Buyers racing interest rate hike

  • Mike Benbow / Business Editor
  • Sunday, May 9, 2004 9:00pm
  • Business

Last month, I wrote a news story suggesting that home sales in Snohomish County in March were at a crossroad.

Prices were at all-time highs and the number of listings had sunk dramatically. At the same time, sales were soaring. You just can’t keep raising prices like that forever without affecting sales.

So what happened in April?

Prices are at a new all-time high, listings are still lower than last year and sales are continuing to rise, although not as dramatically as the previous month.

The data:

  • The combined median price for single-family homes and condos is a record $240,000, up 7.65 percent from April 2003. King County prices were still much higher. The median there was just shy of $290,000.

  • There were nearly 4,000 homes to choose from in the county, 15.7 percent less than a year ago.

  • Sales were up by 10 percent, with 1,310 homes changing hands. Pending sales were up 7.9 percent.

    Nothing’s changed. So what gives?

    I think people are so worried that interest rates, which have risen some, will climb dramatically soon, knocking them out of the market. That seems to be why they’re willing to pay such higher prices.

    And of course there are so many different loans these days that most people who saved up at least a little money and who have a job can find some kind of program.

    The Northwest Multiple Listing Service, a group that represents real estate agents in 14 Washington counties and the organization that provided the above statistics, said its brokers cite rising consumer confidence, an improved job market and economy and concern that loan rates will jump.

    A news release from the listing service also noted that April in May are traditionally great months as families try to time their move for when school lets out.

    David Lereah, chief economist for the National Association of Realtors, said homes are still relatively affordable. And his organization also notes that there are unprecedented numbers of loan programs targeted at first-time home buyers.

    "Although interest rates are rising modestly, an improving job market is creating a favorable backdrop for home sales, but at a somewhat slower pace in the months ahead," he said.

    So maybe we’re nearing a crossroad, we just haven’t gotten there yet.

    If you’re still looking for a home in Snohomish County and price is a big concern, look north.

    So many King County workers are buying their homes in Snohomish County to save money that homes near the border are incredibly expensive.

    For example, homes in the Maltby area near the King County line have a median price of nearly $300,000.

    The least expensive, with a median price of about $210,000 is in the Stanwood, Arlington and Marysville areas.

    Everett, Mill Creek, Mukilteo, Edmonds, Lynnwood and Mountlake Terrace all had medians around $250,000.

    Homes in the Snohomish River Valley were closer to $230,000 and homes in the Granite Falls and Lake Stevens areas were closer to $215,000.

    What’s going to happen in the future?

    I think prices are going to continue to rise for a while as long as interest rate increases aren’t steep.

    Mike Benbow: 425-339-3459; benbow@heraldnet.com.

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