Kittitas county real estate analysis

2012-2016 Kittitas County Real Estate
Market Analysis
By Ty Candler, Jon Holzberger, Noah Grant
January 25th
, 2017
Department of Economics
Central Washington University

1
LEGEND
Section Page
1. Introduction ……………………………………………………………………………………………………………… 2
2. Market Trends………………………………………………………………………………………………………….. 3
3. EconometricAnalysis……………………………………………………………………………………………….. 6
4. Comparative MarketAnalysis…………………………………………………………………………………… 8
5. Conclusion ………………………………………………………………………………………………………………… 9
6. References………………………………………………………………………………………………………………… 10
7. Appendix …………………………………………………………………………………………………………………… 11

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1. Introduction
The Kittitas county real estate housing market is the focus of this discussion, more
specifically; this is an analysis of the 2012-2016 Kittitas county single-family residential
home real estate market. To conduct the study, we have collected all the data on real
estate sales in Kittitas county from the county assessor website and the Washington
University real estate website. Since the analysis we conducted is specific to single-
family residential homes, we trimmed the data of any real estate sale in Kittitas that was
not a specified single-family residential home. We also chose a time period of four years,
therefore all sales that did not fall within 2012 – 2016 were removed from the study.
Additionally, all incomplete or unfit data were removed along with all sale prices below
$30,000.
The purpose of this study is to identify a set of variables that affect the total value
of single-family residential homes in Kittitas County. Once we discover our variables, we
will analyze the quantitative value of each variable. The purpose of this is to be able to
take the set of variables and to find total value of the home based on the value of each
variable. This analysis will paint a clearer picture of the overall single-family residential
housing market in Kittitas county as well as provide a set of quantitative variables to
estimate the property value of the real estate.

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2.Market Trends
The graph figure 1 showsthe numberof single-familyexistinghome salesinKittitasCountyover
a four-yearperiodseparatedbyquarters.Asyoucansee inFigure 1 above,there isareoccurring
patternoverthe time periodof the graph. Throughoutthe year the existingsingle-familyhome sales
experiencesatrend.The salesnumbersincreaseinquarters3and 4, while inquarters1and 4 existing
single familyhomesalesdecrease showingan upanddownfluctuationinhome salesthroughoutthe
year. Thisis a seasonal trend,inthe monthsinproximityof winterthere are notas manyhome sales;in
the monthsinproximityof summerhome salesare ata large increase.

4
Figure 2 above showsthe numberof single-familyresidential homesbuildingpermits
permittedinKittitascountyduringthe yearsof 2012 – 2016 separatedmonthly.There isatrend
throughoutthe yearin whichthe numberof buildingpermitspermittedfluctuates.Generally,
throughoutthe yearsof 2012 – 2016 the numberof buildingpermitsincreasedinthe summer
monthsand decreasedinproximitytowintermonths.

5
Figures4 and 5 showthe mediansingle-familyhousingprices,basedonthe 2016 value of the
dollar,inKittitasCountyover2012 – 2016 separatedbyquarters.Infigure 5 forclarityI trimmed
out the lowestpopulationandsale citiestogive aclearerlessvolatile figure.Now asyoucan see
inthe graph,Cle Elumand Roslynhave consistently hadthe highestmedianhousingpricesover
the last fouryearsfollowedbyEllensburg.Kittitashasthe consistentlowestmedianhousing
prices.There are no consistentpatternasfar as medianhousingpricesoverthe course of a year
provingitto be random overfourquarters.

