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Seattle marks a full year as America's hottest housing market, with no end in sight

Mike Rosenberg, The Seattle Times on

Published in Home and Consumer News

Compared to just a month ago, prices here ticked up just 0.2 percent, among the lowest rates in the country and the slowest since last winter (although that's typical for us this time of year--when adjusted for normal seasonal changes, our month-to-month price growth beats out the national rate). And the year-over-year price growth of 13.2€‰percent was down a bit from the peak surges seen earlier this summer, when costs soared as much as 13.5€‰percent, which had been the biggest jump since the bubble a decade ago.

Plus, we are heading toward the slowest time of year for home shopping, when buyers are more likely to avoid bidding wars and prices usually drop a bit from their spring and summer highs.

"There are early signs that price (growth) may have peaked" in Seattle, said Cheryl Young, a senior economist with Trulia.

But the Case-Shiller data show the mini-slowdown is happening only for luxury homes and in expensive neighborhoods. Prices for cheaper homes, which are generally in outlying suburbs, are rising at their fastest rate in more than three years.

The Puget Sound region continues to stand out for a few reasons: Tons of well-paid tech-job openings have drawn in scores of new residents while fewer and fewer people are selling their homes, leading to intense competition among buyers. Seattle also is among the most coveted markets for foreign investors. And rents here are soaring at close to the fastest rates in the country, with the average two-bedroom rent now topping $2,000, pushing more people into the homebuying market.

Jeff Reynolds, a Windermere broker who blogs for urbancondospaces.com, noted this week that there are only five condos available in downtown Seattle for under $500,000, and that price now typically gets you a small one-bedroom. Reynolds found significantly more condos for under half a million dollars in the downtowns of peer cities--even San Francisco has more (although those other cities have larger condo markets than Seattle).

Overall, prices here have soared 80 percent since bottoming out five years ago--only San Francisco and Las Vegas have had bigger price increases during that span, and prices nationally grew 46 percent over that time frame. And home values locally are up 20 percent over the old pre-bubble peak a decade ago, behind only Dallas and Denver.

The median house now sells for $725,000 in Seattle and $855,000 on the Eastside. It's $450,000 in Snohomish County, and near $315,000 in both Kitsap and Pierce counties.

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