Back to 2005 for King County real-estate prices
Median price may look familiar, but the ripple effect of only half the sales of five years ago goes far and wide.
Seattle Times business reporter
Home salesby the numbers
Median price for a single-family home
Median for condos
Year's cheapest home sale
State excise-tax revenue
on home sales in 2007
State's diminished take last year
Northwest Multiple Listing Service
Buyers spent a total of $8.9 billion on houses and condos in King County in 2010, according to a year-end report released this week by the Northwest Multiple Listing Service.
That may sound like a lot. It's not.
Five years earlier, according to the service, residential real-estate sales in the county totaled $17.1 billion — 90 percent more.
Prices weren't that different. The median price of houses that sold was $375,000 last year, compared with $374,000 in 2005.
But fewer homes sold in 2010 — lots fewer.
Buyers purchased nearly 42,000 houses and condos in 2005.
Last year? Fewer than 21,000 — and it was actually the best year since 2007.
The drop in real-estate sales over the past few years has sent ripples into many corners of the economy, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.
"You have a significant amount of economic activity that just isn't taking place," he said.
Real-estate agents, who on average get 6 percent sales commissions, have less money to spend on groceries, gasoline and everything else. And there are fewer of them: the listing service says the number of agents in its network has dropped 11 percent since 2005.
But that's just the tip of the iceberg, Crellin said. Businesses have failed because fewer homes are selling. Government tax collections have dropped.
"You don't have homeowners preparing their houses for sale, doing all the spruce-up work," he said. Studies show they spend, on average, about 1 percent of the sale price getting their homes ready.
And, because fewer people are moving, they aren't hiring movers or renting trucks or spending money to furnish or redecorate their new homes. On average, those expenditures usually amount to another 2 percent of the price of the home, Crellin said.
Three events usually trigger furniture purchases, said Sue Bowden, accountant at Josh Underhill's Family Furniture in Lynnwood: divorce, kids leaving home — and buying a new house.
"The furniture market rises and falls with the real-estate market," she said. "When people stopped buying houses, they stopped buying furniture."
While last year was a little better, Bowden said, 2008 and 2009 were the worst years for furniture sales in two decades. The real-estate downturn contributed to to the closure of four Underhill stores in 2009, she added.
It also has contributed to state, county and city budget woes. In King County, a 1.78 percent excise tax is collected on almost all real-estate sales. Of that, 0.5 percent goes to local governments, the rest to the state.
In 2005, according to the state Department of Revenue, the state collected $823 million from its share of the tax, 6 percent of its total tax revenue. That rose to $1.16 billion in 2007.
Last year? The excise tax raised $412 million, the smallest total since the 1990s.
"It's still a significant source of revenue," said department spokesman Mike Gowrylow, "but it's half what it was five years ago."
Most of the state portion of the real-estate excise tax goes to the general fund. And most of that goes to schools and social services.
Other highlights from the listing service's year-end report:
• Nearly 80 percent of the homes that sold in King County last year were houses or town houses, while 20 percent were condos.
• The $375,000 median price for a single-family home was down 1.3 percent from 2009 — the smallest drop in three years. In Snohomish County, the median sale price, $275,000, was down 8 percent year-over-year.
• The median sale price for King County condos was $244,000, down $10,000 from the previous year.
• The least expensive house sold last year was an "as is" manufactured home in the Lake Washington School District. It fetched $3,000. The most expensive: a 7,400-square-foot waterfront estate in Hunts Point that sold for $11.28 million.
• A total of 824 King County houses sold for more than $1 million in 2010. Of that number, 147 were on the Eastside's "Gold Coast" — West Bellevue, Medina, Clyde Hill, Hunts Point, Yarrow Point — and 124 were in Capitol Hill, Madison Park and other central Seattle neighborhoods.
• The median price of a three-bedroom King County house built in 2009 or 2010 was $350,000, 3 percent more than the median price of older houses with three bedrooms. In Snohomish County, the new-construction premium was larger, more than 8 percent.
• While sellers accepted offers on 23,223 King County houses, only 16,640 sales closed — a difference of 28 percent.
The gap was much smaller before the downturn. Real-estate professionals attribute it to slow-to-close short sales. They also say more buyers are making offers contingent on inspection, then backing out.
Eric Pryne: 206-464-2231 or firstname.lastname@example.org