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3.Econometric Analysis
Table 1. Summary Statistics for Single Family Housing in Kittitas County, 2012-2016
Variable Mean St.Dev Max Min
Total PropertyArea(Acres) 1.52 3.38 53.36 0.00
Total Home Area(Square Feet) 1817.45 816.13 14548.00 296.00
Bedrooms 2.80 0.98 11.00 0.00
Bathrooms 1.87 1.08 15.00 0.00
Total BasementArea(Square Feet) 160.88 408.23 5104.00 0.00
Total Garage Area (Square Feet) 376.01 413.88 9712.00 0.00
Cle Elum 0.31 0.46 1.00 0.00
Easton 0.01 0.10 1.00 0.00
Ellensburg 0.55 0.50 1.00 0.00
Kittitas 0.04 0.18 1.00 0.00
Pass 0.01 0.10 1.00 0.00
Ronald 0.03 0.18 1.00 0.00
Roslyn 0.05 0.20 1.00 0.00
Thorp 0.01 0.08 1.00 0.00
Table 1 above showsthe summarystatisticsforsingle-familyhousinginKittitasCountyoverthe
course of 2012 – 2016. The average single familyhome inKittitasCountyis1817.45 square feet
on 1.52 acres with2.8 bedroomsand1.87 bathrooms.The average basementareais160.88
square feetandthe average garage area is 376.01. Total home square footage hasthe largest
standarddeviationof all the variablesmeaningitisthe mosthighlyvolatile.

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Table 2. Determinants of Single Family Housing Prices in
Kittitas County, 2012-2016
Variable (1)
Total PropertyArea(Acres) .022***
(.002)
Total Home Area(Square Feet) .0002***
(0.000015)
Bedrooms .0076
(.012)
Bathrooms .076***
(.011)
Total BasementArea(Square Feet) .00016***
(.0000024)
Total Garage Area (Square Feet) .00019***
(.0000026)
Cle Elum .052
(.245)
Easton -.207
(.263)
Ellensburg -.153
(.245)
Kittitas -.5**
(.25)
Pass .2754
9.263)
Ronald -.029
(.2503)
Roslyn .21
(.24)
Thorp -.071
(.271)
Table 2 isthe resultsof a regressionanalysisranonvariablesaffectingKittitascounty
single-familyresidential homes.The highlightedvariablesaboveare all of significancetothis
experiment.Theirlevel of significance ismarkedbythe *(star) symbol,ona scale of one to three
stars, three starsisthe highestlevel of significance.Asyoucansee we foundmultiplevariableto
be of the most significance andmanyvariablesinsignificanttothe experiment.Todetermine

8
significance, we measuredthe Pvalue;aP value of .10 or lessis*, a Pvalue of .05 or lessis**, a
P value of .01 or lessis***.
The firstnumberinsequence correspondingwitheachvariablereferstothe coefficient
of the variable.Forexample: the total propertyarea,measuredinacres,hasa coefficientof
.022. Thismeansfor everyextraacre of propertythe house will be 2.2% more expensive.The
secondnumberinthe sequence isthe error.
The resultsof our experimentsshowedwe have 6significantvariablesof the 16 in the
experiments.All of these variableswere verysignificantall beingbelowaP value of .05**. We
alreadycoveredTotal PropertyArea;Total Home Area,measuredbysquare footage hasa
coefficientof .0002. For everyextrasquare footof house, the house is.02% more expensive or
2% more expensiveforevery100 square feet.Bathroomshada coefficientof .076; for every
one bathroomthe propertyis7.6% more expensive.Total BasementAreahadacoefficientof
.00016; for every100 square feetof basement the propertyis.016% more expensive.Total
Garage Areahad a coefficientof .00019; for every100 square feetof basementthe propertyis
1.9% more expensive.Lastly,the onlycitythatmeasuredrelevantinourexperiment,Kittitas
had a coefficientof -.5.Meaningitis 50% lessexpensivetobuya single familyresidential home
inKittitas.
4. Comparative Market Analysis
Basedon the coefficientswe found,we estimatethata 3500 square foothouse on7
acres of land,with2 bathrooms,a200 square footbasement,anda 100 square footgarage

