King County home prices in August slide back to April 2006

The median selling price of houses in King County dipped last month to its lowest level since April 2006, according to numbers released Tuesday by the Northwest Multiple Listing Service.

The broker-owned service said the median price of single-family homes sold in the county in August fell to less than $424,000, down more than $53,000 from August 2007. The 11 percent decline was the first double-digit year-over-year drop for King County since the subprime-mortgage crisis turned the market on its head.

Real-estate brokers said the August numbers reflect more willingness on the part of more, but hardly all, sellers to ask less for their houses to increase the odds they will find buyers.

"Houses that are priced right still sell in 15 or 20 days," said Jerry Howard, managing broker at the John L. Scott office in West Seattle.

But there's still resistance, he said, especially among owners of higher-end homes: "Some people just keep going on their dreams."

Matt Deasy, general manager of real-estate giant Windermere's Eastside operations, said the big year-over-year decline in median house prices shouldn't surprise anyone.

"Last August was probably the peak," he said. "The marketplace was very different then. That was before the lending standards changed."

And now?

"It's supply and demand," Deasy said. "There's still eight sellers for every buyer in a month."

Median condo prices in King County held up better than single-family homes, sliding about 6 percent from August 2007.

Closed sales of all residential properties — condos and houses — slid 38 percent, and pending sales dropped 23 percent, while the number of properties listed rose 18 percent from a year ago.

The story was similar in Snohomish County. Closed sales for houses and condos plunged 40 percent; pending sales slid 19 percent; and inventory rose close to 8 percent.

The median selling price for houses there fell 9 percent from August 2007, but condo prices — a bright spot — rose 12 percent.

In King County, the median single-family home price dropped more than 20 percent from a year earlier in North King County — Shoreline, Lake Forest Park and Kenmore. Prices dropped more than 14 percent in Seattle and about 9 percent on the Eastside.

In West Seattle, the median selling price for single-family homes dropped 13 percent from last August's level, from $428,500 to $374,000. That's partly because lower-priced houses in neighborhoods such as Delridge and White Center are selling well, and higher-priced houses aren't, Howard said.

They aren't moving because the asking prices still are too high, he said.

"I was out this morning to look at four houses in the $850,000 to $1 million range, all within a quarter-mile of each other, three with views," Howard said, "and if you looked at these houses with me, you'd have to say, 'How did they price those houses?' At least three of them are overpriced. The best thing you can do to satisfy clients today is telling them the truth."

The median selling price for a house in Kent dropped more than 15 percent since August 2007, from $365,500 to $310,000. William Collins, assistant broker at Windermere's Kent office, attributed the drop to the large number of bank-owned homes on the market as well as short-sale houses, which sell for less than the owner owes on them.

If an agent takes a client out to look at 10 houses in South King County during a weekend, he said, odds are that seven or eight of them will be "distressed" properties.

"When you're competing with something like that, it starts to drive the market," Collins said.

While the Puget Sound area may be a buyer's market, its condition isn't as extreme as most parts of the country.

The Multiple Listing Service estimated that King, Snohomish, Pierce and Kitsap counties have a 7.4-month supply of homes. A six-month supply is considered a balanced market.

Nationally, the supply is estimated at 11.2 months.

Deasy and other brokers expressed hope that the federal government's takeover of troubled Fannie Mae and Freddie Mac will help free up more money for borrowers and boost the local housing market.

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