House prices in King County rose last month to their highest level since December 2010, according to statistics released Thursday by the Northwest Multiple Listing Service.
By Sanjay Bhatt - Seattle Times staff reporter
May 4th, 2012
More homebuyers chased slim pickings in King County last month, sending house prices to their highest level since December 2010.
The median price of single-family homes sold last month was $360,000, up 9 percent from March and nearly 3 percent from April 2011, according to statistics released Thursday by the Northwest Multiple Listing Service. It was the second month-over-month gain in median price.
There were 1,769 houses sold in King County last month, 15 percent more than a year earlier.
"We're at the beginning of the prime selling season, so to see this sort of strength coming out ... this is very good news for the industry," said Glenn Crellin, associate director of research at the University of Washington's Runstad Center for Real Estate Studies.
Rock-bottom mortgage rates and improving employment have set the stage for a stronger spring homebuying season than a year ago, but what's on every broker's lips is inventory.
Inventory — the number of houses listed for sale — slid for the ninth month in a row, down 38 percent from a year ago. In April 2010, there were almost twice as many listings.
"The very tight inventory of homes available for sale coupled with the stabilizing prices are probably going to convince some sellers that it's now safe to come back into the marketplace," Crellin said.
That doesn't necessarily mean prices will grow rapidly.
There's still a large "shadow" inventory of homes in foreclosure and repossessed by banks that have yet to come on the market.
Banks appear to have slowed sales of these homes in April, real-estate blogger Tim Ellis noted on Seattlebubble.com.
Bank-owned homes represented less than 16 percent of sales of King County house sales in April, compared with 20 percent a year ago.
Because these homes tend to be cheaper, having fewer of them in the sales mix pushes up the overall median price, he said.
Another factor in the picture: Low apartment-vacancy rates are giving landlords the ability to raise rents, which in turn may be pushing some toward buying a home.
Earlier this week, new U.S. Census data showed only 4.6 percent of all homes and apartments for rent in the Seattle metro area were vacant in the first three months of the year — the lowest level in more than three years.
"The job market is improving, the rental market is definitely getting tighter, and a lot of people like myself who sat out the real-estate bubble, they've been waiting to get to a range they feel is comfortable," Ellis said.
"This year is a year where they've flipped that switch to buying."
Sellers in Seattle are seeing higher median prices, while sellers in Southwest King County continue to see prices fall.
Houses in Seattle sold for a median $425,000, up 10.4 percent from April 2011, while the number of transactions rose nearly 8 percent.
In Southwest King County, the median price was $189,500, down 12 percent from a year ago.
Snohomish County, which has an even tighter inventory than King County, saw a bigger jump in prices: The median reached $255,502, up nearly 10 percent from a year ago.
The gain was based on 741 homes sold, up 25 percent from April 2011.
It's the inventory that buyers and sellers will be watching.
Areas with a small inventory of foreclosed properties will see prices keep rising, says Crellin of UW's Runstad Center.
Brokers are cautiously optimistic they'll see more sales this year.
Historically low mortgage rates may allow more people to borrow. Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan fell to 3.84 percent, cracking the previous all-time low set in February.
"We have had more multiple-offer situations in the first four months of the year than we probably had all last year," said real-estate broker Keoki McCarthy, owner of Real Living Northwest Realtors in Bothell.
But as big banks ramp up foreclosures they had put on hold, McCarthy acknowledged, more distressed homes could come on the market and keep prices from escalating.
Meanwhile, soaring rents could moderate as new apartments come onto the market later this year and next year.
"Over the next three to five years, we'll see prices increase on par with the rate of inflation, 3 to 5 percent annually," predicts Ellis.
"That's a lot stronger of a showing than what we've had ... where prices have been falling, falling, falling."
