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Local homes: Investments that just keep getting hotter
Seattle Times staff reporter
Forget your home being your castle. Thanks to surging local home prices, your home is now your portfolio.
After giving thanks that you bit the bullet and bought, consider this:
The median prices of King County's detached homes and condominiums have climbed 16 percent since the first of this year — despite a growing number of homes listed for sale — leaving both the S&P 500 and the Nasdaq in the dust.
The S&P has grown a paltry 0.1 percent since January, while the Nasdaq has declined 3 percent.
Price gains in nearby counties, where sales are overwhelmingly single-family houses, also have been double-digit impressive.
Snohomish County's detached-home prices are up 17.8 percent since Jan. 1, while Pierce County's prices have increased 16.6 percent, and Kitsap's 14 percent, newly released numbers from the Northwest Multiple Listing Service reveal.
That puts Puget Sound-area sellers firmly in control — a situation that's increasingly more memory than reality for sellers in other parts of the country, where the housing market is cooling.
Because the Puget Sound area's economy is strong, we're adding buyers who can absorb higher interest rates, said O.B. Jacobi, owner and broker of Windermere Real Estate's Wedgwood office. Rates have climbed from an average 5.62 percent a year ago to 6.79 percent this week for 30-year fixed-rate loans, according to mortgage-money provider Freddie Mac.
"You would think with the interest rate climbing that people's buying power would have gone down a little bit, but we still haven't seen it," Jacobi said. "There are still tons of buyers in the market, more than sellers, and we're still seeing open houses with 50-60 people going through them. Well-priced, cute homes are selling quickly with multiple offers."
"Literally two years ago in Ballard, I looked at a small, single-family house and remember thinking, 'Oh my God, it's $250,000,' " said Paige, a single mother and culinary administrator for the cruise-ship company Holland America Line. "What I wouldn't do for that house now."
House prices in the Ballard neighborhood where she rents and wants to stay have doubled in the past two years, Paige says, leaving almost nothing around the $265,000 she can spend. One house she did find was about 800 square feet and cinderblock construction.
"I'm not willing to pay a $1,700 mortgage for that," she said.
Sales also continue to be brisk in what most buyers would consider the more-expensive price ranges.
Take one two-bedroom house on Mercer Island. It drew 13 offers, said D'Ann Jackson, the broker in John L. Scott's Mercer Island office, and sold recently for substantially more than its asking price of almost $800,000.
However, that may not be surprising considering Mercer Island's median single-family home price. It was $998,250 last month — making it the county's second-most-expensive area.
Others in the top five are West Bellevue (median of $1.187 million), Queen Anne/Magnolia ($699,950), South Bellevue ($635,500) and Redmond/Carnation ($599,950).
The one bit of good news for buyers is an increasing number of homes for sale — an annual cycle that kicks in about this time each summer and continues into the fall.
Here's a look at the last month's listings by county:
• King County reported 6,489 single-family homes for sale. That's an increase of 951 from June 2005 and 462 from May.
• Snohomish County had 3,483 detached homes on the market last month, up from 2,747 a year earlier and 3,255 in May.
• In Pierce County, 5,098 single-family homes were available last month, up 1,634 from last June and 381 from May.
Compared with a year earlier, condominium availability last month showed double-digit increases in King, Pierce and Kitsap counties. In Snohomish County, however, it decreased — from 380 in June 2005 to 373 last month.
Elizabeth Rhodes: firstname.lastname@example.org
Copyright © 2006 The Seattle Times Company