After six months of steady increases, the median price of single-family homes in King County dropped in August to $437,000, a decrease of 6.6 percent from the previous month, but a 1.6 percent increase from a year ago.
And, fewer homes changed hands. Almost 7 percent fewer homes sold in August than during the same month a year ago, even though the supply of homes for sale was up 1.4 percent to 4,967 active listings, according to figures published Thursday by the Northwest Multiple Listing Service.
“What we are seeing now with the market is a moderate growth in appreciation, a normalizing of sales volume, and continued health overall,” George Moorhead, an MLS director and owner of Bentley Properties in Bothell, said in a statement: “It is not a call for alarm … just a balancing and adjusting of a healthy market.”
In July, the median price for single-family homes in Seattle blew away the 2007 peak, but in August it dropped 8 percent, to $499,950. However, the Seattle market led the county’s submarkets in appreciation over the year, increasing 9.4 percent.
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The Eastside had the highest median price at $605,000, a 5.2 percent increase from a year ago, but a drop of 3.2 percent from the previous month.
Southwest King County had the lowest median price at $265,000, which is 6 percent higher than a year ago, but down 1.9 percent from July.
J. Lennox Scott, CEO of John L. Scott Real Estate, said even though prices dropped around King County this month, the market is still hot. “We’re just talking about a few degrees lower of hotness,” he said.
Inventory in King County was up slightly from July, and has been increasing for the last year, but the county still only has a two-month supply — with the hottest markets around the job centers of Seattle and Bellevue even lower, Scott said. (A four- to six-month supply is considered a balanced market, according to the MLS.)
Scott said he anticipates the shortage of inventory will continue through the spring of 2015, and he expects prices to continue to appreciate, but at a slower pace than what has been seen this summer.
Tim Ellis, who writes the real-estate blog Seattlebubble.com, said the inventory problem is not new.
“It has been the same story for two or three years now,” he said. “With sales dropping off, you’d think that inventory would go up a little bit more, but it just isn’t,” he said.
Seattle-based real-estate brokerage Redfin released a report Thursday showing the inventory problem is worse in the middle of the market where most people want to buy. The number of Seattle-area homes for sale in the middle price range (below $449,900) fell by 33.4 percent since 2011. Meanwhile, Seattle-area homes listed above that grew by 4.9 percent, according to the report.
Redfin chief economist Nela Richardson said there are a variety of reasons why sellers have been slow to list their homes:
• They may not have enough equity because they bought during the peak and prices have not rebounded enough.
• Home prices have increased while income has remained stagnant.
• A lack of inventory, including not enough new homes being built.
• They have an interest rate around 3 percent and don’t want to move and take on a higher interest rate.
“People may hate their house, but love their mortgage,” Richardson said.
Snohomish, Pierce and Kitsap counties all have under a four-month supply of inventory on the market.
In Snohomish County, the median price increased 6.5 percent over the year to $330,000, while dropping 1.5 percent from July. The county has a 2.8-month supply of inventory.
Kitsap County median decreased in August to $245,000, a drop of 4.3 percent from last year, and a 3.9 percent drop from July.
Pierce County, on the other hand, saw the median price increase to $239,950, a 2.5 percent increase from July and a 4.3 percent increase from August of last year.