Seattle house prices take seasonal dip
House prices in the Seattle area edged down in January for the second straight month, but year-over-year they are up 8.7 percent.
By Seattle Times staff and The Associated Press
House prices in the Seattle area edged down in January for the second straight month, putting the region in the middle of the pack among 20 cities tracked by the Standard & Poor’s/Case-Shiller index.
But the region’s prices were up 8.7 percent year-over-year, ahead of the index’s 8.1 percent national gain.
January’s prices here dipped 0.3 percent, less than the 0.5 percent decline reported in December. The monthly changes are not adjusted to reflect slower winter buying.
Prices rose in nine of 20 cities on a month-over-month basis, for an average gain of 0.1 percent, S&P reported.
Year over year, the 20-city index rose at the fastest pace since summer 2006, just before the housing bubble burst. The gain suggests the recovery is strengthening ahead of the spring buying season.
For the Seattle area, the index of house prices is at 141.30, down 26.5 percent from its peak of 192.30 in July 2007.
Home prices nationwide are still 29 percent below their peak at the height of the housing bubble in August 2006. They are back only to where they were in August 2003.
Still, steady price increases should help make the housing recovery sustainable and add to economic growth. Higher home prices encourage more people to buy before prices rise further.
“Over time, persistently rising house prices also boost household wealth, make lenders more willing to lend because the asset they’re underwriting is appreciating, and ease pressure on local government budgets that get revenue from property taxes,” Jonathan Basile, director of economics at Credit Suisse, wrote in a research note.
Other recent reports have shown a strengthening recovery in housing, helped by near-record-low mortgage rates. Construction of single-family homes rose in February at the fastest pace in 4½ years. Sales of previously owned homes rose last month to their fastest pace in more than three years.
More Americans are putting their houses on the market, suggesting they believe the housing market will continue to strengthen.
The number of available U.S. homes for sale rose 10 percent last month, the first monthly gain since April. Even with the gain, the inventory of homes for sale was still 19 percent below a year ago.
Investment in housing, including home construction, contributed to economic growth last year for the first time since 2005; from 2006 through 2011, a drop in housing investment dragged economic growth down.