The median price of single-family homes sold in King County last month hit a new high of $514,975, up about 20 percent over the median price a year ago, the Northwest Multiple Listing Service said Monday. Some submarkets, like Seattle, rose even more. Check the interactive map for details on prices and more.
The median price of single-family homes sold in King County hit a new all-time high last month — $514,975 — amid record-low inventory, heralding even more intense bidding wars ahead in the typically busy spring home-buying season.
Ominously, the more affordable Snohomish and Pierce counties also face a historically low inventory level, according to a Seattle Times analysis of data from the Northwest Multiple Listing Service.
One widely-watched gauge of supply — the ratio of active listings to pending sales — hit its lowest level since at least 2003 in all three counties in February, according to the Times’ analysis. King and Snohomish counties each had less than a month’s supply, while Pierce had just over a month’s supply.
The historic shortage of homes for sale, combined with a recent drop in interest rates, has caused the dramatic run-up in prices, experts say. In February, King County had 1,923 homes listed for sale, the MLS reported, but a greater number of pending sales that hadn’t yet closed: 2,299.
“We cannot continue to sell more homes than we list,” said Matthew Gardner, chief economist at Windermere Real Estate. “When are we going to start seeing some listings? That scares me more than anything else.”
Single-family home prices in the city of Seattle jumped 24 percent over the year to a median $644,950. Despite an older housing stock, Seattle is ground-zero for the region’s job growth.
Expedia and Weyerhaeuser are moving their suburban headquarters to Seattle. Amazon.com recently opened its new high-rise campus in South Lake Union. And Silicon Valley titans like Facebook and Apple have established satellite offices here.
Not surprisingly, areas close to the city center and to the water saw the biggest jump in median family incomes from 2010 to 2014, according to a recent report from Redfin, the Seattle-based brokerage.
That’s helped home prices in Seattle outpace King County in price gains: King County’s median is 7 percent above its 2007 peak, while Seattle’s median is up 29 percent, based on MLS data.
Median prices in parts of Seattle popped even more: Central Seattle and Beacon Hill both saw prices climb over the year nearly 40 percent, while North Seattle’s median soared 42 percent.
The current run-up in prices isn’t like the 2006-2007 bubble, Gardner said, because buyers have more skin in the game and lenders are vetting borrowers more closely. Still, Gardner expects price gains to slow down eventually.
“We’re in for another crazy spring real estate market,” said J. Lennox Scott, chairman and CEO of the John L. Scott brokerage, in a statement. “It’s like déjà vu all over again. We’ve seen this pattern for the last three years, but the lack of inventory is taking its toll on homebuyers.”
In Magnolia, a buyer recently passed on a house that was listed for about $560,000 because there were nine offers already on a house in poor condition, said Trevor Smith, managing broker of Locality Real Estate. The house eventually sold for about $630,000.
Smith’s buyer instead made the sole offer on a similar house nearby in much better condition listed for $650,000 that had been on the market for a while; the buyer closed last week on the house for $630,000.
“The big lesson there is under-priced homes are a worse deal than over-priced homes right now because the auction atmosphere drives prices up more than they should be driven up,” Smith said. “Find homes that have been on the market awhile and you’ll get a better deal.”
The Eastside remains the most expensive submarket: Its median price, $739,975, was about 20 percent higher than a year ago. Southwest King County and North King County also saw median prices rise roughly 20 percent to $320,500 and $497,500, respectively.
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The submarket with the smallest increase was Southeast King County, where the median price rose 14.5 percent to $355,000.
Surrounding counties saw more modest increases in the median price of single-family homes sold: In Snohomish County, the median rose about 9 percent over the year to $359,000; in Pierce, $250,000, up 7.3 percent; and in Kitsap, $255,000, up 6.7 percent.
Meanwhile, the demand also rippled through the condominium market, where the inventory of units for sale is even tighter than the single-family market.
“If their alternative is renting and they’re accustomed to vertical living anyway,” said Windermere managing broker Michael Doyle, prospective buyers ask themselves, “Do I want to pay someone else’s mortgage or my mortgage?”
The median price of King County condos sold in February was $323,975, up 26 percent over the year; in downtown Seattle, the median price was $597,500, up 11 percent.
Condo prices dipped slightly outside King County: The median condo price in Snohomish was $236,000, down 2 percent; in Pierce, $207,000, down 4 percent; and in Kitsap, $119,800, down 15 percent.