Home prices in the Seattle metro area jumped 1.2 percent in December from the previous month, one of the strongest gains in the nation, according to the S&P/Case-Shiller 20-city index released Tuesday.
Home prices in the Seattle-metro area jumped in December, posting one of the strongest gains in the nation, according to the S&P/Case-Shiller 20-city index released Tuesday.
The average price of existing single-family homes sold in King, Snohomish and Pierce counties was up 1.2 percent from November after seasonal fluctuations are taken into account. That was more than double November’s gain of 0.5 percent over the previous month.
Over the year, the average Seattle-area home price in December was 6.6 percent higher, according to S&P Dow Jones Indices, publisher of the index. The flurry of single-family-home sales made it the busiest December in King County since 2005, as the Seattle market strengthened amid a weak national housing recovery.
Nationally, prices gained 0.9 percent over the month in December, slightly higher than the 0.8 percent gain seen in November. The 20-city index posted a 4.5 percent annual gain.
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All of the cities in the index recorded gains over the month on a seasonally adjusted basis and over the year, officials said. Denver posted a 1.4 percent increase, the strongest among the 20 metros, followed by 1.2 percent in Detroit, San Francisco and Seattle. The San Diego market showed the weakest monthly gain, 0.4 percent.
Index officials worried about the weak level of new-home construction and sales.
“The housing recovery is faltering,” David Blitzer, chairman of the index committee at S&P Dow Jones, said in a statement. “Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession.”
“The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence,” he added.
Average home prices for the Seattle metro area were back to their spring 2006 levels, and at their fall 2004 levels for the 20-city index.
Seattle-area prices are still 11.7 percent below their July 2007 peak. That’s better than the 20-city index, which remains 16 percent below the peak set more than eight years ago.
For the month of December, Seattle-based real-estate-data provider Zillow’s home-value index showed more moderate gains of 0.7 percent over the month and 5.7 percent over the year.
While Case-Shiller’s index is derived from analyzing repeat sales of a subset of homes and includes foreclosure resales, Zillow’s index includes the entire housing stock and doesn’t include resales of foreclosed homes.
The median value — half are above, half are below — in December of all single-family homes in the tri-county Seattle area was $355,300, Zillow reported, still affordable as long as mortgage rates remain historically low.
But the housing market hasn’t returned to normal, said Zillow Chief Economist Stan Humphries.
“Anyone looking to see how far from truly ‘normal’ the market remains need look no further than the red-hot rental market,” Humphries said in a statement Tuesday.
“Widespread and rapid growth in rents, combined with stagnant wages, are keeping many would-be buyers stuck in rental housing, writing ever-larger checks to their landlords instead of saving for a down payment.
“Today’s renters are tomorrow’s buyers, and the longer these would-be buyers stay on the sidelines, the longer full recovery will take.”