For now, Pullman, Wash., real estate is a sellers' market.
With housing values at an all-time high and trending upward, local real estate agents say listing prices for available properties are being driven skyward and are likely edging out lower-income buyers.
Jordyn Lee, senior public relations specialist with Zillow, an online real estate database company, said his organization places a value on every home in the U.S., regardless of whether or not the property is listed for sale.
He said according to that data, Pullman home values have risen 14.9% over the past year alone to a median amount of around $280,600.
"I looked at a time series, and home values in Pullman have never been higher than $280,600," Lee said.
The main driver behind these quickly rising prices, Lee said, are simple market forces of supply and demand -- there is a high demand for Pullman real estate but little inventory to meet the need, especially compared to this time last year.
"In Pullman, there are 12% fewer homes on that market now than at this time last year," Lee said. "This story is what's driving home prices higher all around the country, not just in Pullman."
According to Zillow data, listed prices of for-sale homes in Pullman are around $315,000 on average and climbing as a result of this upward trend in home valuation.
Remax real estate agent Joe Pitzer said another facet to the problem is a lack of developers building homes for purchase by lower-income demographics.
Pitzer said while there are numerous developments underway building out units for renters, there is little interest in building starter homes for new or low-income buyers.
"There's a problem, and I don't know what the answer is," Pitzer said. "There's just nobody building affordable housing at the lower end in Pullman."
Lynn Kramer, owner of Windermere Real Estate, said an additional complication is with demand so high, buyers often feel it is necessary to offer more than the assessed value of the home.
While this may seem like a necessary part of the bartering process, Kramer said banks may be skeptical about issuing loans to finance a purchase higher than the market amount without evidence to justify the higher price.
"We don't have previous sales that they can use as comparables to justify the inflated price to the bank," Kramer said. "Either (the) buyer has to come to the table with the difference in cash or the seller has to agree to reduce to the appraised price or you don't have a deal."
Kramer said most sellers would rather just go back to market rather than reach a compromise with a low-income buyer. She said these kinds of conditions could leave out many first time homeowners and people who may not have a lot of money to put down ahead of the purchase.
With demand on local real estate continuing to grow and little private home development on the horizon, Kramer said she doesn't expect housing prices to come down anytime soon.
"I expect that they'll continue to to go up," Kramer said. "Maybe not as fast as they have in the last quarter, but who knows, I don't have a crystal ball."
Tribune Content Agency