More buyers than sellers push King County home prices up

By Marissa Evans

Seattle Times business reporter

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Peter and Myrna Hillyer opened their North Seattle home of 45 years to potential buyers Wednesday.

One was Meaghan Frisbee. She and her husband are trying to decide between adding a second floor to their house in Phinney Ridge or moving. They’ve seen 20 homes in the last month.

“All the houses are getting snapped up,” said Frisbee, cradling her 3-month-old daughter in her arms. “It’s hard to find a house.”

The Hillyers are in a good spot. They put their home in the Bryant neighborhood on the market a week ago at $650,000 and already are mulling an offer.

“We don’t need a large home like this with six bedrooms,” said Myrna Hillyer, standing next to the spread of crackers, cookies and meat-and-cheese platters in the kitchen of the home the couple bought for $23,000 in 1968. “We’re planning to move back to Mercer Island.”

Lack of homes for sale has been the major reason behind rising home prices in the Puget Sound area. The Northwest Multiple Listing Service said Wednesday that fewer homes were on the market this May than a year ago, while the number of pending sales rose 8.5 percent and actual sales rose 22.4 percent.

The MLS reported the median sale price of a single-family home in King County was $417,500, up 15.3 percent from the same month a year ago and up 4.3 percent from April. It was the second month in a row that the median price of a home topped $400,000 and the 14th straight month of year-over-year price increases.

The median price in King County has increased by double digits over a year ago every month since October and has returned to August 2008 levels.

Glenn Crellin, of the Runstad Center for Real Estate Studies at the University of Washington, said the shortage is happening for a combination of reasons. Some homeowners are waiting for prices to rise even more, while others owe more than what they could get for their home. This prevents owners from being able to sell unless they can make up the difference out-of-pocket.

Nearly a third of homeowners in the Seattle metropolitan area with mortgages are underwater, according to a report last month from Zillow, a Seattle-based real-estate data provider.

And there are the banks holding onto foreclosed homes.

“There seems to be a big number of properties in the hands of lending institutions that haven’t been put on the market with the shadow inventory,” Crellin said. “It’s something we need to dispose of in order to stabilize the housing market.”

Despite the shortage, Matthew Gardner, principal for Gardner Economics, said this is the kind of report he’s been looking forward to seeing. The number of listings increased 21 percent for Seattle in the past month.

“We are seeing a late increase in spring listings,” Gardner said. “It’s going to be a busy summer now.”

In Snohomish County, the median sale price for a single-family home rose 15.6 percent from a year ago to $300,500. In Pierce County, the price rose 8.9 percent from a year ago to $215,000. In Kitsap County, it rose 8.8 percent from a year ago to $245,000.

Condo prices also rose in King and Snohomish counties compared with a year ago. In King County, the median rose 11.9 percent to $235,000. In Snohomish County, it rose 14.7 percent from a year ago to $174,000.

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