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Originally published Monday, February 6, 2012 at 1:10 PM

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King County home prices drop again; median at $315,000

House prices in King County hit another new post-boom low in January, according to statistics released Monday by the Northwest Multiple Listing Service.

Seattle Times business reporter

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House prices in King County hit another new post-boom low in January, according to statistics released Monday by the Northwest Multiple Listing Service.

The median price of single-family homes that sold last month was $315,000. The previous low, $320,000, was last year in both October and December.

January's median price was down 12 percent from January 2011's $356,000.

King County's median condo price fell even more steeply, to $175,000, down 25 percent year-over-year.

But King County is a big place, and the real-estate market isn't the same in SeaTac as it is in Sammamish.

A closer look at the statistics reveals significant variations from neighborhood to neighborhood.

As in the past few months, they suggest an increase in "distressed-property" sales — bank-repossessed homes and "short sales" for less than sellers owe lenders — is responsible for much of the countywide price drop.

Those sales accounted for about 40 percent of all closings in King and Snohomish counties last month, according to an analysis by Re/Max Northwest Realtors.

Sales are up most, and prices have fallen farthest, in areas with large numbers of distressed sales.

"We're clearly seeing some bottom-feeding and bargain-hunting going on," said Glenn Crellin, associate director of research at the Runstad Center for Real Estate Studies at the University of Washington.

But in some pricier neighborhoods, "you're starting to see something approaching stability," he added.

Take the county's two extremes: low-priced Southwest King County — Burien, SeaTac, Des Moines, Federal Way — where distressed-property sales are most prevalent, and the affluent Eastside, where they are relatively rare.

The median sale price for houses in Southwest King County has fallen 27 percent over the past two years. The Eastside, in contrast, has seen only a 4 percent drop.

Prices also have remained relatively stable over the past two years in close-in Seattle neighborhoods such as Queen Anne, Magnolia, Capitol Hill and Madison Park.

"A sellers' market has returned in the areas close to the job centers," Lennox Scott, CEO and chairman of John L. Scott Real Estate, said in a statement.

Countywide, however, distressed-property transactions "continue to drag down the entire market," said OB Jacobi, Windermere real-estate president.

That won't change anytime soon, Crellin said: "There's still a tremendous backlog."

Homeowners are at least 90 days past due on 76,000 mortgages statewide, he said, but only about 5,000 homes are completing the foreclosure process each quarter.

At that rate, it would take nearly four years to work through the backlog, Crellin said, although he expects the pace of foreclosures will pick up.

While prices were down in January, sales volumes were up. King County buyers closed on 8 percent more houses and 38 percent more condos than in January 2011, according to the listing service.

Southwest and Southeast King County saw the biggest increases.

In Snohomish County, closed single-family home sales were up 11 percent year-over-year. The median price, $230,000, was down 9 percent from the same month last year.

Inventory — the number of houses listed for sale — continued its long slide last month, dropping 28 percent in King County and 30 percent in Snohomish County from January 2011's levels.

The number of houses on the market in King County also was down from December, the first time that's happened since at least 2000, real-estate blogger Tim Ellis wrote on Seattlebubble.com. Inventory usually increases about 10 percent between those months, he wrote.

One likely reason for the drop: Many homeowners, underwater on their mortgages, can't or won't sell.

"It seems that with prices continuing to fall, more and more potential sellers are 'priced in forever,'" Ellis wrote.

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

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