Houses here cost more than you think

As hot-button topics go, house prices are a sizzler guaranteed to generate complaints about how regular folks can't afford to buy in Seattle.

It's not just idle chatter.

The newest numbers, released Wednesday, put the median cost of a single-family home within Seattle proper at $440,250 — out of the reach of most workers, according to the Washington Center for Real Estate Research.

However, a new analysis by Windermere Real Estate shows the true median price of a stand-alone house is understated because the Northwest Multiple Listing Service (MLS) lumps town homes in with single-family houses.

The median price of a stand-alone house in Seattle last month was $460,000 — roughly $20,000 higher than the number released Wednesday by the MLS in its February housing-market activity report.

(Median means half the properties sell for more, half sell for less.)

Town homes only recently started emerging in Seattle as a workable solution to high housing costs. The housing style is growing rapidly, particularly in sought-after neighborhoods such as Ballard, Green Lake and West Seattle.

Those areas are where Gary Cobb, owner of Cobb Construction, is building town homes as fast as he can for buyers who want house-like amenities, such as their own front porch and garage, without having a detached home's price tag.

How much of a discount do town homes deliver?

Last month, Seattle's town homes sold for $389,500 — about $71,000 less than the median-priced Seattle house. They accounted for 14 percent of all residential sales in the city, a much higher percentage than anywhere else in King County.

For example, last month Bellevue reported just one town-home sale in the MLS. Seattle had 93 — and even that may be shy of the real number because an unknown percentage sell before completion, never reaching the open market, real-estate agents report.

Cobb says that five years ago 20 percent of his business was building town homes. Now it's 90 percent.

"The market has done nothing but heat up for town homes in Seattle," Cobb says, and prices are the biggest reason.

He says that by tearing down one worn-out house and replacing it with three or more town homes on a single lot, he can keep costs down, offer new construction to first-time buyers, and compete with other buyers for existing homes. Cobb is buying a $790,000 house by Green Lake as the future site of four town homes configured as two duplexes.

This tear-down scenario is the most common way town homes are being added to Seattle's housing stock.

It's also why town homes are a particularly Seattle phenomenon, Windermere owner Jill Jacobi Wood notes.

"We can still build single-family homes in the outskirts, but not in the city because there's absolutely no land," Wood says.

Although town-home styles vary, typically they're two or three stories, have that same number of bedrooms and baths, and are 1,200 to 1,400 square feet. Most are attached, although not always.

All are built on land zoned for multifamily housing, so at this point there's no chance they'll pop up in strictly single-family-house neighborhoods.

Unlike a condominium, buyers own the land under their unit and perhaps also a small patio-style yard.

But as with a condo, they co-own common areas, such as walkways, with others in their development.

However, typically there's no homeowners association, nor are there dues — two big selling points for town-home buyers, says Karen Lavallee, broker in Windermere's West Seattle office.

Mortgage lenders include homeowners dues when calculating how much home a buyer can afford.

"They might qualify for $350,000 on a condo because of the dues," Lavallee says. "But they might qualify for $450,000 on a town home."

Lavallee saw town-home construction explode beginning about four years ago. Of the 38 West Seattle homes available for $400,000 to $450,000, 23 are town homes.

"You can hardly find a free-standing single-family home at that price range anymore that's in good shape," she observes.

Those price differentials are being repeated in other parts of the city.

Greg Stamolis, an agent in Windermere's Ballard office, says the entry-level price for a single-family house there is about $600,000. Town homes are more like $450,000 to $500,000 to start.

On Queen Anne, house prices start at roughly $800,000, Stamolis says. Town homes in that neighborhood are available in the $650,000 to $750,000 range.

Lavallee and Stamolis report town-home buyers overwhelmingly are young and childless.

"If someone has two kids and a dog, they're not the profile I market to for a town home," Lavallee says. Nor are most baby boomers and retirees, because town homes have a feature they don't want: lots of stairs.

But what they do often have are luxury touches, such as slab granite. Cobb says he routinely uses it in town homes, but wouldn't in a single-family house "until it came close to $1 million."

Finishes were definitely a selling point for Don LaBella and his partner Glenn Cunningham. They recently signed a contract on a yet-to-be built town home in Ballard.

"Our first preference was to buy single-family. But with all the things we wanted and the price range we had, we couldn't find it" in the half-million-dollar range, LaBella says. The town home they chose, being built by Fremont-based Noland Homes, "stood out because of the cabinetry and tiling. And it has a bamboo floor; that's standard," says LaBella.

When they move in sometime in June, they'll be trading their 1,500-square-foot Phinney Ridge house for a town home about the same size. But otherwise, it will be a world away.

Their new home is energy-efficient. Their old one isn't. At 85 years old, something in their house always needs fixing, LaBella laments.

So what used to be a "negative slant" on town homes has been replaced, he says, with a true appreciation.

"I want something I don't have to fix. This is our last place in Seattle," LaBella says.

Elizabeth Rhodes: erhodes@seattletimes.com