King County median home price falls below $400,000; first time since early 2006

The economic turmoil that gripped the nation in October took its toll on the Seattle-area real-estate market.

Sales and new listings in King County both dropped significantly last month, according to statistics released Thursday by the Northwest Multiple Listing Service.

What's more, the median selling price of houses dipped below $400,000 for the first time in more than 2-½ years.

"October was such a chaotic month," said Karen Lavallee, manager of Windermere Real Estate's West Seattle office. "People who were seriously thinking about buying a home stepped back and took a breath."

Pending sales — offers that have been accepted but haven't closed — were down 22 percent from the same month a year ago and 46 percent from October 2006, when the market was white-hot.

The number of closed sales last month was off 20 percent from a year ago. The number of new listings added to the broker-owned service's database was the fewest since December, traditionally a low month.

Fear kept many potential sellers and buyers on the sidelines, said Kim Horn of the Horn Real Estate Group in Snoqualmie. With few exceptions, only those who absolutely must make a move now are in the market, she said.

"I'm working with eight sellers right now," Horn said, "None of them are selling because they want to."

Lavallee agreed. In West Seattle, she said, most sellers and buyers now are motivated not by pleasure but by pain: divorce, death, job loss.

The median price of King County single-family homes sold in October was $392,000, down nearly 12 percent from October 2007, the listing service said. It was the largest percentage drop, year-over-year, since the market turned south two summers ago.

Prices in King County haven't dipped below $400,000 since February 2006, the month the Seahawks played in the Super Bowl.

Houses sold in North King County — Shoreline, Lake Forest Park and Kenmore — experienced the biggest year-over-year price decline, 17 percent.

Median sales prices were down 12 percent in Seattle, 10 percent in Southeast King County and 9 percent on the Eastside.

Some real-estate professionals said that's at least in part because higher-priced houses just aren't selling. In West Seattle, Lavallee said, no house priced between $800,000 and $1.25 million has sold in about 45 days.

The median condo sale price in King County held up better, the listing service said, down less than 2 percent to $275,000. The Eastside and South King County actually saw an increase in the median condo price.

But countywide, pending and closed condo sales were down about 40 percent from October 2007.

In Snohomish County, the median price for single-family homes slid nearly 11 percent, to $333,760. But the median condo price actually increased 8 percent, to $252,750.

All 19 counties served by the Multiple Listing Service reported double-digit declines in pending sales. The numbers were disappointing, particularly after year-over-year increases in September that some said might signal a turnaround in the market.

The bombardment of negative economic news in October undermined consumer confidence, said Linda Dorgan, manager of John L. Scott's North Seattle office.

"If people don't have confidence, they have a hard time moving forward, both buyers and sellers," Dorgan said. "People just want to feel better about what's going on. They're talking about job losses. People are frightened."

Uncertainty about the election and its effect on the economy also kept some out of the market, brokers and agents said. Now that it's over, Lavallee said, some buyers and sellers may feel less uncertain.

Sales also could be helped by the end of the Machinists strike at Boeing and the drop in gas prices, Dorgan said.

While pending and closed sales of single-family houses were down about 20 percent overall in King County in October, the drop was more severe — about 30 percent — on the Eastside. In the county's easternmost reaches — including Sammamish, Snoqualmie and North Bend — sales activity was off nearly 40 percent.

Horn, the Snoqualmie agent, said the longer commutes from those communities to job centers might have depressed sales.

But opportunities abound for those in a position to buy, she said.

"I'm working with a lot of first-time buyers who feel like they're finally ready to take the plunge."

Eric Pryne: 206-464-223 or epryne@seattletimes.com

Elizabeth Rhodes: erhodes@seattletimes.com

Information in this article, originally published Nov. 7, 2008, was corrected later in the day. A previous version of this story incorrectly stated that no house in West Seattle priced above $800,000 has sold in about 45 days.