9
costs $208,355.28 in the townof Kittitas.Kittitaswaschosenbecauseitscoefficientwas -.5,
meaningthathousingis50% cheaperinKittitascomparedtothe othercitiesandtownsin
KittitasCounty.Mostof the Single familyhome salesinKittitasappearedtohave an average of
.08 acres anda maximumof 3 acres,witha mediansale price of around$117,000 overthe past
4 years.The mediansale price in2016 has alsoincreased,andisnow as highas $160,000. The
average 2016 acreage has notchangedeither,andstill hasan average of .08. The acreage is the
isthe secondmostsignificantfactor,withaP-value of lessthan.01 anda coefficientof 2.2%,
but the housesboughthada higheramountof bathrooms(the mostsignificantandeffective
factor).The other factorshad veryhighsignificances,butthe coefficientsseemedverylow,and
the amountof basementandgarage square footage didnotchange much in2016 in the home
sales,andneitherdidthe amountof homessold.Inotherwords,a house inKittitaswiththe
same amount,if not more bathroomsandgarage area, andmuch lessacreage costsabout
$160,000 in2016, and $117,000 in2012-2015. The equationismore accurate to the sudden
increase inhome sale pricesin2016, but issomewhat overpriced comparedtothe costsfrom
2012-2015. If one isto change the amount of acreage from 7 to a more relatable .18,the
answersequatesto$179,000, whichisstill relativelyhigh.
5. Conclusion
The data we collectedshowedanupwardtrendinthe real estate market;Figures1,2 and 3 all
were similarlytrendingupwards.Trendingupwardsintermsof;increasingexistinghome salesoverthe
past 4 years,a gradual increase inresidential buildingpermitsallottedand the medianprice of aKittitas
Countyhome hasalso beentrendingupward.Additionally,fromthe figures1,2 and 3 we can determine

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a seasonalitytrend.Inquarterswithnearnesstowinterbuildingpermitsdecrease andhome sales
decrease.Inquarterswithnearnesstosummerbuildingpermitsandhome salesbothincrease.
The regressionanalysisranonthe data alsoshowed6/16 variablesrelevantinasingle-family
residentialhome were significanttothe sale price of the house. Anotherdeductionfromthe analysis is
onlyone cityin KittitasCountyissignificanttothe sale price of the home,Kittitas.Kittitashada
significantcoefficientof -.5,inferringsingle-familyresidential homesare 50% lessexpensiveinKittitas.
Othersignificantfactorswere:total propertyarea,total house area,bathrooms,total basementarea
and total garage area.All these variableshadapositive coefficient,meaninganincrease inanyof these
variableswouldincrease apercentage of the value of the property.Thisstudyconcludedquantitative
value forvariablesrelevanttothe sale price of a home,a seasonalitytrendforhome salesand
residentialbuildingpermits,and anoverall increase inthe value andvolume inthe KittitasCounty
single-familyresidential real estate market.
6. References
K. (n.d.).Services.Retrieved January 25,2017, from
http://www.co.kittitas.wa.us/assessor/property.aspx
FacultyResearch.Universityof Washington.RetrievedJanuary25,2017, from
http://realestate.washington.edu/research/faculty-research/

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1. Appendix
A1
Year Quarter Existing Home Sales
2012 1 110
2012 2 170
2012 3 210
2012 4 200
2013 1 130
2013 2 230
2013 3 260
2013 4 220
2014 1 150
2014 2 240
2014 3 250
2014 4 230
2015 1 170
2015 2 290
2015 3 370
2015 4 260
2016 1 190
2016 2 290
2016 3 390
2016 4

12
A2
Year Month Residential
Building
Permits
12 1 3
12 2 1
12 3 9
12 4 10
12 5 17
12 6 14
12 7 17
12 8 14
12 9 15
12 10 15
12 11 9
12 12 8
13 1 6
13 2 5
13 3 20
13 4 8
13 5 19
13 6 36

13
13 7 33
13 8 17
13 9 15
13 10 25
13 11 11
13 12 11
14 1 8
14 2 4
14 3 7
14 4 19
14 5 20
14 6 24
14 7 22
14 8 25
14 9 30
14 10 15
14 11 18
14 12 8
15 1 25
15 2 10
15 3 22
15 4 19

14
15 5 18
15 6 22
15 7 17
15 8 24
15 9 34
15 10 33
15 11 15
15 12 16
16 1 4
16 2 11
16 3 23
16 4 19
16 5 19
16 6 30
16 7 14
16 8 30
16 9 20
16 10 19
16 11 18
16 12 8

15
A3
Year Housing
Inventory
2012 1242
2013 1323
2014 1364
2015 1520

Kittitas county real estate analysis

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