Whatcom County home values came close to stabilizing earlier this spring, according to a new federal report.
The Federal Housing Finance Agency estimates that home values in the second quarter declined less than 1 percent compared to a year earlier. That continues a trend of less steep year-over-year declines: In the first quarter, the decline was 1.8 percent, while values in the fourth quarter of 2011 were down 3.7 percent.
The second-quarter decline in Whatcom home values was also less steep that most other communities in the state. Kennewick was the only major metro area in Washington to post an increase in home values, according to the report's all-transactions home price index.
The housing market in Bellingham and other parts of the state is improving with stronger sales, said Glenn Crellin, associate director of research at the Runstad Center for Real Estate Studies, based at the University of Washington.
Crellin noted that buyers are starting to see prices and interest rates increase, making them more likely to get off the fence.
"I'm modestly optimistic (about the state real estate market)," he said. "There are still some bumps in the road. I see a gradual recovery taking place, not one with a sharp increase in prices."
Julie Hansen, an economics professor at Western Washington University, said she doesn't expect the federal home price index to fall much further.
"If we haven't yet reached a bottom, we are probably very close," she said in an email. "Lower inventory levels are certainly helping to stabilize prices."
The one aspect that still worries Crellin is distressed property. The number of mortgages more than 90 days delinquent continues to rise: According to CoreLogic, 6.4 percent of all Washington mortgages were more than 90 days delinquent in June, up from 6 percent in June 2011. Bellingham's delinquency rate was 4.4 percent, up from 4.3 percent a year earlier.
Across the U.S., some metro areas hit hard by the real estate market experienced a bit of a bounce back in home values. The Phoenix area had the highest year-over-year increase in home values, rising 6 percent. Boise, Idaho, was the next highest, at 5.9 percent.
Port St. Lucie, Fla. had the biggest decline in home values the past year, dropping 7.5 percent. Tacoma (down 6.4 percent) had the second biggest drop.
The Housing Finance Agency uses home purchases and refinance data from Fannie Mae and Freddie Mac to come up with its all-transactions home price index for metro areas. It only uses home purchases for the state index.
In Washington, the purchase-only price index increased 1.1 percent, joining most of the states in posting an increase the past year. Across the U.S., the purchase-only price index rose 1.8 percent from the previous quarter.
"Although some housing markets are still facing significant challenges, house prices were quite strong in most areas in the second quarter," said Andrew Leventis, an economist for the agency.
HOME PRICES BY WASHINGTON COMMUNITY
Changes in the all-transaction home price index for Washington metro areas from the second quarter of 2012:
Area, Year-over-year change, Five-year change
Bellingham, down 0.9 percent, down 15.3 percent
Bremerton, down 3.4 percent, down 25.4 percent
Kennewick, up 0.8 percent, 6.1 percent
Longview, down 4.5 percent, down 26.7 percent
Mount Vernon, down 3.3 percent, down 25 percent
Olympia, down 4.6 percent, down 22.2 percent
Seattle, down 1.7 percent, down 25.4 percent
Spokane, down 2.4 percent, down 17.7 percent
Tacoma, down 6.4 percent, down 31.6 percent
Wenatchee, down 2 percent, down 16.8 percent
Yakima, down 0.6 percent, down 4.4 percent
SOURCE: FEDERAL HOUSING FINANCE AGENCY
Reach DAVE GALLAGHER at dave.gallagher@bellinghamherald.com or call 715-2269.
