Home prices -- and competition -- strong

After losing one Seattle house in a bidding war, Rachel Schulenburg spent part of Thursday touring a three-bedroom brick Tudor in Magnolia, which is listed for $615,000.

Schulenburg, 32, arrived from Chicago on Oct. 1 after her husband had landed a job with a Seattle insurance company. "We're definitely excited," she said after visiting the house. "But the multiple-offer thing is frustrating. It's something we're not used to."


		Paul Joseph Brown / P-I
	Rachel Schulenburg, left, talks Thursday with Shannon Campbell of Lake & Co. real estate about this house in Magnolia, which lists for $615,000. The Schulenburgs have already lost one bidding match.

But new residents such as Schulenburg, and younger adults remaining and buying in the Seattle region, kept the real estate market strong in September, as the median sales price of a single-family house in King County grew to $381,250, the Northwest Multiple Listing Service reported Thursday.

That was up more than 15 percent from September 2004. The median sales price is the point at which half of all transactions are above it and half are below.

In pending sales last month, the number of condominiums in King County increased 11 percent from September 2004. But pending sales of single-family homes grew by just 5 percent from the same month last year, the service said.

Real estate analysts say the lower prices for condominiums have attracted buyers.

The MLS, which represents brokers in Western and Central Washington, said the median sales price of a King County condominium jumped to $229,950, up 12 percent from $205,000 in September 2004.

"I don't think we'll see a leveling off," said Ken Bacon, a broker with Windermere Real Estate in Redmond.

Bacon said he believes that payouts from a class-action lawsuit to former temporary employees at Microsoft Corp., which will average more than $8,400 per person, and a contract ratification bonus to Boeing Co. Machinists, which averages $5,200 per person, could help keep sales brisk for the coming months.

"Any time people get discretionary dollars, especially with the hype of real estate, they start looking at home ownership," he said.

Last week, a federal judge in Seattle approved the payouts this month to more than 8,500 people who worked in long-term temporary jobs at Microsoft. They did not receive benefits given to regular employees.

The suit was settled five years ago, and Microsoft paid the money into an escrow account, but a series of procedural complications delayed the payouts from being made until now.

The Machinists ended their strike, which was largely over their pension and health care costs, in late September. The agreement includes that bonus. The Puget Sound area is home to about 16,500 Boeing Machinists.

Bacon added that a limited housing supply, the expectation that interest rates will inch up in the near term and attractive financing packages will help keep sales going.

He has noticed that younger adults, many of whom are in their early 20s, are staying in the Seattle area and buying real estate.

September also marked a month in which families were back from summer vacations and wanted to close real estate deals before the school year started, said Randy Bannecker, a housing specialist with the Seattle-King County Association of Realtors.

Lake & Co. real estate agent Shannon Campbell said many of her clients are coming from outside the area, from places such as Illinois, Oregon and California. Many are willing to pay more than $380,000 for homes.

Some, she added, can afford homes up to $750,000. "That's who I've been dealing with lately," she said. "The good houses are going quickly, but the prices have increased."

But one loan officer with Bellevue-based Absolute Mortgage Corp. questioned why King County had 5,105 new listings last month for single-family homes and condominiums.

In comparison, he said, there were only 3,767 pending sales. In previous months, that gap has been smaller.

"To me, that would indicate a higher supply of listings than pending sales," said Jeff Merkeley. "I think it bears watching. If it continues, it could indicate a slowing market. You have to look beyond the sales prices."

Matt Rivett, a 32-year-old Edmonds resident, wants to move to Seattle so he can be closer to friends and his engineering job at Boeing.

"But all this news about skyrocketing real estate is just discouraging," he said.

His plan: Wait until interest rates go up, the market cools a bit, and prices favor buyers. He admits that his salary gives him that breathing room.

But Schulenburg, her husband and their infant son lack that luxury. And on Thursday, that brick Tudor house made a good impression on her.

"It has possibilities," she said. "I'm bringing my husband back to look at it."

P-I reporter Todd Bishop contributed to this report. P-I reporter Brad Wong can be reached at 206-448-8137 or bradwong@seattlepi.com.

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