds true for all price ranges, as well. Even with sales in the upper-end off considerably from a year ago, homes in that price range are .nding buyers in just 20 days of reaching the .nal asking price.

$8,000 First-Time Home Buyer Tax Credit
You have probably heard of the federal government’s income tax credit for .rst-time home buyers. This new program means that virtually all of our local .rst-time buyers will receive an $8,000 refundable tax credit against 2009 income. Visit our blog for more details.

Mortgage Rates
The week ending April 29, 2009 saw the 30 year, .xed-rate mortgage rates hit the lowest levels on record, 4.78%, according to Freddie Mac’s weekly mortgage survey.
Whether you are in the market to buy or are simply looking to reduce monthly expenses, it is a great time to be talking with your lender.