Home prices dip again in King County
The area’s housing market hit a lull in February, with the second consecutive monthly slide in home sales and median prices. Blame the Super Bowl. Or the Winter Olympics. Or Mercury retrograde.
Seattle Times business reporter
The area’s housing market hit a lull in February, with the second consecutive monthly slide in home sales and median prices.
Blame the Super Bowl. Or the Winter Olympics. Or Mercury retrograde.
Housing-market pundits searched for clues Wednesday in new data from the Northwest Multiple Listing Service to explain why the median price of single-family homes sold in King County in February fell to $405,400 from $410,000 in January amid little growth in the number of homes for sale.
The number of pending sales — mutually accepted offers that haven’t closed yet — also was down, about 13 percent from the same month a year ago.
“The Seahawks’ run to the Super Bowl affected sales,” suggested J. Lennox Scott, chairman of John L. Scott Real Estate, in a statement put out by the MLS. Since the championship game, he said, more homes have been listed and sold.
An even bigger factor was the continued tight inventory of homes for sale, said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies. King and Snohomish counties had less than a four-month supply of homes for sale, making it a seller’s market.
The median price of single-family homes sold in King County last month was 11 percent higher than in February 2013, according to the MLS. That’s compared with a 17 percent year-over-year increase in January.
Buyers and sellers are reacting to the shortage differently.
“Buyers don’t want to be in a situation where they’re significantly overpaying for housing the way they did during the bubble,” Crellin said. “Unless they can get exactly the home they’re looking for, they’re not willing to bid up the prices indiscriminately.”
Sellers, on the other hand, are delighting in the shortage of homes for sale and even delaying plans to list their properties, dazzled by last year’s 14 percent annual appreciation in median home price in King County, brokers say.
“It gives people that false sense that the market is going to continue to do this, so ‘I’ll hold onto my property and I’m not going to sell it,’ ” said Richard Eastern, co-owner of Washington Property Solutions.
Some would-be sellers are waiting because they’re underwater: One in five homes with a mortgage in the Seattle metro area had an outstanding loan balance greater than the value of the home at the end of 2013, reports Seattle-based Zillow, the online real-estate marketplace.
And nearly 40 percent of Seattle-area homeowners with mortgages are effectively stuck, Zillow says, because they have less than 20 percent equity in their home, making it difficult to afford the down payment on their next home.
Changes in inventory, interest rates and buyer confidence will drive home sales this year, said George Moorhead, branch manager at Bentley Properties in Bothell.
Another reason the inventory remains as tight as it is, he said, is that during the economic downturn, hedge funds and real-estate investment trusts bought up homes that otherwise might have gone to first-time homebuyers and have decided to hold onto them.
“We’re not going to see that inventory come back right away,” he said.
While King County saw a dip in the median home price over the month, median prices in Snohomish and Pierce counties gained ground.
The median was $315,000 in Snohomish County, up from $295,000 in January. In Pierce County, the median was $222,000, compared with $219,000 in the prior month.
Over the year, Snohomish County’s median price gained 11.5 percent; Pierce County’s median rose 11 percent.
While inventory varies dramatically across the region, all areas of King County saw solid price growth in February compared with a year earlier. In Seattle, the median price was $460,000, nearly 10 percent higher than a year ago; on the Eastside, the median was about $587,000, up 11 percent.
In Southwest King County, which had the lowest median price of any area in the county, it was $240,000, a 9 percent gain.
Desirable houses listed in popular neighborhoods will still see bidding wars, brokers say.
“It’s still painful,” Moorhead said. “We still have our hot markets where people are buying homes at silly, silly prices they shouldn’t be paying, but the lack of quality inventory out there has some people doing foolish things.”
Sanjay Bhatt: 206-464-3103 or email@example.com On Twitter @sbhatt