Seattle home prices slip from last year

It has happened here -- sort of.

The median price of homes in Seattle dropped last month from a year earlier for the first time since at least 2002, according to statistics released Friday by the Northwest Multiple Listing Service.

It's just a $50 dip -- 0.01 percent -- to $399,950, but the numbers here finally follow the trend of the national real estate market, which has been slowing for months.

One month of lower prices doesn't mean much, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

"I think it is suggestive that there is some real softness in the (Seattle) market," he said. "But at the same time, I think we've got a more resilient housing market than in many parts of the country."

Of course, there are caveats: There is an increasing number of condominiums and townhouses in Seattle, which sell for less than traditional houses. Listing service numbers don't include most new condos, which generally sell for more than existing ones.

But the numbers reveal declining appreciation, many more homes for sale and fewer buyers, and they raise questions about what the future might bring. September's median price was down 8.9 percent from August. There were 50 percent more homes on the market in September and 17 percent fewer sales than a year earlier. Pending sales, which can be a better indicator of recent activity, decreased 21 percent.

Matthew Gardner, a Seattle land-use economist who works with developers, does not put much weight on the Seattle median-home price, particularly because it excludes most sales of new condos, he said Friday.

Actually, year-to-year increases of about 4 percent in the median price across King County and the 19 counties in the listing service were higher than Gardner anticipated, he said. He expects a leveling off -- with increases of roughly 3 percent -- for a couple of years.

"We need to get through this backlog of inventory," he said. "Also, we need to start allowing time for wages to catch up."

Geoff Pfander put his Wedgwood house on the market in mid-September.

"I'm trying to have faith in Seattle," he said at an open house last weekend. "I think (buyers) just have more choices now so they get to look around more."

To stand out in a market with more and more homes for fewer and fewer buyers, home sellers are reducing list prices, offering special financing and entering potential buyers into drawings for a bottle of champagne if they'll say what they think of a house.

Teri Daligney held open houses last Friday, Saturday and Sunday at a West Seattle home she and a partner remodeled and put on the market at the end of July.

"I live three hours away, and I want to stop driving," she said, noting that they had only just finished renovations.

"We get tons of people coming in and looking, but nobody who's serious," Daligney said. "I just think they're scared."

Real estate professionals said some potential buyers are jittery, while some sellers have unrealistic expectations for prices.

		Dan DeLong / P-I
	A sign encourages potential buyers outside a house for sale Friday along 24th Avenue East in the Montlake neighborhood.

"I think the media has kind of scared them," said Kari Scott, an agent with John L. Scott Real Estate, referring to stories about the slowing market, particularly nationally.

Scott also noted that tightening credit standards have made it harder for people to get mortgage loans. She hosted an open house Friday at a West Seattle home whose price she has cut by about $100,000 since listing it for $899,000 in June.

Seattle's strong economy has been holding up the city's housing market, "but that pole of the tent is getting a little shorter," said Michael Simonsen, chief executive of Altos Research in Mountain View, Calif.

Seattle prices will probably be flat to slightly lower for several years, but not fall dramatically, he said.

Patrick Klimczyk, who moved to Seattle from the Skagit Valley six weeks ago, said he worries that he might buy just before prices start dropping, or that prices could continue to climb out of his reach if he waits.

"It's a crapshoot," he said.

Klimczyk said he put in offers below asking price on two homes in the past month.

"The owners would not accept my offers or meet me halfway," he said, adding that they subsequently lowered their prices, by which time he had lost interest.

In a statement accompanying the numbers, real estate professionals said that while buyers have lots of selection, the fewest number of homes came onto the market in September than in any month since February.

"Buyers' choices will be reduced as the year progresses," predicted Dick Beeson, a listing service director and broker/owner of Windermere Real Estate/Commencement Associates in Tacoma.

The median price in September of a home in King County -- $395,000 -- was the lowest since February and has dropped 5 percent since August, with the yearly percentage increase the smallest since October 2003. Sales decreased by 22.5 percent from a year earlier, while pending sales dropped 30.6 percent, and the number of homes on the market shot up by 47 percent.

The statistics for all of the 19 counties the MLS covers in Washington were similar, with prices up 4 percent, listings up 33 percent, sales down 27 percent and pending sales down 32 percent from a year earlier. Five counties saw year-over-year drops in the median price -- including Pierce County, where prices dropped 2.44 percent, to $269,925.