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Originally published November 26, 2013 at 7:45 AM | Page modified November 26, 2013 at 6:38 PM

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Seattle home prices lag national increase

Prices for Seattle-area single-family homes rose 0.3 percent in September over the prior month and 13.2 percent over the past 12 months, according to the S&P/Case-Shiller 20-city home-price index.


Seattle Times business reporter

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Prices for Seattle-area single-family homes rose 0.3 percent in September over the prior month and 13.2 percent over the past 12 months, according to the S&P/Case-Shiller 20-city home-price index.

Nationally, September’s 0.7 percent price gain over August outpaced the Seattle market. And over the past 12 months, the price of homes in 20 metro areas, as measured by the closely watched Case-Shiller index, rose 13.3 percent.

The average price for single-family homes in King, Snohomish and Pierce counties was still about 16 percent off the July 2007 peak, according to Case-Shiller. Prices are back to fall 2005 price levels, while nationally, prices are now at spring 2004 levels.

In 19 of the 20 metro areas, the rate of home appreciation slowed in September, while average home prices in Charlotte, N.C., fell 0.2 percent in September over the previous month.

For the past 12 months, 12 metro areas posted double-digit increases. Las Vegas, Los Angeles, San Diego and San Francisco recorded annual gains of more than 20 percent. Las Vegas led all cities, with a 29.1 percent gain over the year, while New York showed the weakest gain of 4.3 percent.

David Blitzer, chairman of the index committee at S&P Dow Jones Indexes, said the strong price gains in the West were fueling fears of another housing bubble.

“The talk is focused on fear of a bubble, not a rush to join the party and buy,” he said in a statement.

Other data hint the market is shifting toward slower growth. Existing-home sales have weakened, home-construction activity is far below the previous peak, and interest rates are expected to be higher in a year, Blitzer said.

Demographic changes also raise concerns about future demand: “The longer-run question is whether household formation continues to recover and if homeownership will return to the peak levels seen in 2004,” he said.

Home prices have benefitted from a decline in foreclosures. In the Seattle-Bellevue-Everett market, 1.67 percent of homes with outstanding mortgages were in foreclosure in September, down from 2.38 percent the previous September, reports Irvine, Calif.-based CoreLogic, a leading property-data firm.

About 4.3 percent of mortgage loans in the Seattle area were more than 90 days delinquent in September, down from about 6.5 percent a year ago, CoreLogic reported

Richard Eastern, co-owner of Bellevue-based Washington Property Solutions, said the share of homes with mortgages that are in delinquency or foreclosure is at its lowest level in five years.

Only about 8 percent of King County home sales in the third quarter were short sales, he said, down from a peak of 16 percent a year ago. In a short sale, a lender agrees to let a homeowner sell a house for less than the mortgage debt.

Meanwhile, Seattle-based Zillow, an online real-estate marketplace, released its estimates for home values in October. In the Seattle metro area, home values gained 13.8 percent over the year, far outpacing the overall annual increase of 5.2 percent for Zillow’s 388 metro areas.

Nationally, the housing market’s recovery appeared to stall: Home values fell for the second month in a row in October, the first consecutive monthly declines since October 2011, Zillow said. Half of the metros in Zillow’s study recorded a monthly home-value decline in October; Seattle’s average home value was unchanged.

“The slowdown we’ve seen these past few months was expected, and is largely welcome news for a market still struggling to find its natural balance,” said Zillow chief economist Stan Humphries, in a statement. “The conditions that led to the robust appreciation experienced earlier this year, including historically low mortgage interest rates, high affordability, low inventory and high demand, are waning.”

Zillow said it forecasts home values in the Seattle metro area to increase by 6.6 percent over the next 12 months.

Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com On Twitter @sbhatt



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