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Tuesday, March 7, 2000

Sitting pretty in Seattle's South End

After months searching, many frustrated buyers settle where prices are low, commuting is easy

Seattle Times staff

Tom & Robyn Miller When Tom and Robyn Miller moved to Seattle from Idaho two years ago, they had their hearts set on buying a house. Tom, an environmental scientist, wanted Kirkland. Robyn, a pharmaceutical sales rep, was drawn to Wallingford, Green Lake and Maple Leaf. What they found was frustration and disappointment.

"The prices are so high for houses that are so small that I had a hard time being excited about that area (North Seattle)," Tom says. And "for houses without a yard or a view," Robyn adds.

Still, for more than a year they continued to search in North Seattle for an older house with character. Along the way, they reluctantly upped their price range from $200,000 to $250,000. Still no luck.

Finally, they ventured south, all the way out to West Seattle, and there they found it: a 2,300-square-foot, 50-year-old house with hardwood floors and a view, in a community with that precious neighborhood feel - within their budget.

Donald Fillius, West Seattle branch manager of Prudential Northwest Realty, nods knowingly at such tales. "It's been an ongoing story for the last 10 years that people come here after looking in North Seattle and finding they can't afford it."

Fillius has seen buyers who've lost North End bidding wars practically swoon when they discover prices in West Seattle are $100,000 to $200,000 less than on Queen Anne - and the competition to buy is nowhere near as intense.

Word is getting out, though. "It used to be people would come over and say 'I didn't know this place existed.' They do now. The bottom line is West Seattle isn't this great secret."

Nor is West Seattle alone. A Seattle Times computer analysis of single-family home-sales data from the King County Assessor's Office reveals that large parts of South Seattle - from Beacon Hill south through SeaTac - are really taking off.

Good investment potential

Ranked by appreciation over 15 years, more neighborhoods in South Seattle are moving up than in any other region of King County.

What's more, six South Seattle neighborhoods have cracked the top 25 percent in terms of appreciation countywide. They are North Central West Seattle, West West Seattle, South Central West Seattle, Rainier Valley, Mount Baker and south Beacon Hill.

As a result, someone who bought a house in the Rainier Valley five years ago will have enjoyed roughly the same annual rate of appreciation - 8 3/4 percent - as someone who bought a house in Laurelhurst or Kirkland.

And someone who bought in south Beacon Hill has seen about the same run-up in appreciation - just over 9 percent a year - as a buyer in View Ridge or East Sand Point, both hot North Seattle areas.

Study a map and drive these neighborhoods and it's obvious why these South Seattle neighborhoods are growing in value: Many have views, are convenient to downtown Seattle, and most are stocked with the pre-World War II housing so many buyers want.

Furthermore, they're more affordable than homes in North Seattle and the Eastside. "The investment potential on this end is far more than on the North End. If there's a (price) ceiling, we're still much further from it," says Fillius.

The Seattle Times computer analysis shows, for example, that last year a buyer could expect to pay $253 a square foot for a house on Capitol Hill, but just $169 in Mount Baker. (These are median square-foot prices, which means half the properties in these neighborhoods were above this number, half were below.) Or they could pay $163 in Kirkland compared to $129 on South Beacon Hill. Or $187 in West Ballard versus $172 in Fauntleroy.

"If you go back to median price per square foot, you find out what's going on in South Seattle," says real-estate counselor Anthony Gibbons. "Where everyone can create value is to buy homes in the lower end of the spectrum in neighborhoods that are changing, and that's where you're seeing that appreciation."

The most affordable areas

Sea-Tac Airport photo Some neighborhoods continue to offer even lower median home prices, particularly Rainier Beach, Burien, SeaTac, Boulevard/Riverton and South Park/Georgetown. All had median square-foot prices of less than $125 in 1999, making them the most affordable neighborhoods in the Greater Seattle area.

Why are they low?

Realtors say one possible reason is buyer concern about noise from Seattle/Tacoma International Airport coupled with uncertainty over the effect of the airport's new third runway.

Conversely, there has been strong interest in South Seattle neighborhoods closer to Lake Washington, and prices reflect that. That's particularly true of Mount Baker.

Kimberly Brangwin, a Coldwell Banker Bain broker, says the area "has always been wonderful, but it's being rediscovered" because of its proximity to both downtown Seattle and I-90, the latter making it convenient for Eastside tech employees.

With rediscovery comes sprucing up. Brangwin says there used to be some poorly maintained areas adjacent to Mount Baker that buyers had to drive through.

"But now those homes are being fixed up so the whole window to Mount Baker is improving, whereas places like Laurelhurst that retained a sense of maintenance of the housing all along kept those property values higher."

Now a starter home in Mount Baker is around $200,000, she estimates. South of Mount Baker in the Rainier Valley, a starter-home fixer will command about $125,000. She says the same home three years ago would have sold for perhaps $80,000.

But the Rainier Valley, like most of Seattle's South End, is being discovered. It's being redeveloped with new businesses, restaurants and shopping areas - which means $125,000 is unlikely to buy an entry-level house much longer.

Elizabeth Rhodes can be reached at erhodes@seattletimes.com.

Copyright © 2005 The Seattle Times Company

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