Median price of homes rises in Seattle, keeps dropping in suburbs

Home prices in the city of Seattle rose in January for the first time in nearly two years while they continued to fall in the rest of King County, according to one closely watched measure.

The median price of a house that sold in Seattle last month was $415,000, up from $400,000 in January 2009, the Northwest Multiple Listing Service said Thursday.

The last time Seattle — or any other area in King County — saw a year-over-year increase was in February 2008.

While prices rose 3.8 percent in the city in January, they fell 6.5 percent on the Eastside, 8.5 percent in Southeast King County, 11.1 percent in North King County and 11.2 percent in Southwest King County.

The suburban declines pulled the county's overall median price into the red, down 2 percent from January 2009.

The listing service's report isn't the first evidence that home values in Seattle and many other central cities are holding up better than those in outlying areas.

Portland economist Joe Cortright analyzed sales data in that city, Chicago, Los Angeles, Pittsburgh and Tampa, and concluded home prices had dropped 2 to 4 percentage points more in distant suburbs than in neighborhoods close to downtown.

Zillow.com, the online real-estate marketplace and database, says its research through November indicates homes in Seattle generally have depreciated less than suburban homes since the market's 2007 peak.

"It's a bull's-eye pattern — concentric circles," said Stan Humphries, Zillow's chief economist.

Seattle and many other central cities are faring better, he said, because many buyers are willing to pay a premium to live closer to work and such urban amenities as theaters, concerts and parks.

What's more, Humphries said, the supply of single-family homes in Seattle is limited: There aren't any big new subdivisions.

Neighborhoods north of downtown led Seattle's surge. Compared with the same month last year, the median house price was up 14 percent in Northeast Seattle, 9.1 percent in Queen Anne and Magnolia, and 7.9 percent in Northwest Seattle.

"You want to have two or three months of data before you call a trend," said Cortright, the Portland economist. "But that's still pretty striking."

Toni Clayton, broker at Windermere Real Estate's Wedgwood office in Northeast Seattle, said sales in her office were up 25 percent in January. People are buying in the city because "they work in Seattle, and they want to live here," she said.

"They don't want to be driving a million miles to work. We're just so tired of being stuck in all this traffic."

High gas prices helped trigger the housing bubble's collapse several years ago by pushing many far-suburban homeowners with long commutes into foreclosure, said Cortright. Foreclosures continue to depress home values in those areas, he said.

Home values in Seattle and other central cities also are holding up better because buyers, especially younger ones, are drawn to their "walkability," Cortright said.

The city is attracting bargain hunters, including empty-nesters leaving suburbia, said Richard Morrill, University of Washington geography professor emeritus.

"If I wanted a desirable house in Seattle, this is the time to get it," he said. Despite recent stabilization, the median price of a Seattle house still is down more than 17 percent from its August 2007 peak.

"Now that profit is no longer a given in people's minds when buying a home, buyers are realigning their priorities," Tim Ellis, editor of the Seattlebubble real-estate blog, said in an e-mail.

"They are less likely to 'drive till you qualify' when they realize that they probably won't be able to sell that far-flung home in a few years for tens or hundreds of thousands more than they paid and then move to the neighborhood they really wanted to live in in the first place," Ellis said.

The multiple-listing service reported the number of single-family homes sold in King County in January was up nearly 42 percent from January 2009, a particularly dismal month.

It was the eighth straight month of year-over-year sales increases.

Condo sales in the county were up 14.7 percent year-over-year. The median price of a unit sold in January was $267,500, down 4.4 percent from $279,750 in January 2009.

In Snohomish County, house sales in January were up nearly 35 percent from a year ago. The median price, $279,995, was down 10.5 percent.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com