Saturday, February 05, 2005

Housing supply shrinks; buyers scramble

By Elizabeth Rhodes
Seattle Times staff reporter

January's warm weather may have been a blow to local ski areas, but to John Hama, it was a blessing.

"As long as the weather is good, there are buyers at open houses," said Hama, the owner of two Home Realty offices in North Seattle.

Indeed, January's unusually fine weather brought out the buyers — so much so that last month's accepted offers were up 21 percent on single-family homes in the 15-county Western Washington area, compared with January 2004, according to monthly statistics released yesterday by the Northwest Multiple Listing Service. Accepted offers on condominiums rose 28 percent from a year ago.

"We're having a great first of the year here," Hama said, mentioning that even in January some houses were receiving multiple offers.

Denny Bullock, branch manager of Prudential Northwest's Renton office, described the latter part of last month as "just explosive." There is a lot of energy in the market because the economy is good and interest rates continue to stay below 6 percent.

"The only problem we have is a lack of homes for sale," Bullock said.

Compared with a year earlier, the number of properties for sale in King, Snohomish, Pierce and Kitsap counties fell 19 percent.

The situation was particularly acute in King County, where the 5,299 single-family homes for sale were down 22 percent from the previous January. Some 1,678 King County condos were available, down about 33 percent from last year.

Not only are first-time and move-up buyers vying for them, but "there's a large share of investors out there," Hama said. "It seems like they're taking money from someplace and looking to invest, either in single family or multifamily."

This fast market means buyers must be ready to act quickly, and they are, Bullock says. They're almost always preapproved for a home loan, and some even have an inspection done on a property before they make an offer.

"A preapproved, psychologically ready-to-buy buyer will buy a house within 27 days of when they indicate to a Realtor they're ready to start looking," Bullock said.

Prices continue to climb because demand is high for the smaller number of properties. Last month, the median price of a King County single-family home was up 12.6 percent compared with the previous January.

King County condominiums appreciated 7 percent, to a median $198,000. (Median means half the properties sold for more, half for less. These numbers reflect sales — not asking — prices.)

The most expensive area within Central Puget Sound continues to be on the Eastside, where the median was $377,075. But that wasn't the most expensive within the 15 counties that report to the Northwest Multiple Listing Service.

That distinction belongs to San Juan County, where the January median was $445,000. One reason for that high number: the amount of waterfront on desirable San Juan, Lopez, Orcas and Shaw islands. Waterfront homes are more expensive.