King County Home Prices Rise First Time in 3 Years

By
Real Estate Agent with RE/MAX Northwest Realtors

King County Average Home Prices 2000 - 2010

King County average home prices posted their first gains in three years.  After three years of continued decline, King County home prices may have finally reached their bottom.  December 2010 ended the year with a surprise jump in the number of homes sold, along with a rise in home prices.  Many communities in King County posted year over year price gains, while other are still showing losses.

This reinforces the popular tag line "location, location, location".

When checking the individual communities on the City Charts on our blog:

www.snohomishcountymarketstatistics.blogspot.com

We see that several cities posted positive year over year price gains:

Bellevue
Kirkland
Redmond
Edmonds
Lake Forest Park
Woodinville

We track only north and east of Seattle communities, there may be gains in orther areas.

An increase in home prices doesn't necessarily mean homes have increased in value, but rather higher priced homes have been selling which brings up the overall average.  This is important to keep in mind, as we still see downward pressure on home prices overall.

Rising inventories of distressed home sales and foreclosures will certainly keep the pressure on prices, but the tide could be changing.  This is also a clear indication that prices are no longer "Falling off the cliff" and we are reacing a level of stabliization.

Certain ecohomic conditions play a role in our local home prices, so while we still have lackluster employment numbers, the market is most likely to remain flat until conditions improve.

Does that mean it is a good time to buy a home?  If we take into consideration interest rates being at all time lows, it could be.  There are many reasons people purchase homes.  A place to live, an investment property, or a money maker.

For most home owners, buying a home was always a long term investment.  That's what went wrong during the housing bubble.  The days when one talked about paying off their mortgage so they could live rent free.  Not irrational exuberance in sucking out equity to buy more things.

Homeowners make a community.  They have long ther visions associated with their home.  They get involved in community and neighborhood orgainizations.  Communities with higher home ownership have better educational performance and lower crime rates.

Still, while financial advantages shouldn't be the first and only thing to consider when we think about owning a home, it would be foolish to discount these benefits althogether.  The opportunity to take advantage of tax deductions for mortgage interest and property taxes or the ability to benefit from the capital-gains exclusion on the sale of a home up to $500,000.

So there are other factors to consider when deciding to purchase a home other than sales price.  Interest rates, tax benefits, community benefits, and the emotional benefits.

So is the market finally reaching a bottom?  We will only be able to tell when we see price increases over a longer period of time.  However, we see the market is opening up some great buying opportunities for some who are taking advantage of them now.

 If you're ready to find a home give us a call!

Jess and Julie Lyda
RE/MAX Northwest Realtors
425-487-3001

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