Median price for single-family homes hits $500,000 in King County

The median price of King County single-family homes sold in June climbed to $500,000, up 10.3 percent from a year ago, according to figures released Monday by the Northwest Multiple Listing Service.

The frenzied market represents a new peak for King County home prices: The last peak of $481,000 was in July 2007, at the height of the nation’s housing bubble.

But real-estate experts say this market is different in a number of ways. Buyers now must leap over many more hurdles to qualify for a mortgage. Hiring at technology firms has expanded the region’s economic base. And a drought in listings that surfaced in 2013 has no end in sight.

“I wouldn’t say we’re in a bubble,” said Alan Pope, a real-estate appraiser in Redmond. “I would say the balloon is growing, and I can’t tell when it’s going to stop.”

Lennox Scott, CEO of John L. Scott Real Estate, said that over the long term, homes in the region appreciate 4 percent annually. Home prices lost so much ground during the past recession that the market today is just slightly above where it should be by that measure, he said.

Local buyers now have to compete with people moving here for new jobs, foreign buyers and millennials looking for their first home, Scott said. More are leaping into the market to lock in interest rates before they rise, he said.

Buyers are fighting for fewer available homes. In June, the number of single-family and condominium listings in King County was 23 percent lower than a year ago, the MLS reported.

The shortage, Scott said, stems from “virtually no new condominiums, virtually no new single-family lots near the job centers, people moving on average every 10 years instead of every six years, and sellers hesitating until they find their replacement home.”

King County had less than a month’s supply of single-family homes and condominiums for sale from March to May, according to a Seattle Times analysis of MLS data. In June, the supply — a ratio of active listings to pending sales — rose slightly to 0.98, but remains far below the historical average of about three months’ supply.

“Those are just mind-boggling figures,” said Lawrence Yun, chief economist for the National Association of Realtors. The trade group considers a five- to seven-month supply a balanced housing market, one that favors neither buyers nor sellers.

Snohomish and Pierce counties also are seeing their lowest supply of listings in more than a decade.

In Snohomish County, the median price of single-family homes sold was $360,125, about 6 percent higher than a year ago; in Pierce, it was $257,000, about 9.4 percent higher.

Condo prices are getting a lift from the shortage in listings, although prices aren’t necessarily climbing as quickly as for single-family homes.

June’s median condo price in King County was $287,000, 7 percent higher than a year ago; Snohomish, $239,950, up about 12 percent; and in Pierce, $162,500, down about 7 percent.

The shortage of listings won’t be solved quickly. New homes must be built, but the Seattle area has limited land available.

“It’s all about providing that empty new home so some people release their existing home into the market,” Yun said. “Even in distant suburbs, if they were to build more, some people might be attracted by bargain prices out in the suburbs.”

The National Association of Home Builders reports permits were issued for 3,481 new single-family homes in the three-county area from January to May, down 4 percent from a year ago.

(Permits for multifamily construction were much higher: 7,977 units, up 68 percent from a year ago. The vast majority of those are apartments.)

“It’s getting harder and harder for our builders to find adequate plats on which to build,” said Allison Butcher, a spokeswoman for the Master Builders Association of King and Snohomish Counties.

Even with so much pressure on the housing market, the colliding forces can sometimes produce startling results.

Brokers are still shocked that a home in Seattle’s Montlake neighborhood that listed for $880,000 in March sold for $1.6 million in April.

Windermere real-estate broker Diane Charouhas said she never expected the bidding war to get so heated for the 2,940-square-foot house on an eighth of an acre at 22nd Avenue East in Montlake.

The one-story house was designed by nationally recognized local architect Arnold Gangnes and built in 1957.

The home “did appeal to the masses from the standpoint of it being in a prime location,” Charouhas said. But its unique architectural pedigree and design also attracted a narrow slice of buyers who appreciate art. “It just had awesome feng shui,” she said.

The home had previously sold in 1995 for $400,000 and hadn’t been dramatically altered from its original state. It went on the market March 17 and was under contract nine days later — after the seller received 14 offers, with most of them at $1 million or higher, said Charouhas.

The tie between two final bidders was broken in a final round that drove the price to $1.6 million. The winner paid cash

Pope, an appraiser, cautions that the Montlake home is an outlier.

“It doesn’t tell you what the market is doing,” he said. “It tells you what can happen in the market.”