Home sales were down last month in King County, and prices were down almost 12 percent King Co. area-wide compared to a year ago.
There were 1,446 completed transactions during October, which represents an improvement of more than 15 percent from twelve months ago when 1,256 sales closed. Inventory levels are at their lowest since April/May of 2007 which may led to stable or slight increases in home valuations. It’s encouraging seeing positive trends in sales activity and listing inventory.
There has been about a 5-months supply1 of homes since May, which is considered to be a balanced (or neutral) market favoring neither buyers nor sellers.. These numbers are a bit deceiving depending on your situation. ‘Standard resale homes’ (not bank owned or short sales) are looking at 5 month supply, compared to 10 months for short sellers and 2 months for Bank Owned properties.
The median price in King County dramatically dropped to $317,000, which is about a 9.4 percent loss from last month and 12 percent less than a year ago when the median selling price was $360,000.
October 2011: $317,000
April 2004: $315,000
The median home price of ‘standard resale homes’ was $382,500, Short Sales were $265,000, and Bank Owned $185,000.
Not every home has dropped in value. Much of the decline is due to a combination of factors, including shifting demographics and the influence of distressed properties, which may be as high as 40 percent in some areas. More investors and first-time buyers are purchasing in the more affordable price ranges, which results in a downward shift of median prices. Distortions caused by REO (bank- or other lender-owned) and foreclosed properties also contribute to price depressions. When you adjust for these conditions and compare ‘standard resale homes’, the change in home values is much less drastic. A more accurate reflection of price declines for the King County area is around 6 percent, citing research by CoreLogic, Wells Fargo Securities and other analysts.
The ‘temporary’ loan limit for conventional financing dropped back down from $567,500 to $506,000 after being in place for two years. Buyers in need of a mortgage above $506,000 must now qualify for a jumbo loan which is more restrictive and comes at a higher cost than conventional financing. According to the NWMLS, “nearly one-third of the available inventory is priced above the new, more restrictive dollar limit”.
