Seattle-area home prices slide a little but gain over last year
Home prices in the Seattle area deteriorated in October for the second month in a row but posted solid annual gains, according to the S&P/Case-Shiller 20-city index released Tuesday.
Seattle Times business reporter
Home prices in the Seattle area deteriorated in October for the second month in a row, but they were solidly up for the year, according to the S&P/Case-Shiller 20-city index released Tuesday.
The average price of existing single-family homes sold in King, Snohomish and Pierce counties was down 0.1 percent over September, when prices declined 0.2 percent over August.
October’s prices were up 6.2 percent over the year, the first time in eight months that annual price gains accelerated.
Nationally, the 20-city composite index was also down 0.1 percent over the month but gained 4.5 percent over the year.
“After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Ten metros saw average home prices decline over the month, while eight metros posted gains.
Over the year, every metro recorded increases in home prices. Miami led the field with a 9.5 percent annual gain, followed by San Francisco (9.1 percent) and Las Vegas (8 percent). Cleveland posted the weakest annual gain, at 0.9 percent.
Nationally, average home prices are back to fall 2004 levels but still about 16 percent off their 2006 peak. Seattle-area home prices are still about 11 percent off their peak, which came in summer 2007.
“Housing definitely came back to Earth over the second half of 2014, and we welcome and expect to see more of the same as we look ahead at 2015,” said Stan Humphries, chief economist for Seattle-based Zillow. “As we prepare for New Year’s and the next home-shopping season, we expect soaring rents to entice more people to the relative stability of homeownership, particularly younger potential buyers.”
Humphries predicted growing demand “should be met by more inventory as more sellers look to realize recent gains in equity and more builders turn their attention to entry-level home construction.”
But the nationwide gains in average prices mask a problem for homeowners in lower-price tiers, say economists at IHS Global Insight, a Boston area research firm.
“Homes in high-price tiers are closer to having recouped their losses from the crisis than homes in lower-price tiers, whose values suffered more when the housing bubble popped,” said economists Patrick Newport and Stephanie Karol in a statement. “Since affordability is a major concern facing the housing recovery, this could create an obstacle for existing-home sales going forward.”
In the Seattle metro area, the average home price in the low tier is still almost 20 percent below the last peak in 2007.
Home prices in the middle tier are 13 percent off their peak, while those in the upper tier are 9 percent away from their peak, according to S&P/Dow Jones Indices.