State Real Estate Market Outlook
Realty Market Outlook Washington State Profile - Spring 2006
Housing market conditions remained solid
Washington continued to attract new residents and reported a record level of housing permits issued in 2005. Year-over-year home price gains in the state accelerated to 18.4 percent in fourth quarter 2005 and continued to outpace the nation. The state likely will continue to report construction employment gains in 2006 should housing demand remain strong.
Nevertheless, deteriorating house price affordability, particularly in Bellingham and Seattle, and rising interest rates may weigh on the state’s housing market going forward.
Innovative mortgages and investors may be influencing Washington housing demand. Interest-only and negative amortization loans accounted for 53 percent of non-prime mortgage originations in the state during the first 11 months of 2005. During the same period, investors and second-home purchasers accounted for 20 percent of Washington Alt-A mortgage originations.
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