Hot December for King County home sales

You've heard of Christmas in July? The real-estate market got just the opposite last month: July-like sales for Christmas.

More houses sold in King County in December than in any month since federal tax credits expired last summer and sent sales into decline, according to statistics released Wednesday by the Northwest Multiple Listing Service.

Buyers closed on 1,458 single-family homes last month — nearly as many as in July, and a whopping 34 percent more than November's total.

Winter usually is a slow season for home sales. They typically peak in summer, then tail off as days get shorter. December's closings usually fall short of November's.

That pattern apparently broke last month. Just four fewer houses sold in King County in December than in the same month in 2009, which was the best December since 2006.

Why the surge? Industry insiders and observers cited several possible influences:

• The market finally has worked its way through the lull it fell into after the tax credits' expiration.

• Buyers are climbing off the fence, even if they suspect prices will continue slipping, because they fear interest rates will rise and wipe out any savings.

• There may have been a push to get some long-languishing short sales — sales for less than sellers owe lenders — closed before year-end.

But there could be more to the surge than that, said Doug Davis, owner/broker at Hallmark Realty in Kirkland.

"There does seem to be a little bit of renewed optimism out there. Let's talk in two months and see if it's a trend," Davis said.

More numbers:

• The median price of houses sold in King County in December was $370,000, down 2.6 percent from December 2009's median of $380,000.

• King County condo sales last month slipped 4.5 percent from the same month in 2009. The median price, $225,000, was down 8 percent year-over-year.

• The median price of a single-family home that sold in Snohomish County in December was $265,250, off more than 7 percent from December 2009. Sales there fell more steeply, off 10 percent year-over-year.

But, as in King County, last month's closings were up significantly from November — 18 percent. Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, called those increases "encouraging signs."

December's closings consummated contracts signed in October and November, when many buyers "realized interest rates probably were at their low point, and that their monthly payments might be higher if they waited," Crellin said.

Prices would have to drop 10 percent to counteract a 1 percentage point increase in interest rates, he added.

Mike Skahen, owner/broker at Lake & Co. Realty in North Seattle, said a spike in pending sales in his office in November presaged the December surge.

He attributed it in part to an end to the lingering aftereffects of the federal tax credits. They boosted sales before they expired at midyear as buyers rushed to close in time to qualify, Skahen said — then came the fall.

"It took sales away from August and September — those people bought in March," he said. "It affected us positively, and then for about four to six months it affected us negatively."

December's statistics suggest that effect has passed, Skahen said.

Not everyone believes the surge is real. Tim Ellis, who writes the bearish Seattle Bubble real-estate blog, repeated a criticism he has said before — that the listing service allows member agents to input sales into its system long after they actually close.

The December spike is so unprecedented that it strains credulity, Ellis said: At least some sales reported last month may actually have occurred months earlier.

The listing service says it has reported sales the same way for two decades, and its statistics are accurate.

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