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Even the high-end homes get snatched up quickly
Seattle Times business reporter
When million-dollar homes, traditionally the slowest to sell, start flying out the door, it's a strong signal that the market is sizzling.
And that's exactly what happened in King County last month. Look at three homes in North Seattle, one of the area's hottest markets:
• A $2.5 million home drew two offers and sold in four days.
• A waterfront manse for just under $3 million quickly drew three offers.
• A home priced at $1.35 million was claimed in less than a week by a buyer who had the house inspected before making an offer — and then waived all contingencies, buying the house unconditionally. That's common in lower price ranges, but above a million?
"The upper end is crazy; it's wild," said Barbara Shikiar, a Windermere agent who handled one of the sales.
The million-dollar market heated up about a month ago, Shikiar says, and now "there are so many people waiting for the right thing.
"We haven't had any inventory, so when something comes on, and it's considered well-priced and has a fairly well-thought-out floor plan, it goes," she said. "Prices have ratcheted up, too."
That's basically the story for all home sales in King and parts of surrounding counties, says the April sales report released Friday by the Northwest Multiple Listing Service.
The report showed that scant inventory is taking a bite out of sales and helping pump up prices. In the central Puget Sound area — King, Snohomish and Pierce counties — prices have jumped 17 to 21 percent in the past year.
The median April sales price of King County's condominiums was $247,900. That's a 1 percent drop from the previous month, but compared with April 2005, condo prices are up 21 percent.
Local real-estate experts say the market is being driven by various economic factors.
First, mortgage-interest rates have climbed for six weeks straight and are now at their highest rate in four years — 6.67 percent for a 30-year fixed-rate loan, according to Bankrate.com.
"Higher interest rates and price appreciation continue to put pressure on affordability," said Chris Pauling, a Prudential Northwest Realty owner.
Buyers often react to this pressure by stepping up their efforts because they fear being priced out.
Pauling also cited the area's growing employment base.
"Ultimately, what drives the housing market more than anything is jobs, and we have a continued robust economy," he said. "We're poised for more job growth."
Also important is consumer confidence.
John Brian Losh, chairman and CEO of Ewing & Clark, a real-estate brokerage, considers it "the most important factor in luxury sales" and says wealthy buyers are "feeling good about the economy."
How good? A Windermere analysis revealed that 47 percent of all homes sold in west Bellevue this year cost at least $1 million. The same is true of 38 percent of Mercer Island's transactions.
The one significant negative for most buyers is rising gas prices. That's increasing the demand for homes near major job centers, which will continue to push prices up.
"I don't think there's a question in Seattle anymore about a bubble market," Pauling said. "We'll continue to have good, strong demand."
Elizabeth Rhodes: firstname.lastname@example.org
Copyright © 2006 The Seattle Times Company