Tax credit brings house buyers out in October in King, Snohomish counties
The federal tax credit for first-time homebuyers pushed sales in the Seattle area to new highs for the year in October.
Seattle Times business reporter
Give credit to the credit.
Home sales in the Seattle area reached new highs for the year in October, a burst real-estate professionals attributed in large part to the $8,000 federal tax credit for first-time buyers.
In King County, closed sales of single-family homes were up 33 percent from last October, the Northwest Multiple Listing Service said in a report released Thursday.
In Snohomish County the bump was even more dramatic: 42 percent.
Even condos finally came to the party. Closed sales in King County last month were up 18 percent, the first year-over-year increase since July 2007.
But at least some buyers were rushing to meet a deadline: The credit was due to expire Nov. 30. Congress this week approved legislation that extends it by seven months.
Will that turn down the heat for the next few months?
"It could be the catalyst that kills the buzz, because people have more time," said Dean Jones, president of the condo-marketing firm Realogics in Seattle.
Or it could push sales to new heights, he added: The bill establishes a new, $6,500 credit for many buyers who aren't first-timers. "It's too early to tell."
While more houses were sold in King County in October than in any month since August 2007, prices continued to slip. The median price of a single-family home that closed last month was $377,500, down from $392,000 in October 2008.
But the year-over-year decline — 3.7 percent — was the smallest in a year.
The median price of King County condos was down 8.7 percent, to $251,000. The median house price in Snohomish County slid 12.2 percent, to $292,725.
October marked the fifth straight month of year-over-year increases in house sales in King County.
A breakdown of the numbers reveals some surprises.
• Sales were up a whopping 54 percent on the Eastside — the county's most expensive area — and nearly 40 percent in Seattle.
• Sales declined in Auburn, Federal Way, Des Moines, Burien and SeaTac — all among the county's most affordable cities, places to which you'd think many first-time buyers would gravitate.
"I wish I had an answer for that," said Barry Crittenden, broker in Windermere Real Estate's Burien office. "I've been puzzling over that myself."
Perhaps, he said, lower prices and the first-time buyers' tax credit are allowing budget-conscious buyers to consider neighborhoods that are "a little more upscale."
On the Eastside, the tax credit has helped spur sales in neighborhoods south of Interstate 90, said Thadine Bak, broker in Windermere's Bellevue South office.
It also has created what she called "trickle-up" buyers: Homeowners looking for new, often more expensive homes once they sell their houses to first-timers. There has been a burst of interest recently in houses in South Bellevue in the $600,000-$700,000 price range, Bak said.
Eastside sales increased partly because sellers are getting more realistic in pricing their homes, said Mona Spencer, broker in John L. Scott's Redmond office: "They're finally getting it."
But the impact of the federal tax credit can't be understated, she added: "It gives [buyers] an incentive to go out and look."
Same goes for condos, said Jones, of the condo-marketing firm: "It's what's getting them off the fence."
The median condo sale price in Seattle actually was up 4.4 percent in October from the same month last year, hitting an even $300,000. The biggest increases came on Queen Anne and Capitol Hill.
But Jones and Ben Kakimoto, a condo specialist for John L. Scott, said sales in some new condo buildings aren't included in the listing-service statistics because developers market units directly.
If sales in those buildings had been included, Kakimoto said, the median October condo sales price would have been even higher.
Eric Pryne: 206-464-2231 or email@example.com