King County median home price up 15 percent over year ago
Summer-selling season hot throughout Puget Sound region.
Seattle Times business reporter
A bump in interest rates in July didn’t derail the strongest home-buying stretch in the Seattle area since 2007, as the median price climbed year-over-year for the 16th consecutive month.
The median price of single-family homes sold in King County last month jumped to $434,000, up 15 percent from a year ago and up 1.5 percent from June, according to figures from the Northwest Multiple Listing Service. And the number of pending home sales -- offers that have been accepted, but haven’t yet closed -- remained above 3,000, the busiest July since 2005.
“We typically expect a dip in sales during the summer months, and we haven’t seen that much of a downturn this summer,” said John Deely, the principal managing broker at Coldwell Banker Bain in Seattle.
The summer surge in activity took place despite -- or perhaps because of -- an increase in mortgage interest rates the week of July 11.
After mortgage rates rose, “we saw an increase in open-house traffic,” Deely said, possibly because would-be buyers feared higher rates.
In Snohomish County, the median home price was $304,000, almost 12 percent higher than a year ago, and in Pierce County it was $195,000, a 16 percent jump.
Home prices have climbed higher -- some say artificially -- in part because of a tight supply. At the current sales pace, King and Snohomish counties both have less than a two-month supply of homes listed for sale. Experts say a healthy market should have at least a five-month supply.
The silver lining: Last month’s number of listings in King County was the highest level so far this year.
Experts said rising prices drew more sellers into the market in July than expected, including banks with repossessed properties and owners once underwater on their mortgages, a welcome sign for a tight market.
“We’re looking at a stabilizing marketplace,” said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies.
How long the run-up in home prices continues remains an open question.
While King County home prices are still about 10 percent off the market’s July 2007 peak, they are back at mid-2008 levels.
The run-up may be partly due to a decline in sales of foreclosed homes.
Bank-owned homes made up just 9 percent of King County sales so far this year, compared to 14 percent last year and 23 percent in 2011, said Richard Eastern, co-owner of Bellevue-based Washington Property Solutions, which helps owners short sell their homes. He said he believes banks are selling repossessed homes to large investors like hedge funds without listing them.
Meanwhile, short sales account for about 13 percent of this year’s King County home sales and should continue for at least the next year, Eastern said. Bank of America, Wells Fargo and other banks are approving more short sales to avoid the expense of foreclosure, he said.
Eastern said the market’s tight inventory is pushing up prices.
“I think the slowdown in inventory has artificially boosted values,” he said. “When more inventory comes on the market, and it will eventually, you’ll see values come down.”
Within King County, the 12-monthclimb in median price ranged from a 21.2 percent hike in Southwest King -- still the cheapest, at $248,500 -- to an 8.9 percent rise on the Eastside, which is the most expensive area, at $566,258.
Cash buyers continue to play a huge factor in home sales: According to San Diego-based DataQuick, 22.8 percent of June’s sales in the Greater Seattle area occurred without any mortgage financing, almost twice the historical monthly average and down only slightly from the previous June.
Sanjay Bhatt: 206-464-3103 or firstname.lastname@example.org On Twitter @sbhatt