Double digit rise in King County home prices
It was the third straight month of year-over-year price increases for King County, and by far the largest.
Seattle Times business reporter
King County house prices saw a double-digit increase in June — the first time that's happened in nearly five years, according to statistics released Thursday by the Northwest Multiple Listing Service.
The median price of single-family homes sold last month was $380,000, up 10.1 percent from June 2011.
It was the third straight month of year-over-year price increases, and by far the largest change. The last time the median rose by more than 10 percent was in July 2007, when it hit an all-time high of $481,000.
After that peak, the countywide median fell nearly 36 percent, dropping to a post-housing-crisis low of $308,125 this February. With this spring's rebound, the decline from 2007's high now is 21 percent.
June's jump was broad-based. Twenty-three of 29 King County areas tracked by the broker-owned listing service had year-over-year gains, 13 of them double-digit. Low-priced Auburn, midpriced Shoreline and higher-priced Redmond all experienced increases of 20 percent or more.
While not as dramatic, the median sale price also was up from a year ago in Snohomish, Pierce and Kitsap counties.
Condo prices rose more than 5 percent in King County, nearly 10 percent in Seattle and more than 23 percent in downtown Seattle.
"The numbers are even more positive than I had anticipated they would be," said Glenn Crellin, associate director for research at the University of Washington's Runstad Center for Real Estate Studies.
"We just had our best month since October 2007," said Mike Gain, CEO and managing broker of Prudential Northwest Realty Associates, which operates a half-dozen offices in and around Seattle.
"I'm almost afraid to say anything for fear of jinxing it."
What's behind the turnaround? Analysts pointed to several factors.
For one, the mix of homes that are selling has shifted. In February bank-owned houses — usually lower priced — accounted for nearly 23 percent of all single-family sales in King County, according to online brokerage Redfin.
Last month? Less than 10 percent.
"You take out what has been a large part of the low end of the market, and of course the median price is going to go up," said blogger Tim Ellis of Seattlebubble.com.
But he doesn't expect a flood of repossessed houses will hit the market and push prices down anytime soon. Fewer houses have been entering the foreclosure pipeline, he said, so it's not surprising the number exiting would also decline.
Crellin said he expected the "shadow inventory" of foreclosed houses would have had a bigger impact on home prices by now.
"It just isn't becoming as big a problem as I expected it would be," he said.
Another reason for rising prices: lack of inventory. The number of houses listed for sale in King County inched up 1 percent between May and June, but was down nearly 38 percent from a year ago.
Condos are in even shorter supply, down 53 percent from June 2011.
Less inventory means prospective buyers, drawn into the market by low interest rates or rising rents, are competing for fewer homes.
Why aren't there more sellers? Some longtime homeowners still are waiting for prices to return to 2006 or 2007 levels, said Gain, "and that's just not going to happen."
Many others bought near the peak and are so far "underwater" on their mortgages, they can't afford to sell.
Brokers suggested some owners may be reluctant to list their homes because they fear the lack of inventory means they won't find suitable replacements. Others said low interest rates may have persuaded some owners to refinance and stay put.
Sales volumes were strong in June. Buyers closed on 2,117 houses in King County, the listing service said — 3 percent more than in May, which had been the best month since August 2007.
When compared with June 2011, house sales were up 12 percent, condo sales up 16 percent. Snohomish County house sales were up more than 19 percent.
June traditionally is a top month for home sales. More houses have sold in King County in June than in any other month in six of the past eight years.
Gain, Crellin and Ellis all said they expect sales should remain strong, and prices should keep rising, for the next few months.
"It seems like the driving factor is, the Seattle economy's really picking up," Ellis said.
Eric Pryne: 206-464-2231 or firstname.lastname@example.org