North Beacon Hill, Rainier Valley buck home price drop trend

While most of the Seattle-area real-estate market was zigging last year, the Rainier Valley and North Beacon Hill zagged.

House prices dropped almost everywhere in King County in 2008, a Seattle Times analysis of sales data from the county assessor's office shows. The median price per square foot slid 5 percent countywide.

North Beacon Hill/Rainier Valley bucked that trend. Big time.

Here, the median price per square foot climbed 12 percent from 2007. No other neighborhood experienced greater appreciation. None even came close.

What made the hill and the valley so desirable? The area is relatively affordable, people who bought here last year say.

It's close in. Its diversity is a big plus.

And it boasts an amenity almost no other neighborhood can offer: the region's first light-rail line, scheduled to carry its first passenger July 18.

"That was a huge factor," says Cristina Valdes. She and husband Cuong Vu bought a 910-square-foot house on Beacon Hill for $334,500 in January 2008.

The couple, professional musicians and former New Yorkers, look forward to taking the Sound Transit train downtown to concerts at Benaroya Hall or to the airport when work requires them to travel.

They hope their neighborhood stations will attract shops and restaurants they can walk to, much as they did when they lived in Brooklyn's trendy Park Slope.

Light rail and its other advantages didn't entirely insulate North Beacon Hill/Rainier Valley from the real-estate downturn.

The number of sales in the neighborhood plummeted in 2008, as it did elsewhere. Year-over-year appreciation, a stunning 16 percent during the first half of the year, tailed off to 5 percent between July and December.

One house that sold for $472,500 in July sold again in October — for $440,000.

Still, in comparison with the rest of King County, this slice of southeast Seattle was a bastion of profitability for sellers.

The Times examined 90 neighborhoods into which the assessor's office divides the county. The year-over-year decline in median price per square foot hit double digits in 13 areas.

They ranged from tony Medina/Clyde Hill on the Eastside to modest Delridge/Georgetown in South Seattle.

Six other neighborhoods joined North Beacon Hill/Rainier Valley in showing gains. In none of those six, however, did annual appreciation top 4 percent.

About a dozen of the 149 single-family homes sold last year in North Beacon Hill/Rainier Valley were bought by developers who intended to tear them down.

Earlier this month, for instance, builder Foster Penner demolished the 1904 house on Beacon Hill that it bought for $675,000 last August.

Partner Roger Penner says six town houses will go up on the site. "We weren't buying a house — we were buying land," he says.

But the assessor's records suggest — and local real-estate agents confirm — that most buyers in North Beacon Hill/Rainier Valley last year were people looking for a place to live who found the neighborhood's older houses a good match for their lifestyles and their pocketbooks.

Many were first-time buyers, like Greg and Louise Wong.

They and their three children were living in a rented town house in New Holly before they bought an 84-year-old home a few blocks east of Rainier Avenue South early last year.

They first saw the house in September 2007, a few months after Greg finished law school. The location was ideal: Their oldest child, Myhanh, had just started kindergarten at John Muir Elementary — a block away — and Louise had begun working as the after-school coordinator there.

At $575,000, the four-bedroom house was out of their price range. But "we knew prices were dropping," Louise says. "We knew things had been sitting on the market for a while."

They bought it four months later for $520,000.

The Wongs love the neighborhood. "We don't have to drive anywhere," says Greg, a Seattle native. John Muir, the supermarket, restaurants, parks, the younger children's preschool — all are just blocks away.

Greg, now an associate at a downtown law firm, already has timed the walk from home to Sound Transit's Mount Baker Station: eight minutes. He plans to commute by rail when the trains start running this summer.

Despite last year's appreciation, you still can get more house for your money in North Beacon Hill/Rainier Valley than almost any other Seattle neighborhood. Houses sold here last year for a median price of $280 per square foot, compared with $324 citywide.

The area's relative affordability probably appealed to many buyers, says Eric Uyeji, associate broker at Windermere Real Estate's Mount Baker office, who bought a house on North Beacon Hill himself last year: "They say, 'Let's buy here, because we can't afford Mount Baker.' "

Price played a big part when first-time buyers Dustin Norlander and Billie Swift bought a 1,080-square-foot midcentury home a few blocks from Rainier Beach High School for $338,000.

"We weren't going to find a house on Capitol Hill in our price range," Norlander says.

The couple had planned on buying when they moved to Seattle from New York's borough of Queens a year earlier. But the market was nearing its peak then; they rented an apartment on Mercer Island instead.

When prices started to drop, they looked in Bellevue and Renton as well as Seattle before settling on Rainier Valley. The neighborhood's diversity was part of its appeal, Norlander says:

"Our block is really great — black, white, old, young. It felt more like Queens."

Diversity also was part of what attracted securities analysts and former Queen Anne residents Sarah Hasan and Dan Geiman.

They bought a renovated Victorian on Beacon Hill for $699,000 last April, when prices across the county were sliding but still had much further to drop.

"We overpaid," Hasan acknowledges, "but I don't have any regrets."

It's a great house in a great location, she says. Their next-door neighbors are Filipino and Chinese. They tutor at a nearby school. And they like how the community is getting involved in a neighborhood-plan update to address light rail's arrival.

Geiman and Hasan work downtown. Their house is "four long blocks" from Sound Transit's Beacon Hill Station. They plan to take the train to work. "We are really excited about light rail," Hasan says.

So is Nuria Agraw, a former Central District resident. She and her husband, Mustafa Getahun, bought a small house in Rainier Valley a few blocks from the Othello Station for $277,200 last spring.

Getahun works at the University of Washington laundry, steps from the Mount Baker Station. "For him, it's door-to-door," Agraw says.

His train ride will take about eight minutes.

The Beacon Hill house that Cuong Vu and Cristina Valdes bought is a five-minute walk from the Mount Baker Station and a seven-minute walk from the Beacon Hill Station. "To not have to drive everywhere, that would be good," Vu says.

But it wasn't the only reason they chose the neighborhood.

Valdes is a New Jersey-born classical pianist, Vu a trumpeter who grew up in Bellevue and now is an assistant professor in the University of Washington's jazz-studies department. They lived in New York for years, but Vu says it never really felt like home.

The couple stayed at Vu's mother's house in Clyde Hill for more than a year while they looked for a place of their own.

At first they focused on North End neighborhoods like Green Lake and Greenwood, but they say they could afford only condos or town houses there — not necessarily the best living arrangement for musicians.

"We both make a lot of noise," Valdes says.

Beacon Hill seemed out-of-the-way at first, but they had good friends in the neighborhood, Vu says, "and it's what we could afford." Their two-bedroom house, built in 1920, has hardwood floors, new wiring and plumbing, big windows and an updated kitchen.

Valdes' grand piano fills most of one bedroom. The couple hopes to finish the attic to provide more living space.

They enjoy their new neighborhood. But they wouldn't mind some changes, and they hope light rail can serve as a catalyst.

"We just need more restaurants, more places to hang," Vu says. "We're hoping [celebrity restaurateur] Tom Douglas moves into the neighborhood someday."

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

Justin Mayo: 206-464-3669 or jmayo@seattletimes.com