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Originally published September 11, 2007 at 12:00 AM | Page modified September 11, 2007 at 2:08 AM

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Median price for house in Seattle tops $500,000

A worker would have to earn about $119,000 a year to afford that Seattle home, according to the Seattle chapter of the Urban Land Institute.

Seattle Times business reporter

The median price for a single-family home in Seattle topped the half-million-dollar mark for the first time last month, the latest sales figures show.

That price, $501,000, was up 10.1 percent from last year's $455,000, the Northwest Multiple Listing Service reported Monday. (Median means half the houses sold for more, half sold for less.)

The report is unwelcome news to those already priced out of the local housing market.

A worker would have to earn $57 an hour — about $119,000 a year — to afford that Seattle home, according to the Seattle chapter of the Urban Land Institute.

And on the Eastside, a worker needs to earn nearly $152,000 a year to afford a house with the $643,750 median price there in August.

"The median prices ... really make owning a home a distant dream for workers in our community," said Kelly Mann, executive director for the Urban Land Institute.

The four-county Puget Sound area experienced a 5 percent increase in sales prices from last year, which looks puny after 2-½ years of double-digit appreciation in the region.

But nationally, housing prices fell 3.2 percent between April and June.

A look at prices around the region:

In King County , a single-family home sold for a median price of $477,345 in August, 9.7 percent higher than in August 2006. The median condo price rose 5.8 percent to $285,000.

In Pierce County, the median price for a single-family home rose 6 percent, to $291,500, from last year. The median condo price was $219,900, up 7.3 percent.

In Kitsap County, the median price for a single-family home was $299,500, up 5 percent from a year earlier. Kitsap saw a sizable increase in condo prices, with the median at $340,000, up 61.5 percent from August 2006.

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But the county's condo market is relatively small; about 65 condos were sold last month, up from 38 last year.

In Snohomish County, the median price for a single-family home rose 4.5 percent to $375,000. The median condo price of $242,639 was up 12.9 percent.

Seattle increase

Seattle's median home-sales price, including both condos and houses, was $439,000, up 8.4 percent from a year ago.

John Mitchell, an economist based in Portland, said Seattle's higher incomes, strong employment growth and terrible commutes were pushing prices higher than in his city, where the median home price is $300,000.

Within Seattle, the close-in neighborhoods of Laurelhurst, Ravenna, Capitol Hill and Madison Park all showed price increases, said Pat Grimm, president of Windermere Services in Western Washington.

The number of homes on the market continued to climb, partly because it is getting harder for some prospective buyers to borrow money.

The subprime-mortgage industry continues to disintegrate, and lenders are increasing scrutiny of potential buyers' income and tightening requirements for people with less-than-stellar credit.

"The challenges that we're seeing in the subprime market have made it more difficult for entry-level buyers," said Erik Hand, president of Response Mortgage Services, the in-house mortgage lender of John L. Scott Real Estate.

Condominium sales are on a flat line, said Jake Jacobsen, managing broker of the Windermere Real Estate office in downtown Seattle.

"Sales are occurring, but closing is taking longer than usual," he said. "Our lenders are being somewhat more cautious."

Jacobsen said buyers should look for reliable lenders backed by banks, while sellers should ensure their homes are priced properly.

"This is not the time to put a price on a property and see if it's going to work," Jacobsen said.

Sellers trying to jump in while prices are still high have pushed up the number of homes for sale, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

That means buyers have an edge.

"We do have buyers looking for bargains," Crellin said. "They have an opportunity to do more negotiating."

Foreclosures

The Mortgage Bankers Association last week reported that nationally the number of mortgage holders starting the foreclosure process in the second quarter reached 0.65 percent, marking the third consecutive record high.

And the delinquency rate, which tracks homeowners falling behind in their payments, rose to 5.12 percent of all loans. That number is up nearly three-fourths of a percentage point from a year ago.

The national rates reflect the loss of manufacturing jobs in the Midwest and the collapse of the overheated housing markets in California, Florida, Nevada and Arizona.

In Washington state, the delinquency rate rose to 2.62 percent, and the percentage of mortgages that entered the foreclosure pipeline fell slightly to 0.27 percent.

Despite rising inventory, tightening credit standards and appreciation that has slowed, the Pacific Northwest housing market is still doing well compared with the rest of the nation.

"But that doesn't mean you're immune from the basic forces," Mitchell said.

Bibeka Shrestha: 206-515-5632 or bshrestha@seattletimes.com

Copyright © 2007 The Seattle Times Company

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