Tuesday, December 07, 2004

Home prices set county record

by Clayton Park
Journal Business Editor, King County Journal

The median price of single-family homes and condominiums sold in King County soared to a record high $305,000 in November, while sales have already surpassed the totals of 2003.

It is the first time that the countywide median price has exceeded the $300,000 mark, according to the Northwest Multiple Listing Service, which reported its home sales numbers for November on Monday.

Through the first 11 months of this year, 36,893 homes and condos were sold in King County, compared with 36,566 sold in all of 2003.

On the Eastside, the median price of homes and condos sold last month rose to $380,000, up from $369,000 in October and $341,095 in November 2003.

In southeast King County, the median price of homes and condos sold last month rose to $257,000, up from $254,225 in October and $230,000 in November 2003.

In Seattle, the median price of homes and condos sold last month rose to $335,500, up from $325,750 in October and $310,000 in November 2003.

The median price means that an equal number of properties sold for more than that amount and an equal number sold for less.

The Kirkland-based Northwest Multiple Listing Service tracks home sales throughout Western Washington on a monthly basis.

The average number of days that homes and condos sold last month on the Eastside were on the market was 52 days, down from 69 in November 2003.

The average number of days that homes and condos sold last month in southeast King County were on the market was 47 days, down from 63 a year ago.

Homes and condos sold last month in Seattle were on the market an average of 39 days, down from 47 a year ago.

The countywide average number of days it took for homes and condos to be sold last month was 49 days, down from 61 a year ago.

November's numbers continue the trend of steadily rising home prices in this region that began several years ago and is showing no signs of letting up, at least in the coming year.

``2005 should continue to be a good year in real estate,'' said Jack Johnson, CEO of the Northwest Multiple Listing Service, who attributes the rising prices to a combination of shrinking inventory, continued strong demand for properties among prospective first-time home buyers, move-up buyers and people moving into the area, as well as still relatively low mortgage interest rates.

Johnson said 2005 won't necessarily be a record-setting year in terms of number of properties sold, ``but it's likely to be maybe the second-best year. ... There's still a lot of demand.''

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, offered a similar prediction.

Crellin, who at a forecasting symposium last month warned that the housing boom may have peaked, told the Journal on Monday that he expected the overall median price to continue to rise, but was ``surprised that it rose as sharply as it did'' in November.

``Prior to (Monday), I was thinking we would see a cooling of the housing market sooner than I do now, although it doesn't change my overall view for 2005,'' Crellin said.

Crellin said he expects prices to continue to steadily climb, particularly among homes in the low and moderate price ranges. While interest rates are expected to rise, the Federal Reserve has already indicated its intentions to raise them at a slow but steady pace -- not enough to significantly cool off the housing market in the coming year in this area.

As high as home prices have gotten in this area, they still pale in comparison to California, where the median price of homes and condos are $500,000 or even higher in the San Francisco Bay area and in Southern California, Crellin said.

In fact, the December issue of Smart Money magazine ``cited every single urban market in Washington (state) as fairly valued, in terms of being consistent with the underlying economics and overall supply and demand,'' Crellin said.

Crellin, who has been tracking the residential housing market in this state for the past 11 years, said ``Right now, the market is as hot as I've ever seen it.''

When asked for his advice to prospective home buyers, Crellin said, ``Make sure they're making their decision based on where they want to live'' as opposed to simply picking a home for its potential investment value.

``If you buy a house you don't like for the purposes of seeing it appreciate rapidly, those are the people who are likely to be burned if there is a modest cyclical downturn,'' Crellin said. ``There will be one at some point. I just don't know when.''

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