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Area's home prices idling as buyers take more time
Seattle Times business reporter
The Puget Sound area's housing market is still stronger than most in the country, but signs of slowing are clear.
For the third month in a row, median home prices were nearly flat — up just 0.5 percent in August compared with July in King County, 1.5 percent in Snohomish County and 0.2 percent in Pierce County, according to data from the Northwest Multiple Listing Service.
Kitsap County prices slipped 0.2 percent, said the MLS, which tracks home sales in 17 counties in Western and Central Washington.
Median prices for homes and condos combined were still above their levels of August 2005 — up 12 percent in King County, 12.8 percent in Pierce County and 14.2 percent in Snohomish County — but the rate of increase has slowed compared with earlier this year.
The slowdown is coming after a record 2005. Total sales activity in the four-county region this year is still predicted to be the second-best on record, said J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate.
"We're off a frenzied market to a strong market," he said.
But the decelerating pace mirrors the national trend. The National Association of Realtors last week cut its 2006 forecast for existing home sales to 6.54 million — the third-best year on record, but 7.6 percent below 2005.
And the Office of Federal Housing Enterprise Oversight last week said home prices nationally rose 1.17 percent in the second quarter compared with the first quarter, the lowest appreciation rate since the fourth quarter of 1999.
Condos, which have become starter homes for many buyers, continued making inroads in the local market.
The median sale price for condos in King County last month was $269,500, up 1.7 percent from July and 18 percent from August 2005.
The inventory of homes and condos for sale continued to rise throughout King, Snohomish, Pierce and Kitsap counties, as it has since the beginning of the year. Area brokers said there were still shortages in high-demand neighborhoods close to downtown Seattle, Bellevue and other employment centers.
With more choices, buyers aren't rushing to plunk down earnest money as they were last year, said Mike Skahen, owner and broker of Lake & Co. in North Seattle.
The prospect of higher mortgage payments also has made them choosier, he said.
Until recently, mortgage rates were running about 1 percentage point above their levels a year earlier; they've dropped about a half-point in the past month or so. That additional point, Skahen said, equates to about a 10 percent increase in the buyer's cost — on top of actual price appreciation.
"Effectively, a buyer this year is buying a house at about 25 percent more than they would have last year," he said. "At some point they have to take a little bit of a rest. Even though we have a lot of buyers out there, they're running out of money."
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org
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