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No relief for priced-out Seattleites. Home prices set new record

Posted by Joe Bell on June 12, 2017
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No escape for priced-out Seattleites: Home prices set record for an hour’s drive in every direction

Originally published June 6, 2017 at 12:53 pm Updated June 6, 2017 at 11:05 pm

For the first time since the 2007 housing bubble, every county in the central Puget Sound region has set a new median home price record, ranging from $300,000 in Kitsap and Pierce counties to $630,000 in King County.

By  Mike Rosenberg

Seattle Times business reporter

For the first time since before the recession, the entire central Puget Sound region — from Pierce to Snohomish and Kitsap counties — has set records for median home prices. And Seattle, which has been setting records every month, is on the verge of a once-unthinkable milestone: $1 million for the typical house across the entire area around Capitol Hill and northeast of downtown.

Monthly home-sales data released Tuesday show just how little escape there is for people priced out of the costly Seattle and Eastside markets. Pierce County’s median house cost topped $300,000 for the first time, while Kitsap County, which has similar home prices, surpassed its old bubble peak from 2007. And Snohomish County’s typical house is nearing half a million dollars.

Seattle’s new median price for a single-family house is $729,000, an extra $7,000 from a month ago and up 13.7 percent from a year earlier, according to the Northwest Multiple Listing Service.

Buyers are getting nailed at both ends of the price spectrum.

Seattle is about to get its first big million-dollar neighborhood: Median prices have reached $997,000 for the area centered on Capitol Hill and Madison Park, stretching from Interstate 5 to Lake Washington and from Interstate 90 to the 520 bridge. That’s up an extra $100,000 from a year ago.

The Queen Anne/Magnolia area isn’t far behind, at $900,000. (The data don’t drill down further; some smaller neighborhoods near the water likely surpassed the $1 million mark earlier.)

And in the cheapest part of town, in Southeast Seattle, prices soared an astounding 31 percent from a year ago. Even cheaper areas around the county, like Enumclaw and Des Moines, had similar increases.

At Windermere Real Estate in Belltown, managing broker Jed Kliman is bullish on the “super intense” market continuing.

“My personal and professional opinion is we are not in a bubble,” Kliman said. “Everybody is asking about that, it’s on everybody’s mind.” But he noted that Seattle is the fastest-growing city in the country for population, while the number of homes for sale is at historic lows — a sign of an underlying supply-and-demand imbalance. “I don’t see any of that changing. I do believe things will keep trending in the same direction.”

For the same reasons — along with continued job growth and low mortgage-interest rates — John L. Scott Real Estate said its brokers expect the frenzy to continue until at least summer 2018.

If you’re searching for a piece of somewhat good news for home seekers, the Eastside’s median price fell $5,000 from last month’s record, and now sits at $875,000. That’s still up 15.1 percent from a year ago.

The Seattle metro area has led the nation in home-price increases for the last seven months, according to the Case-Shiller index. And statewide, Washington home prices were up 12 percent year over year in April, easily the most of any state, and nearly twice the national average increase, according to a CoreLogic report also released Tuesday.

The added frustration is the seemingly never-ending drop in the number of homes for sale. That’s driven up competition — making Seattle the city with the most bidding wars in the country — forcing buyers to waive inspections and offer more cash upfront, and pushing the home-shopping experience into an endeavor that often takes six months to a year.

Homes for sale across King County dropped 20 percent from a year ago and were the lowest on record for any month of May dating back to at least 2000.

When the market was bottoming out in May 2011, there were 9,500 houses for sale in the county. Now there are about 2,100.

 

New listings increase

However, there are some encouraging numbers.

The number of new listings, year-over-year, increased for the first time in 2017. They still got snatched up so fast that the overall inventory dropped, but if more people continue to post homes for sale, it could help balance out the market, which is overwhelmingly tilted against buyers.

Single-family home prices were up 12.9 percent in King County and 15.4 percent in Snohomish County — big numbers, yet down a bit from the increases seen in April. Both counties set records in May for the median house sale: $632,250 in King and $450,000 in Snohomish.

King County home prices were up 45 percent from their old pre-recession high a decade ago and up 83 percent from the bottom of the recession.

In Pierce County, prices rose 12.4 percent from a year ago, the biggest rise of 2017. Pierce County’s median home cost reached a new all-time high of $309,000.

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Continuing a trend, the coolest market locally was Kitsap County, where prices increased 7.2 percent. Still, it was enough to push the county past its previous record, set in September 2007, for the first time — with a new median of $310,000.

The last time all four central Puget Sound counties set records for home prices was more than 10 years ago, before costs came crashing down.

Some brokers have sounded alarm bells about the market approaching bubble territory but most agree with Kliman, saying this is the new normal. The conditions from the last bubble, at least — like homes going to unqualified buyers — aren’t present this time around.

Even Thurston County is hotter than ever, posting a new high price of $287,450.

But not every neighborhood is getting hotter. The pricey markets of Queen Anne/Magnolia and West Bellevue both saw price drops from a year ago.

If you’re looking for a condo, you’re also out of luck. Those prices are up 22.2 percent from a year ago in Seattle, although down slightly from a month ago.

 

Mike Rosenberg: mrosenberg@seattletimes.com or 206-464-2266; on Twitter @ByRosenberg

 

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