Snohomish County home prices still falling

Snohomish County home prices fell again in October, a combination of sellers offering recession-based pricing, bank-owned homes sold at a bargain, and smaller new homes built on lower-cost lots.

The median price of a home last month fell to $260,000 — a drop of $20,000 or 7.14 percent from a year ago, the Northwest Multiple Listing Service reported Nov. 4.

The listing service also reported that sales were slow in the county in October, with pending sales down 19 percent and completed sales off nearly 30 percent from a year ago.

Mike Applebee of Chicago Title said the lower sales aren't a surprise — the federal tax breaks that had earlier been offered to buyers siphoned off many potential customers.

But he said people are missing what he views as an exceptional deal — prices comparable to what they were in 2004 and interest rates as low as they've been in 50 years.

“We've had fantastic interest rates,” he said.

Applebee said there are several factors at stake that have been pushing home prices down in the county for many months.

One, he said, was a significant amount of foreclosed homes on the market and of bank-owned lots ready for development.

The banks have been trying to unload a lot of properties at very low prices, a move that he said has provided some very low-cost lots for builders. That, combined with a trend toward smaller houses, has driven the cost of new homes down, he said.

Applebee said about 1,100 to 1,200 lots ready for development have been sold so far this year in the county. About 1,000 are still left, he said, adding, “We should run out of those lots by next summer.”

He expects the banks to continue selling homes they've taken back for a couple of more years.

The various factors pushing down prices have created some great deals in some areas, Applebee said. He noted that he was running some numbers of homes for sale in Marysville and Lake Stevens recently and found that the monthly mortgage for buyers would be less than the cost of renting the same home.

“This is like the perfect storm for the buyer,” he said.

Asked when the county's home prices will stabilize, Applebee said it's anybody's guess.

“How do you know?” he asked. “It's like buying gold.”

He said he expects more pressure next year to raise interest rates, which would have a significant effect on the overall cost of a home.

Meribeth Hutchings, a Windermere broker in Lake Stevens, said Snohomish County prices typically follow King County's, which have been stable for about nine months.

The median home price in King County last month was $350,000, $1,000 more than a year ago. She said she was once told that real estate for communities surrounding metropolitan areas often reacted like a pond after a stone has been tossed in.

“I'm waiting for those waves (of price stability) to get back to us from King County,” she said.

Hutchings noted that there was a large amount of development going on in the county when the recession hit.

“We were just caught up with a lot of inventory — a lot that the banks had to take back,” she said. “We've got a lot of inventory to get through.”

October home sales

SNOHOMISH COUNTY

Listings: 5,455, up 5.5 percent

Pending sales: 968, down 19 percent

Closed sales: 579, down 29.8 percent

Median price: $260,000, down 7 percent

ISLAND COUNTY

Listings: 1,014, down 6.7 percent

Pending sales: 78, down 33 percent

Closed sales: 75, down 25.7 percent

Median price: $270,000, down 3.6 percent