Prices dive as "distressed" home sales rise in King County
The median price of houses sold in King County last month was $321,700, nearly 11 percent less than in November 2010. Brokers and analysts agree the drop largely was driven by increasing sales of "distressed properties."
Seattle Times business reporter
Home-sale prices saw another double-digit drop in November, according to statistics released Monday by the Northwest Multiple Listing Service.
The median price of houses sold in King County last month was $321,700, nearly 11 percent less than in November 2010 and only a hair more than October's post-boom low of $320,000.
The median King County condo price fell even more steeply, from $225,000 in November 2010 to $191,250 last month — a 15 percent decline.
Brokers and analysts agree the drops largely were driven by increasing sales of "distressed properties" — bank-repossessed homes and "short sales" for less than sellers owe lenders.
Those properties make up a larger share of total sales now than a year ago. And the prices they fetch have fallen much more steeply than those of other homes, according to an analysis of listing-service data prepared for Washington Property Solutions, a short-sale negotiating firm:
• Bank-owned houses accounted for 20 percent of all King County sales in November, up from 14 percent a year earlier. Those houses sold for a median price of $177,000, down 18 percent from $216,000 in November 2010.
• The median price of short-sales houses dropped 17 percent, from $305,000 to $260,000.
• But other, "nondistressed" sales saw a much smaller price decline — 2.5 percent, from $399,000 to $389,000.
A geographic breakdown underlines how distressed properties have driven down countywide numbers. Southwest and Southeast King County, areas with large numbers of short sales and sales of repossessed homes, had the biggest year-over-year increases in sales volumes.
They also saw the steepest price declines.
Banks are selling foreclosed homes at steeper discounts now to get them off their books as more homes enter the foreclosure pipeline, said Richard Eastern, chief executive of Washington Property Solutions.
That, in turn, is forcing many short-sellers to accept less, he said: "They're driving down everything."
While prices fell, the number of sales was up significantly in November. Buyers closed on 41 percent more houses and 70 percent more condos in King County last month than in the same month in 2010.
Distressed properties accounted for about half the single-family increase, according to Washington Property Solutions' analysis.
Sales volumes were depressed in fall 2010 because federal tax credits for homebuyers that were part of the Obama stimulus package had expired months earlier.
Still, Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said last month's increase was bigger than he anticipated.
Better-than-usual November weather may have been a factor, he said.
More houses sold in King County last month than in October, the first time that's happened since at least 2003.
Sales also were up year-over-year in Snohomish County — 36 percent for houses, 73 percent for condos. The median single-family price slipped 6 percent, to $244,000.
While sales jumped, the number of houses for sale in King County was down more than 25 percent in November from a year earlier, according to the listing service. Snohomish County had a similar drop.
Rising demand — sales — coupled with reduced supply — inventory — ordinarily is a recipe for higher prices, OB Jacobi, president of Windermere Real Estate, told an industry gathering last week.
Not this time. Distressed properties are keeping prices down, Jacobi said, and they are unlikely to increase much soon.
"The worry is, what do the banks have in their shadow inventory" of homes in foreclosure that haven't been put back on the market for resale, he added.
More foreclosures are on the horizon.
The number of Washington homes whose owners were delinquent on their mortgage payments has increased in the past year, according to the Mortgage Bankers Association.
And, at their current pace, it could take banks nearly four years to work through the current statewide inventory of properties whose owners are at least 90 days delinquent on their mortgages, Crellin added.
"Getting properties through the pipeline is agonizingly slow," he said.
Eric Pryne: 206-464-2231