A sea of home-sale signs

Nothing signals a slowdown in a real estate market more than the increasing number of "For Sale" signs lining the many Yakima Valley streets.

Sure, the market is not anywhere near the dire straits of other areas nationwide. The percentage decline of existing home sales in several states, such as California, has been in double digits for several years.

But the region is not seeing much of the double-digit percentage increases in sales and values. Just a little over a year ago, home sales in Yakima County increased 24.8 percent in the first quarter of 2007 from the same period in 2006.

"The market is not dead, but it's certainly slowed down," said Doug Rich, broker of Prestige Realty in Yakima.

Brandi Berg and her husband have had their 2,705-square-foot home in Moxee on and off the market for a year. They've had a couple of viewings, but no offers.

"It's just been very slow," Berg said.

According to the Headwaters: The Source, a Selah-based firm that tracks historical housing trends, the number of all homes sold in July decreased 23.1 percent.

Existing home sales during the second quarter of 2008 decreased 7.1 percent from the same period a year ago, compared with the statewide decline of 8.5 percent, according to the Washington Center for Real Estate Research at Washington State University.

The national credit crunch has played a role in the market slowdown, said Mike Kokenge, an agent with Coldwell Banker Associated Realtors, who is also serving as president of the Yakima Association of Realtors.

A tighter credit market makes it tougher for many buyers to get the funding necessary to purchase the house they want. A financial meltdown left many banks scrambling for liquidity, forcing many mortgage lenders to tighten the requirements required to qualify for a home loan.

Despite dwindling sales, home values continue to appreciate. The median resale price for existing homes in Yakima Valley increased 4.9 percent during the second quarter from the same period a year ago, while statewide home prices decreased 7.8 percent, according to the Washington Center.

Headwaters shows a similar trend for homes sold in July. The average price for all homes sold during the month increased 6 percent.

The slight price increase may reflect consumers who are able to purchase more house for their money as sellers try to get their homes off a crowded market, said Glenn Crellin, executive director of The Washington Center for Real Estate Research.

Indeed, in a sea of "for sale" signs, nothing lures a buyer like a good price reduction.

"If it looks like prices are still going up, the tendency is for the seller is to ask (for) more than the property will likely sell for," Crellin said. "That creates a situation that will lead to that property sitting on that market for a while."

That was a situation Kristi and Mike Lewis could not afford when they put their 2,300-square-foot Moxee home on the market earlier this summer. Mike Lewis received a promotion that required the family to move to Spokane as soon as possible.

They initially listed the home for $205,000, but with several other homes in their neighborhood also for sale, it was clear that price was not low enough. Over several weeks, the couple would chop the price three times.

They eventually found a buyer, thanks to a friend, and the home sold for $189,000.

Despite the multiple price reductions, the Lewis family still came out ahead -- the selling price was well above the $130,000 the couple paid in 2004.

But Kristi Lewis knows that her family could have done better if they had sold the house a while ago.

"It's a bummer, but what can you do?" she said. "We needed to get out of there."

Sellers like the Lewis family will have to make adjustments as buyers have plenty of homes to choose from.

The Washington Center estimates that Yakima County had a 10.6-month supply of homes as of the end of the second quarter, providing enough units to sell on the market for more than 10 months if no additional homes are put up for sale. Two years ago, that supply was at 5.8 months.

Homes in certain price ranges suffered more than others. There were enough homes in the $500,000-plus range, for example, to supply the market for more than three years and enough homes in the $250,000 to $500,000 range to sustain the market for more than 16 months.

When the market was more brisk, it was not unusual for a potential buyer to forgo certain expectations if it meant beating multiple offers, Crellin said.

But that's all changed now. "They're expecting a well-built house that is well maintained and one they can move in and begin enjoying the house without having to make substantial repairs and updates," Crellin said.

Kokenge agrees. "We tell our customers, 'Make your house look the best you can,'" he said.

While watching a show on HGTV this summer, Berg learned that putting on a fresh coat of paint may make a home more appealing for potential buyers. She took the advice and painted two bedrooms and a bathroom.

She wonders if the effort will pay off. "I don't think that's going to make it go faster," Berg said.

* Mai Hoang can be reached at 577-7685, or at mhoang@yakimaherald.com.

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