Home buyers, it's your time to haggle

Ewan Hruska and Leya Barr plan to buy a house in Seattle -- if they can sell their home, which has been on the market in Shoreline since October.

"We have our price point that we can't go below," Barr said, outside of an open house in Greenwood late last month. "It's made it difficult to price it to move."

They estimated between 60 and 80 people have toured the house.

"We've never had a problem with viewings," Barr said. "It's just, we haven't had an offer."

Area homeowners who did manage to sell in May apparently made deep cuts in their prices, although much less so in Seattle, according to numbers the Northwest Multiple Listing Service released on Thursday.

The median price of a King County house sold in May was $440,000, down 6.2 percent from a year earlier and much more than the year-to-year drops of 3.6 percent and 3.3 percent in April and March. The median price of all 19 counties the listing service covers was down more than 7 percent.

House prices held up better in Seattle, where the median was $475,000 in May, down 2.7 percent from a year earlier and up 8 percent from April.

The county's median house price has now fallen 8.5 percent from a peak in July. After a couple of month-to-month increases, the median price dropped 1.9 percent in May from April.

"There is clearly some bargain hunting going on," said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. "Certainly there are some sellers out there that are panicking a little bit. Their homes have been on the market much longer than they had been accustomed to seeing homes on the market, so they have been accepting some disappointing offers."

But the decreases are greater than what the market merits, Crellin said. "(I) don't see that we should be having the degree of problems that these numbers are implying."

He said Seattle's relative strength is "a reflection of gas prices, to some extent, the desire to be closer to the jobs."

The median condominium price was $320,000 in Seattle and $287,925 countywide in May, up more than 4 percent in the city and down 0.7 percent countywide from a year earlier.

Inventories of unsold homes have been building and sales dropping since well before prices started to dip. Real-estate agents and other market observers have said buyers are unwilling or unable to pay what sellers are demanding, while sellers have been slow to lower their prices.

May's listings of houses and condominiums were up nearly 50 percent in Seattle and 47 percent countywide from a year earlier, while sales sank more than 46 percent in the city and 39 percent countywide.

"The industry needs to convince buyers that this is a good time to be in the market and to have them evaluate the degree to which higher interest rates that are almost certainly on the horizon for the housing market are going to affect their ability to afford the homes," Crellin said. "Waiting for the prices to get to their absolute lowest point while interest rates are rising doesn't mean that the purchasers are going to be saving much of anything on the monthly payments."

Many of the houses that are sitting on the market have some aspect -- such as an unusual layout or, in Hruska and Barr's case, being on a somewhat busy street -- that appears to be preventing buyers from pulling the trigger.

Once their house sells, Hruska and Barr figure they'll be able to take advantage of the slower market as buyers.

"We're going to save on the other end," Barr said.

Hruska and Barr have not looked at many houses lately, because they don't want to get their hopes up. They happened to be driving by the Greenwood open house.

Carolyn Murphy, who has been trying to sell her Maple Leaf house since March, said she has not been holding back on looking for a new home.

"I've fallen in love so many times and watched those houses go," she said.

Murphy said she's seen a definite change in the market over the past year. "Last year we had people knocking on our door wanting to buy the house and it wasn't for sale."

There still are plenty of people who like her house, she said. "But they seem to be scared to do anything right now, and they have lots of options."

Buyer Janice Yawman called the prospect of buying before prices bottomed out "scary," but figured she would be OK even if that happened.

"I'm looking for a place to live," she said. "I'm not looking for a place to flip and make money."

Yawman refrained from looking in the Seattle market when she first moved from Oregon more than a year ago and rented while her former home sat on the market.

"It took me well over a year to sell my house and I had a fabulous place," she said. "I just waited."

Now that she is looking, she's finding a lot of selection but not much quality. "There's an awful lot of stuff out there," she said. "Most of it is not in very good shape."

In a news release accompanying the numbers, real estate executives said, as they have in past months, that it was time to buy.

"If you're a buyer, this is the time to take advantage of these unique market conditions," said J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate. He pointed to plentiful selection, historically low interest rates and a federal rules change that allows buyers to get lower rates on bigger loans.

The price drop has "already happened," said Mike Skahen, broker of Lake & Co. Real Estate. "It's a great time to negotiate with sellers."

He reported a noticeable pickup in close-in Seattle markets and blamed overall slowness of the area on negative press.

Dick Beeson, broker/owner of Windermere/Commencement Associates, in Tacoma, pointed to the gray weather.

"We still haven't had summer hit us yet as the weather remains cool, wet and cloudy," he said in the release. "I expect both temperatures and the market to heat up as summer approaches."