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Originally published October 5, 2010 at 10:26 AM | Page modified October 6, 2010 at 5:50 PM

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Miserable month for area home sales

King County home sales fell in September for the third straight month. Buyers closed on 1,158 houses last month, a 28 percent drop from...

Seattle Times business reporter

Interactive | National home sales trends

King County home sales fell in September for the third straight month.

Buyers closed on 1,158 houses last month, a 28 percent drop from the same month last year, according to statistics released Tuesday by the Northwest Multiple Listing Service.

It was the worst September in at least five years, and the biggest monthly year-over-year decline since April 2009.

Prices, however, remained stable. The median price of houses that sold last month was $379,950, down less than 1 percent from September 2009.

Sales volumes began dropping after federal tax credits enacted in early 2009 expired earlier this year. The credits spurred a 13-month run of year-over-year increases that ended about when they did, in July.

That's no surprise, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

"The tax-credit program accelerated sales activity in the first half of the year, and it borrowed from sales that otherwise would have happened in the second half," he said.

Mike Gain, CEO and managing broker of Prudential Northwest Realty Associates, agreed. "We all knew we were robbing from the future," he said. "We're just all hoping we've hit bottom."

But he said his firm opened a new office Tuesday in Lynnwood — its seventh — "and I wouldn't be doing that if I weren't optimistic about the future."

Historically low interest rates and prices that have dropped nearly 25 percent from their peak in July 2007 should help, Gain said.

House sales in King County fell 12 percent last month from August's total, after month-to-month declines of 11 and 22 percent the previous two months.

That stands in contrast to the rest of the country, where sales have begun to bounce back, said Stan Humphries, chief economist with Seattle-based Zillow.com, the online real-estate marketplace and database.

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"That's definitely a worrisome sign," he said.

But the Northwest entered the real-estate downturn later than the rest of the U.S., Humphries said, and may come out of it later.

King County neighborhoods that experienced the steepest drops in September sales from the same month last year included Northeast Seattle (50 percent), South Renton-Benson Hill (55 percent) and Beacon Hill (58 percent).

The Eastside's decline was a relatively modest 18 percent. The median sale price there increased 3.5 percent, while in North King County it rose 3 percent.

King County condo sales were down 22 percent from last September. The median price fell 2 percent, to $240,000.

In Snohomish County, single-family home sales slipped 14 percent year over year. The median sale price, $272,320, was down nearly 8 percent.

Both Gain and Crellin said they don't foresee any big surge in sales for the rest of year.

Lots of people are showing up at his firm's open houses, Gain said, "but they're just very hesitant because there's no sense of urgency."

While sales for the entire year still are running ahead of 2009's pace, they could fall behind by December, Crellin said.

The listing service's median-price figures reflect only houses that sold last month.

Zillow's Home Value Index for King County, which attempts to capture changes in the value of all houses, sold and unsold, was $346,900 in August, the most recent month for which information is available, down 7 percent year-over-year.

The stability in median prices that shows up in the listing service's report is probably because fewer lower-priced houses are selling since the tax credits expired, skewing the median, Humphries said. Prices should drop over the next few months, he said.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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