Seattle posts first annual sales gain in 3 yrs; median sale price falls

Seattle region home sales rose above last year's level for the first time in more than three years last month amid relatively robust sales below $300,000. The median sale price fell, ending its three-month streak of month-to-month gains, a real estate information service reported.

A total of 4,221 new and resale houses and condos closed escrow last month in the Seattle-Tacoma-Bellevue metropolitan statistical area encompassing King, Snohomish and Pierce counties. Last month's sales rose 2.5 percent from the prior month and were 8.8 percent higher than a year earlier, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.

July's sales total was the highest for any month since October 2007, when 4,434 homes sold. But it still marked the second-lowest tally for a July, behind last year, since 1994, when DataQuick's complete Seattle-area statistics begin. Last month's annual gain for total sales ended 37 consecutive months of year-over-year declines.

Sales of newly built homes, which last month were at the lowest level for a July since 1994, continued to suffer, marking the 33rd consecutive month of year-over-year sales declines.

Resales of single-family detached houses - which account for nearly 70 percent of all sales - rose 17.7 percent from a year ago, marking the second consecutive month with an annual gain. Before June, such an annual gain hadn't occurred since late 2005. Last month 48.9 percent of the existing house sales were for less than $300,000, up from 46.5 percent in June and 37.6 percent in July 2008. Sales of more affordable homes have been spurred in large part by the combination of lower prices, low mortgage rates and home buyer tax incentives.

The number of existing single-family houses sold for less than $300,000 last month rose 6.1 percent from June and rose 24.1 percent from a year ago, while resales of houses over $300,000 fell 2.5 percent from June and fell 14.5 percent from July 2008.

The median price paid for all new and resale houses and condos combined last month dropped to $300,160, down 3.8 percent from $312,000 the prior month and down 11.7 percent from a year earlier. Last month's median was the lowest since it was $299,000 in March this year and it was 17.8 percent lower than the Seattle area's peak $365,200 median in June 2007.

The overall median has fallen on a year-over-year basis for 18 straight months.

The median paid for resale single-family detached houses last month fell to $310,000, down 3.1 percent from June and down 13.9 percent from a year ago. That median stood 21.4 percent below its $394,500 peak in June 2007. It has fallen on a year-over-year basis for 19 consecutive months.

Another key price measure for resale single-family houses, the median price paid per square foot, fell to $173, down slightly from $174 in June and down 19.8 percent from a year ago. Last month's figure was 28.1 percent below the peak $240 median paid per square foot in July 2007.

Foreclosure resales continued to play a larger role in the Seattle market than they did a year ago, but there was no change between June and July. Last month 16.9 percent of all resales were houses or condos that had been foreclosed on in the prior 12 months - the same as in June but up from 5.8 percent in July 2008. Foreclosure resales peaked in January this year at 23.9 percent of resales.

Though the number of homes lost to foreclosure waned slightly over the winter and early spring, it's begun to rise again in recent months. That means foreclosures will continue to be a drag on home prices for the foreseeable future. In July, 857 houses and condos were foreclosed on in the three-county Seattle region, down insignificantly from 863 in June and up nearly 78 percent from a year ago. Foreclosures in June and July were at the highest level since they began to surge in 2006. The figures are based on the number of trustees deeds filed with the county recorder's office. The document signals the home was lost to foreclosure.

First-time buyers and investors will continue to play a vital role in the recycling of foreclosures. Last month about 36 percent of all buyers used government-insured FHA loans, a popular choice among first-time buyers, according to an analysis of public property records. Absentee buyers made up 13.1 percent of all purchases - a relatively low percentage in the West. Absentee buyers include investors and second-home buyers, mainly, as well as others who indicated at the time of sale that they will have their property tax bills sent to a different address.

In Seattle and elsewhere in the West there were signs credit was loosening up a bit. The use of adjustable-rate mortgages ("ARMs") to buy homes rose in July to 4.4 percent of all Seattle-area purchase loans, up from 3.6 percent in June and a decade low of 1.8 percent in May this year. However, July's purchase ARM level was down from 19.2 percent a year ago and down from a monthly average this decade of nearly 33 percent.

Seattle-Tacoma-Bellevue, WA MSA

Number of sales	Jul-08	Jul-09	%Chng
Resale houses	2,458	2,894	17.70%
Resale condos	583	630	8.10%
New homes	838	697	-16.80%
All homes	3,879	4,221	8.80%

Median sale price	Jul-08	Jul-09	%Chng
Resale houses	$359,950	$310,000	-13.90%
Resale condos	$269,900	$247,625	-8.30%
New homes	$354,950	$320,000	-9.80%
All homes	$340,000	$300,160	-11.70%