Housing prices stall while inventory climbs

Reflecting turmoil in the mortgage markets and buyer uncertainty, the median sold price of King County detached houses has fallen two months in a row. It's now back to where it was in early spring — perhaps the first sign that prices are softening as the number of homes for sale continues to build.

The county's median single-family home price was $450,000, according to the September sales report released this morning by the Northwest Multiple Listing Service.

That's just below last March's median of $457,500 and almost $32,000 less than this year's high of $481,750 in July.

(Median is the midpoint; half the properties sell for more, half for less.)

However compared to the previous September, house prices are up 5.9 percent.

Perhaps more striking, however, is the continued abundance of homes for sale. Every month since May has seen the year-over-year supply grow by 40 percent or more compared to the same month in 2006.

Last month the supply of houses was up 40.2 percent year-over-year — lower than July's high of 45.8 percent, but still nearly double inventory increases seen at the beginning of the year.

Meanwhile sales are lagging. Last month offers were accepted on 1,541 King County houses — a 32 percent drop from the previous September's 2,271 sales.

The same situation is occurring with the county's condominium sales. September inventory was up 74.2 percent, while pending sales were down 26.7 percent.

Despite this, King County's condo prices continue to climb. Their median sales price was $299,900, up 14.8 percent over the previous September and up $15,000 from August. Condos comprise a third of all homes sold in the county.

"The turbulence in the mortgage market has definitely had an effect on sales activity," says Lennox Scott, chief executive of John L. Scott. "We knew it would be this way for August and September, and w're still seeing the major effects here in October."

Meanwhile Windermere agent Paul Stickney says other agents are confirming what he's seeing in North King County:

"We've got more buyers waiting to see what the market is going to do than we've had in years."

Within the four-county region that also includes Snohomish and Kitsap, Pierce was the one county to post year-over-year dips in both median house and condo prices. Last month houses there sold for a median $277,000; a year earlier it was $279,950. Pierce County condos fetched a median $215,000 last month, or $10,000 less than a year before.

Snohomish County's single-family home prices were up 2.7 percent year-over-year to last month's $368,000. Condo prices, meanwhile, showed robust growth: up 9.1 percent over a year earlier to a median $239,950.

In the four-county region, Kitsap County reported the highest year-over-year price growth for single-family homes — up 12.8 percent. Last month's median was $304,597 compared to a year ago's $269,900. Just 32 condos sold in Kitsap County last month.

Elizabeth Rhodes: erhodes@seattletimes.com