Fuel for speculation of a housing bubble — but not proof of one — increased yesterday on a report that strong buyer demand has...

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Fuel for speculation of a housing bubble — but not proof of one — increased yesterday on a report that strong buyer demand has pushed Central Puget Sound prices up 10 percent or more over last spring’s already high numbers.

The median price of a single-family home sold last month in King County was $355,000, up 13 percent from April 2004, according to statistics released by the Northwest Multiple Listing Service (MLS). Median means half the homes sold for more; half sold for less.

Snohomish County hit $279,640, up about 12.5 percent.

A bubble occurs when prices climb beyond buyers’ ability to pay. When it bursts, prices fall back. However, even with a scorching market by local standards, Steve Smiley doesn’t see a bubble here.

“Seattle has been a decent market, but not a great market, and you still have room for prices to move up,” said Smiley, a principal at Hanley Wood Market Intelligence, a housing-market research firm headquartered in California.

According to the MLS, King County homes (single-family and condominiums) appreciated 10 percent last year, slightly behind Snohomish’s 11 percent and ahead of Pierce’s 6 percent. But those numbers were modest compared with other metropolitan areas.

San Diego home prices shot up 37 percent last year. Las Vegas’ soared 52 percent, and Miami reported a 26 percent, according to the National Association of Realtors. Those markets could see price corrections, some experts surmise.

“Nine or 10 percent appreciation is certainly more sustainable than 25 percent, so in your market, I don’t think there’s a bubble,” Smiley said.

Coldwell Banker Bain broker Dick Fulton concurs.

The 1990s “mini bubble” was the last time the Seattle area saw anything close to a real downturn, Fulton said. That was precipitated by a 41 percent increase in housing values from the fourth quarter of 1989 through the first quarter of 1990. That’s an 82 percent annual increase.

“That kind of extreme increase in prices necessitated a correction,” Fulton said.

That’s why home values in half of King County’s 86 neighborhoods dropped in 1991. Most saw less than a 5 percent decline and then started up again next year and have been strong ever since.

Fulton and others say several factors are fueling our market with numerous buyers who can afford the median price of a house in Shoreline, for example. In that North King County area, the median home price was $300,500 last month, up 8.3 percent over April 2004.

Among the factors that have increased housing demand:

• Mortgage rates are low.

• Job growth is increasing.

• Wages are relatively high.

• Newcomers who can afford to buy homes are moving here from other states.

Feverish sales activity was reported last month, with 10 of the 15 Washington counties in the MLS posting double-digit gains in the number of homes sold. That’s compared with last year.

King County, however, was not among them because it had 30 percent fewer homes on the market than it did a year ago, MLS figures show. That factor alone is guaranteed to keep the county’s home prices up.

Elizabeth Rhodes: erhodes@seattletimes.com