Seattle home prices fell last month from their July level and posted the lowest year-to-year increase in 18 months, according to new statistics released Tuesday.
August prices fell 3.8 percent from July and were up 8 percent from August 2005, according to the Northwest Multiple Listing Service. Prices have dipped month to month several times in the past year, but the year-to-year increase was the first in the single digits since April 2005 and the lowest since February 2005.
The numbers also showed a continued increase in inventory and slight decline in sales in August, compared with the same month last year.
Local housing executives and experts welcomed the slowing price growth as evidence of the market easing back from a frenzy to a solid level it can maintain.
"Double-digit appreciations scare me, because I don't believe that they can be sustained," said Matthew Gardner, a local land-use economist. "Incomes have a tough time keeping up with that."
"I think that it's good to have it level off a little bit," Windermere Real Estate President Jill Jacobi Wood said. "I think they kind of need to so people can still get into houses."
Nationally, home prices are decreasing in some areas; the National Association of Realtors has said high inventory could cause prices to fall nationally for the first time since 1993.
Talk of a housing bubble has prompted some prospective buyers to wait.
"I'm a firm believer that there's a bubble nationally and there's a bubble in Seattle as well," recent New York City-transplant John Bitzer said Sunday after looking at a $1.05 million Seward Park home.
"I think that prices are going to fall quite substantially," he said, adding that he planned to wait.
Gardner said some homes and areas locally might see price declines, but he and other local observers do not expect citywide prices to go down year over year. They point to strong job growth and low interest rates and say Seattle hasn't attracted as many speculators or seen prices shoot as high as some other places.
"It's still a strong market," Gardner said.
A more temperate market may shock sellers accustomed to the hot times of recent years, experts said. Gardner said the increasing number of homes on the market might be a sign that sellers are not willing to budge on asking prices.
"Everybody could just throw numbers on these houses, and they would sell (before)," Jacobi Wood said. "Now I think everybody needs to get the price right."
"Price reduced" signs have become a more prominent feature of the Seattle landscape in recent weeks. A half-mile from the home Bitzer toured, the owners of a house that has been on the market for more than three months cut their asking price from $989,000 to $895,000, and Windermere Real Estate agent Carole Alexander was telling all comers to make an offer.
But Jacobi Wood said her agents still are getting multiple offers on well-priced homes, even in the higher end of the market. In a news release accompanying the new statistics, Northwest MLS Director Mike Skahen said homes in close-in Seattle neighborhoods still were selling well.
"Good houses in high-demand neighborhoods are still in very short supply in all price ranges with no shortage of buyers," said Skahen, the broker at Lake & Co.
J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate, said in a statement that the situation has gone from a "frenzy" to "more typical for a strong market."
When prices start coming down, buyers tend to buy better houses, rather than spending less, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.
But potential buyers who wait might still be disappointed, even if prices do fall, he cautioned.
"It is very conceivable that even though prices will come down, (increasing) interest rates will eat up much of the differential," he said. "Are you going to be better off having managed to save on the purchase price? Maybe. Maybe not."
Back in the Seward Park house where Bitzer espoused his bubble theory, Windermere agent Carolyn Mollot expressed her own caution about the market.
"I told my own daughter to wait a little bit," she said.
http://seattlepi.nwsource.com/local/284894_realestate13.html
